“In any moment of decision, the best thing you can do is the right thing, the next best thing you can do is the wrong thing, and the worst thing you can do is nothing.”
— attributed to Theodore Roosevelt

Investing for your retirement is easier if you start when you’re young. There’s no denying it. There is no greater friend than time.

But I think investment professionals emphasize the time factor so much that older folks feel like they missed the boat — that if they didn’t start investing in their twenties, there is no point starting now. I can’t tell you how many of my peers have all but given up the hope of retiring.

That’s just one reason why I like the story of Anne Scheiber.

#-ad_banner-#Anne was in her 50s when she retired from the IRS as an auditor. She had never been promoted the entire time she worked there. Anne’s pension was $3,100 a year. She had also managed to squirrel away $5,000 in savings.

It wasn’t until after she retired in the mid-1940s that Anne started a dividend reinvestment portfolio.

When she died in 1995, Anne had turned her $5,000 into $22 million.

Now granted, Anne lived a long life. She was 101 years old when she finally passed away, leaving her fortune to Yeshiva University. So that $5,000 did have many years to grow through compound growth.

But I often wonder if Anne’s burgeoning retirement account eased any anxiety that she might have felt in retirement. I wonder if living financially stress-free added to her longevity. After all, Grace Groner, another well-known dividend re-investor that I highlighted in this issue of StreetAuthority Daily, also lived to see her 100th birthday.

How much less stressed would you be if I told you that you could grow your retirement income by 10%? How about if I told you that you could do that in just one year?

Do You Have Just One Year?

On December 15, 2009, I launched my premium income investing newsletter, The Daily Paycheck. One of the first things I did was invest $3,597 in Reaves Utility Income Fund (NYSE: UTG). My very first dividend payment from Reaves was for $21.85. By doing nothing more than reinvesting dividends, after one year, my Reaves dividend payment was $23.50 — or 7.6% higher than when I started.

Reaves didn’t raise its dividend that year. So my dividend growth was entirely due to dividend reinvestment. As you’ll see below, the power of dividend reinvestment is even greater if you discover a security that consistently raises its payout.

On February 5, 2010, I invested just $3,260 in Magellan Midstream Partners (NYSE: MMP). Magellan is a master limited partnership (MLP) known for dividend growth. On May 14, 2010, my Magellan dividend was $57.60. And true to its reputation, MMP raised its dividend every quarter thereafter. After one year, my dividend distribution had grown to $65.21 — up 13.2%.

Every time Magellan raises its dividend, it acts like a turbo charger to the compound growth of dividend reinvestment.

The last quarterly Magellan dividend I received in February 2014 was over $121 — twice the amount I received four years ago.

Magellan continues to be one of my favorite MLP holdings thanks to its consistent dividend raises. Just on April 24, Magellan raised its quarterly distribution to $0.6125, up from $0.585 per unit. This was the 48th distribution increase for MMP since its 2001 IPO.

Magellan is also one of my best performers. It’s up 339.5% since I originally bought it for The Daily Paycheck portfolio back in February 2010.

A recent study by the National Institute on Retirement Security found that 85% of Americans are either “concerned” or are “very concerned” about their ability to achieve a secure retirement. That’s the kind of stress that takes its toll on people’s lives. And I just don’t think it has to be that way. I think there’s a better way.

My friends ask me why I’m so obsessed with the “Daily Paycheck” system. I guess it’s because I see the difference this kind of strategy can make — even after just one year.

I started using the “Daily Paycheck” strategy back in December 2009 with an initial $200,000 investment, using real dollars to buy the safest and best dividend investments on the market. So far, so good. Today, my portfolio is worth more than $306,000 and I’ve been collecting an average of $1,353 in dividend income every month.

It’s a strategy that anyone can pick up to save for tomorrow or start generating a rising stream of income to live off of today. For those who are ready to get started, I invite you to read this short memo. You won’t regret it.