MP Wealth-Builder Model Portfolio (CDN) – Business Plan

Last Updated by BM on March 10, 2025

Introduction

On our journey to mastering dividend growth investing (DGI), we immersed ourselves in extensive research on endowment investing—a time-tested approach to sustainable wealth-building. After all, who better to learn from than those who have preserved and grown wealth for generations?

For much of history, true wealth wasn’t measured by net worth alone, but by the income an investor’s assets could reliably produce. This fundamental principle resonates deeply with us as dividend growth investors.

We often reference Jim Garland’s powerful opening quote from his 2013 paper, Memo to the Darcy Family: To Thine Own Self Be True, as a guiding insight into this philosophy.

"The hero of Jane Austen's great novel, Pride and Prejudice, was a Mr. Darcy. Mr. Darcy was wealthy — but Austen expressed that fact in a way that today sounds odd. She wrote that Mr. Darcy was worth £10,000 a year. The income from his properties was far more important than the market value of those properties because he lived off that income."

Mr. Garland illustrates this concept through the story of two farmers:

"Imagine two farms and two farmers. One farmer raises chickens and sells them to grocery stores. We'll call him a chicken farmer. The other farmer keeps hens in a henhouse and feeds the eggs to his rather large family. The second one is an egg farmer.

The first person, the chicken farmer, is vitally interested in the market value of chickens. The second one, the egg farmer, is vitally interested in the number of eggs that his hens can lay, and in the health of the hens, but he doesn't care at all about the market value of his hens.

For the chicken farmer, risk means the probability of a decline in the price of chickens. On the other hand, the egg farmer could care less about market values. His risks are foxes, viruses, and other such threats to the well-being of his hens.

Think of stocks as chickens, and dividends as the eggs those stocks provide. Total return investors are chicken farmer investors, because they worry about the market value of their "chickens" – of their stocks. On the other hand, endowment investors are egg farmer investors. All that endowment investors worry about is the current and future quantities of their "eggs" – their dividends."

Like Garland, we see the clear parallel between endowment investors and egg farmers. But as dividend growth investors, we take it one step further. Instead of settling for any dividend-paying stock, we focus exclusively on dividend growth stocks—companies that consistently increase their payouts year after year. Our experience has shown that businesses with a strong track record of dividend growth tend to deliver capital appreciation at a similar pace. The combination of a rising dividend and a growing share price is a powerful wealth-building engine.

Armed with a strategy that pays us in both up and down markets, we remain patient, waiting for the right opportunities to buy quality dividend growers at sensible prices. After all, in today’s chicken-farming world, the key to building wealth is simple: buy more income at a lower price.

And what better way to demonstrate our approach than by building a dividend growth portfolio from the ground up?

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