Sure, it would be nice to get rich quick but not all people are lucky. Getting rich slow means allowing the power of compounding returns transform a small capital into a significant fortune over time. There are plenty of compound interest calculators online if you want to run the numbers.

Here’s a video on the effect of snowballing dividends from Mr. Dividend Data, I think he illustrates the idea quite nicely:

This wealth building method only works if you have the patience to let it work. Since it is actually the power of time and not the amount invested that is doing the heavy lifting. One also needs discipline to reinvest the dividends instead of spending them. Lastly, it is important to identify and invest in REITs and other dividend stocks that are able to consistently grow their dividends year after year.

As an example, the dividend I received from AREIT in 2020 was P1.32 per share and this year, it is P1.95. That is a compound annual growth rate (CAGR) of 21.5%. That is twice the CAGR of 3M’s dividend, the stock shown in the above video. I will not attempt to project AREIT’s impressive 2-year performance into the future though. As they say, past performance does not guarantee future returns. Also, I’m not saying that AREIT is better than 3M – a multinational company that has consistently grown its dividends for 60 years!