The Dividend Growth Investment Strategy¹
by Roxann Klugman, 2001, Citadel Press

The second paragraph in the Preface of The Dividend Growth Investment Strategy contains this example:
"If you have a stock that pays $1 per share dividend and the dividend increases at 10%* per year, the dividend will double in size every seven years. Thus, at the end of seven years, you'll receive $2 a share. At the end of the next seven years, you will have increased your dividend, not by another $1 per share but by $2 a share, now totaling $4. Go for another seven years and you will be at $8 a share. Another seven years and you are at $16 per share, then$32 the next seven years, then $64, then $128. Now you get the picture.
This book is about increasing your wealth, for retirement and for your loved ones after your death, through the magic of compounding."

* RoxAnn Klugman claims on page 12 of her book that 10% dividend growth is "around the historical average". I'm not sure this is true. Certainly that number is not valid in Canada. Is 10% dividend growth a year possible? Yes. There are a couple of dozen Canadian common stocks with double digit dividend growth. I do my planning with a lower number, however, closer to 5% dividend growth. If I get more dividend growth, I consider myself lucky. Triumph of the Optimists (page 155) has the annualized real dividend growth rate for Canada over the 1900-2000 hundred year period at 0.3%.
Realize this is an American book. All the examples, more than half the book (the Appendix begins on page 123) is data on American stocks. There are no Canadian examples: in most of their minds, we do not exist.
If you know nothing about the dividend growth investment strategy, this book will outline it for you in its first 122 pages (less an good chapter, 12 pages, on annuities). The author discovered the concept of dividend growth in 1994 and realized "that the stock market was not the scary place I thought it was". In my view, RoxAnn Klugman puffs the dividend growth rates a bit too much. The basic ideas for the dividend growth investment strategy are in the book, none the less.
Here are some examples:
the secret: "companies raise their dividends" 16
"Fear and greed are the two emotions that drive most investors. It doesn't have to be this way. This book is about the alternative, a long term plan to continually increase your wealth with little risk and reasonable rewards."4
"it is a strategy that you can undertake yourself" 4
"Investing your money yourself in blue-chip companies with a long history of raising their dividends" viii
"with some diligence and patience the small investor could do well"
Our retirement income does not depend upon selling stocks. Market corrections do not have to be dreaded. 15
"the dividend paid per share does not change, whatever the stock price" 27
"When we retire, we will live off the dividends our stocks produce without having to sell any stocks or spend down our principal. Our dividend income and stock value will continually grow." 9
RoxAnn Klugman outlines the basics of the dividend growth investment strategy in Chapter 2. Her first heading is discipline. You have to have the discipline to do it yourself and confidence in the appropriateness of the strategy. You must resist alternatives: stocks which do not pay dividends, bonds and annuities. Number two is patience. It takes time for the dividends to grow. The dividend growth strategy is not a get rich quickly scheme. And she continues with an interesting list of eight. 18
"It is clear that holding a portfolio of stocks is far superior to both a variable annuity and a mutual funds." 63

¹The Dividend Growth Investment Strategy is a good book for novices. The Single Best Investment - Creating Wealth with Dividend Growth is a better book for more serious investors. It's author, Lowell Miller is in the money business and much more experienced.