I understand why people love good high-yielding securities.

If you’re after a large income stream, then you hardly need me to explain the benefit of this elite group of stocks.

As my longtime readers know, higher yielding securities make up roughly a third of my Daily Paycheck portfolio. I wouldn’t be able to collect more than $1551 every month without them.

But when it comes to high-yielders, there’s one thing that many dividend-seekers don’t realize.

And in the long run, this simple oversight could be costing you thousands of dollars every year.

#-ad_banner-#One of the things I often hear from income investors is, “I only invest in securities with more than X% yield.” Usually the “X” is 8% or higher.

Here’s what many income-seeking investors forget: higher yield generally equates to higher risk.

To commit your whole portfolio to high-yield assets — especially if you’re nearing retirement — may not be worth it.

There’s a better, safer way to dramatically boost your income.

Don’t Overlook Growth For Yield
With a few years time, you can quickly generate roughly the same income with a lower-yielding security — as long as it grows its dividend.

And if you have even more time, you could more than double that income with a lower-yielding dividend grower. And you could do it with far less risk.

For instance, if you invested $10,000 in a security with an 8% yield, you could expect to earn $800 a year.

But take a look at what happens when you opt for a lower-yielding dividend grower instead.

Annual Income
$10,000 Invested at a 4% Yield with 10% Dividend Growth

In the beginning, your income isn’t as high as with the 8% yielder. In fact, at 4%, you only earn about half as much for the first five years.

And if you’re eagerly awaiting your payouts, it could feel like you made a mistake.

But look at what happens in the ninth year. By that time, the stock that felt like a mistake is matching the income of the 8% yielder. By year 16, you’re earning twice as much — $1,600 every year.

The 8% yielder, meanwhile, is stuck generating its $800 a year.

That’s the power of choosing lower-yielding securities with strong dividend growth.

If you’re familiar with my Daily Paycheck portfolio, you know I believe in balance. I like some high-yield securities to maximize my current income. I like steady income providers to minimize risk. But I count on securities that have a track record of dividend increases to maximize my income growth.

I worry that this last group gets overlooked because they often come with a lower yield. But I know just how powerful they can be. That’s why I recently added another dividend grower to my exclusive portfolio.

T. Rowe Price Group (Nasdaq: TROW) is an investment services company founded in 1937 in Baltimore, Maryland. Today it has offices in 14 countries around the world and manages assets valued at more than $770 billion.

On February 19, TROW announced that it was increasing its quarterly dividend by 18.2%. TROW’s new dividend yield is just 2.6% — below what most income investors would consider tempting. But most people don’t realize that T. Rowe Price is a “Dividend Aristocrat” — an elite group of companies that have raised their dividends every year for at least 25 consecutive years.

T. Rowe Price’s recent dividend increase marked its 29th consecutive year of dividend growth. So it is more than likely that TROW will raise its dividend again within the next 12 months.

If you want to retire with a large and dependable stream of income, then there’s no better way than to pick companies that are committed to raising their dividends year after year.

That’s why I like Dividend Aristocrats, especially for those people with a longer investment time horizon. Because even if you’re just starting out and don’t have a lot to invest, in the long-run they could help you earn thousands more than what you could get with today’s high-yielders.

Here at the office we’ve begun an ambitious experiment to show Daily Dividends readers precisely how this works.

Matt Michaels, a young father at StreetAuthority, recently went on camera to document the process of turning a mere $300 into a retirement portfolio for his two young daughters.

In this video, you can follow along on his computer screen as he opens his brokerage account to begin investing $300 using the Daily Paycheck strategy.

He hopes that by putting his money to work and by sharing the experience, he can prove that anyone can start a successful low-risk investment plan… no matter how much money you begin with. You can watch him take the first steps right here.