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This dividend stock has already paid me back 42%!
Published about 6 hours ago • 4 min read
I want to show you one of the laziest things I own... And one of my favorites.
It’s Main Street Capital (MAIN).
MAIN lends money to small and mid-sized private companies. Think family-owned size businesses that are too small for Wall Street to care about, but too big for the local bank to lend to. MAIN collects interest on those loans and sometimes owns a piece of the businesses too. Then it passes most of that money to shareholders. Every single month.
But there’s one catch. MAIN’s dividends are “non-qualified.” That means in a regular brokerage account, they get taxed like your paycheck, not at the lower rate many dividends get. That’s why I hold mine in my self-directed IRA. Inside an IRA, the tax bill doesn’t matter right now. If you own something like MAIN, an IRA is a great home for it.
SimplySafeDividends.com
Between December 5, 2022 and March 13, 2023, I bought 150 shares. My average price was $37.36.
Then I stopped and haven’t bought a single share since.
And I haven’t sold a single share either. I just sat on my hands.
In that time, MAIN has paid me $2,357.81 in dividends.
That’s 42% of my money back.
A quick word on DRIP. DRIP stands for “dividend reinvestment plan.” When you turn it on, your dividends automatically buy more shares of the same stock, even tiny pieces of a share. You don’t have to do a thing. It’s one of the easiest ways to let your money grow on autopilot.
I didn’t turn it on for MAIN because the share price kept running up, and I didn’t want to keep buying at higher and higher prices. So instead, I took the cash and used it to buy other stocks in my IRA, like Agree Realty (ADC).
So MAIN isn’t just paying me. It’s buying me pieces of other income machines too.
Here’s another way I look at it. If I subtract the dividends I’ve received from what I paid, my cost drops from $37.36 a share to $21.64. That puts my “adjusted” yield on cost at 14.7%.
So when do I get all my money back?
Nobody can predict the future. But if MAIN keeps growing its dividend around 4% a year like it has been, my regular monthly dividends alone should pay me back by about late 2032. If MAIN keeps paying its extra “supplemental” dividends on top of that, it could happen closer to 2031.
MAIN Dividend Growth
After that I’m playing with house money. Every dividend and every dollar the stock goes up comes from money that already came back to me.
But that doesn’t make it risk-free. The stock could still drop. The dividend could still get cut. But my original money will be back home.
And I have zero plans to sell. One day, that monthly check will help pay my bills in retirement.
So what does “managing” this stock look like? Not much. Every so often I check in. I’ll ask an AI tool if there are any red flags, then double-check what it says. Sometimes I listen to an earnings call. Sometimes I read the chatter on Seeking Alpha.
Then I go back to doing nothing.
That’s the whole strategy. Buy something solid. Turn on DRIP if you want. Check in once in a while. Then sit on your ass and hold it for years and years.
It's really easy to make videos about stocks to buy. But what I really love to see is what people are ACTUALLY putting their money into. Ryne Williams does just that in his latest video.
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Each week you'll learn how to be a better dividend investor and follow the journey of a welder with a passion for passive income to $1,000,000 and beyond.
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