The Income Investor’s Recipe: Building Wealth One Dividend at a Time
October 4, 2025
Decades of investing have taught our co-founder, David Kuo, one thing: dividends matter.
On BT’s Money Hacks podcast, he revealed why that lesson is more relevant than ever today.
Through personal anecdotes and hard-won insights, David showed how investors can build portfolios that let them sleep well at night.
David’s most fundamental advice centers on self-discovery.
Early in his investing career, he experimented with various strategies – growth investing, commodities, currencies, and value investing – before discovering his true calling in income investing.
“The biggest mistake I made in the early days was not knowing what kind of investor I was,” he reflects.
The turning point came when he realized that income investing aligned perfectly with his temperament.
Unlike other strategies that kept him “fretting all night,” dividend investing brought peace of mind and predictability.
Throughout the conversation, David draws parallels between cooking and investing, viewing both as exercises in combining ingredients to create something greater than the sum of its parts.
Just as a chef needs various ingredients to create a satisfying meal, an investor needs different types of stocks to build a robust portfolio.
His portfolio recipe includes three essential components: a solid base of income-generating shares providing steady dividends, growth stocks for capital appreciation, and value plays for opportunistic gains.
This balanced approach ensures both current income and future wealth accumulation.
One of David’s most compelling arguments challenges the traditional definition of investment losses.
When a stock purchased at $1 drops to $0.90 but continues paying rising dividends, has the investor truly lost money?
David argues that as long as the company’s fundamentals remain strong and dividends keep flowing, paper losses are irrelevant.
This perspective extends to his view on volatility, which he sees as opportunity rather than risk.
“If my calculation is correct that a share is worth $10, and it falls to $8, I would pile more money into that share,” he explains, comparing it to finding premium prawns marked down from $10 to $2.60 at the supermarket.
Perhaps most striking is David’s approach to wealth accumulation.
Rather than pursuing riches for personal gain, he views himself as a custodian for future generations, and this long-term perspective is what shapes every investment decision, emphasizing sustainable income generation over quick profits.
His definition of “enough” isn’t about accumulating a specific sum but achieving dividend income that replaces employment income – financial independence – which he notes, requires careful planning and typically takes 10 to 20 years to achieve.
David’s advice cuts through market noise with refreshing clarity.
He dismisses the notion that stock markets are “casinos for the rich,” pointing out that markets historically return between 7% and 8% annually, allowing patient investors to double their money every decade through compound growth.
His emergency fund recommendation – maintaining roughly three to six months of expenses in readily accessible funds – provides a safety net amid an uncertain employment landscape.
Combined with geographic diversification across multiple markets, this approach creates resilience against economic shocks.
David Kuo’s income-focused approach offers a refreshing alternative to frenetic trading and market speculation.
By prioritizing sustainable dividends over price movements, investors can build wealth methodically while sleeping soundly at night.
“Investing should be enjoyable. Investing should not be keeping you up at night,” David notes.
His philosophy rests on three pillars: know your investment temperament, focus on dividend income, and think like a long-term custodian rather than a short-term trader.
Success in investing, like cooking, isn’t about chasing trends but understanding your style, selecting quality ingredients, and having patience to let compound growth work its magic.
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[This article is based on insights shared in Money Hacks from The Business Times podcast, “Can dividend investing be your ticket out of a 9-5?”, published on 29 September 2025.]
The post The Income Investor’s Recipe: Building Wealth One Dividend at a Time appeared first on The Smart Investor.
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