When looking to build a long-term portfolio of stocks that pay high dividends, investors usually come up with a mix of stocks that either have high dividend yields or high dividend growth rates. It is difficult to find good companies that have both.

When investing in Real Estate Investment Trusts (REITs) investors are sometimes surprised by the hefty tax bill. REITs are taxed at ordinary income tax rates if they are in taxable accounts, which takes a big bite out of the total return for many. But there is a way to get around this tax bill if an investor has capital losses he can use. I call this strategy dividends to capital gains conversion.

Most people have several goals in retirement. They want to retire at a certain age, they want to buy a vacation home, a new car, go to Europe twice a year, etc. It’s great to have goals for the retirement years. But I believe too many people skip over the most important goal of them all: Don’t run out of money!

The power of growing dividends over time continues to be underestimated by many investors. Many are concerned with another decade of slow growth and low to negative equity returns. However, one way to prepare for another decade of slow economic growth is to invest in dividend paying stocks that have shown they can weather tough economic times and not slash their dividends while it happens.

About every quarter I update my weights for my dividend paying stocks in my retirement portfolio. Let me first summarize the idea behind my weighting scheme. I do not normally believe in weighting by market capitalization, nor do I generally believe in equally weighting stocks.