You’ve got your 5 stacks of Nephelem Valor, you run down the Tower of the Damned and spot a pack of Elite Phase Beasts. Their affixes are Vortex, Frozen, Damage Reflection, and Molten. “No Problem,” you think to yourself, “With my gear, this will be cake.” Sure enough, you beat them and collect the loot and gold. Combined with your current stash, this new chunk of change means you can afford some new pants, so you’ll be able to farm faster and make more gold. Additionally, you can make back some gold by selling your current pants.
This scenario is really not that different from dividend stock investing. You’ve been working to make money, and once you’ve saved up enough, you can put it to use to increase your capability to earn more money buy purchasing shares of a good quality dividend stock. That’s what’s great about dividend stock investing, you’re always moving forward and increasing your means. Also, just like your old pants in Diablo 3, if the stock isn’t performing, you can sell it and get a new one.
The Good Gear Deserves Good Gems
However, unlike Diablo 3, when your dividend stock is sending you money each month or quarter (and the returns are good because you did your research), you can take the extra money you’ve saved and buy more of that stock, further increasing its output. If you could just feed your pants more gold in Diablo 3 and their stats would increase, you’d never need a new pair of pants! The closest you can get to that freedom in Diablo 3 is adding expensive gems, or if Blizzard ever adds enchanting. I can tell you from experience, it feels great to know that your dividend stock is performing well, and being able to invest further in it is an epic victory.
Dividend income is completely passive. While you’d have to use your pants and other gear in Diablo 3 to earn more gold, your dividend stocks are earning you money without you even doing anything.
Scan The Auction House
In Diablo 3, you wouldn’t just buy any item on the auction house and assume it’s going to make your character down elites/champions faster. You would make sure it had good resistances, your primary stat (in my case Intelligence for my Wizard), attack speed, critical hit chance, etc. It’s no different for stocks. You need to know which statistics to focus on so your stock performs well enough to be worth your gold, -ehrm money. Make sure the stock has a P/E Ratio under 20, a decent dividend yield, a healthy payout ratio, and has increased their dividend consistently for the past several years.
What other similarities do you see between Diablo 3 and investing? If you’ve haven’t played Diablo 3, maybe there’s another RPG you can draw similarities to.
Let me know in the comments!