It started out as an experiment. It wound up being my favorite income strategy: the markets “atm machine”.

#-ad_banner-#A little more than six years ago, StreetAuthority approached me with an idea. They wanted me to build a portfolio of reliable dividend stocks that would pay out more than 30 dividend checks a month — one for every day of the year.

In order to show how serious they were, they even gave me $200,000 and a dedicated brokerage account to get started.

I must admit, I was a little skeptical at first. The idea seemed too good to be true. But in just over six years — 2,361 dividends and more than $99,000 worth of dividend income later — the results have been far better than I could have imagined.

Since I started my portfolio back in December 2009, my initial $200,000 investment has grown to more than $316,592, giving me a total return of more than 58% in a little more than six years. As of this month, the total dividends I’ve received amount to $99,651.
 

In its first full year of operation, my portfolio generated an average of $809 in dividends a month. But my portfolio’s ability to generate income constantly grows. For instance in the last 12 months, I’ve collected $18,657 in dividends, amounting to $1,555 a month.

Even so, the average yield on my portfolio is still roughly 6.1% — nearly three times higher than the average yield in the S&P 500 and many times more than an average savings account.

I call this method of investing “The Daily Paycheck Strategy.” Simply put, by creating a portfolio of high-yielding dividend stocks that pay distributions regularly and have a history of raising their payouts, I’ve successfully built an income machine that pays me each and every day.

The best part is you can do the same.

And you don’t need $200,000 either. My results are fully scalable. So whether you have $1,000,000 to invest or $10,000, you can still earn a steady income stream using this strategy.

Now, admittedly, there’s another step to my strategy that has helped accelerate my income stream these past few years, and I would be doing you a disservice if I didn’t share it with you.

See, while it’s tempting to pocket the cash my portfolio is generating (who wouldn’t want an extra $1,555 per month in the bank), I’ve found I can actually earn more money just by simply reinvesting dividends. By using my dividends to purchase more shares, compounding takes over. And as a result, my next payment will be larger, which then buys more shares, and so on.

Consider two income investors, both of whom start a Daily Paycheck portfolio with just $20,000. One of those investors chooses to take the cash and spend it as he pleases. The other decides he wants to reinvest his dividends.

Assuming they both earn a 7% yield, the chart below shows you the difference compounding can make. After 10 years the investor who reinvested his dividends is generating $2,754 in annual income — nearly double the amount earned with no reinvestment.

And if the holdings happened to boost their dividends by just 5% annually — something even giant blue-chip AT&T (NYSE: T) has been able to beat — the portfolio earns 278.5% more income when compared to the investor who didn’t reinvest. In fact, the investor who reinvests could be generating an effective yield of 26.5% based on his initial $20,000 investment.

If you have even a little bit more time on your investment horizon (or more money to invest, or additional dollars to invest each year), then the numbers only get better. And keep in mind that these are conservative estimates. They don’t include one penny of capital appreciation.

Of course, I understand if you want your money now and you choose not to reinvest your dividends.

But by not reinvesting your dividends, you sacrifice the benefit of compound growth.

Before I started my premium advisory, The Daily Paycheck, I was anxious about generating a portfolio that could support me once I retired. I’m no longer anxious.

Like my Daily Paycheck portfolio, my personal portfolio is generating more and more income every month. And I know that when retirement comes, I can just flick off the dividend reinvestment switch and start living off the income.

That’s the power of my Daily Paycheck strategy, and it’s something I want every investor to experience.

Unfortunately for 10 million retirees in America, that could soon become a serious challenge. That’s because the federal government recently passed new legislation that could lead to a loss of as much as 50%, or more, of their retirement income every year. Now I’ll admit, I never expected something like this from the U.S. government. But, on the other hand, this is exactly where I believe my Daily Paycheck strategy can be most effective. Consider this…

If you’re one of the 10 million workers or retirees affected by this new bill, my system can help add hundreds or thousands of dollars to your income stream every year. That could be the difference between continuing to live a comfortable retirement or being forced to re-enter the workforce.

Unfortunately I can’t squeeze all of the details about the government’s new retirement “hit list” into this issue. That’s why I created a new information guide to answer all of your questions.

It will tell you who’s at risk and how my Daily Paycheck Retirement Plan can help maintain your annual income stream — and your way of life. To view it, please click here.