Kanwal Sarai of “Simply Investing” explains his 12 rules for dividend investing and how this strategy could be used in retirement planning.
When most people think of investing, they picture charts, constant news updates, and the stress of trying to time the market. But as my guest Kanwal Sarai shared on the Retire Today podcast, successful investing doesn’t have to be complicated—or stressful. In fact, Kanwal says it’s so simple that even his nine-year-old kids could do it.
Kanwal is a software professional turned dividend value investor who founded SimplyInvesting.com. He’s also the host of The Simply Investing Dividend Podcast and designer of the “12 Rules of Simply Investing.” His story is a powerful reminder that investing isn’t just about growing wealth—it’s about building long-term financial independence through education and discipline.
From Software Engineer to Dividend Investor
Kanwal didn’t start out as an investor. He spent 30 years in the software industry, working for startups and Fortune 500 companies alike. But his interest in investing began in a surprising way—during late nights walking his newborn son to sleep.
“I saw a book I’d bought years ago, and I decided to read it while pacing back and forth,” Kanwal said. That book introduced him to Warren Buffett and Benjamin Graham, two icons of value investing, and started him down a lifelong path toward financial literacy and independence.
At first, he made the same mistake many beginners make—chasing hot tech stocks in the late 1990s. “I bought Nortel just because everyone was talking about it,” he recalled. “When it went bankrupt, I lost my entire investment.” That experience convinced him that investing based on hype or emotion isn’t a plan—it’s gambling.
What Is Dividend Value Investing?
Kanwal’s philosophy combines two approaches: dividend investing and value investing.
- Dividend investing means buying companies that regularly pay out cash to shareholders.
- Value investing means buying those companies when their prices are low compared to their true worth.
By focusing on companies that are profitable, stable, and consistently pay (and raise) dividends, Kanwal has built an investment strategy that rewards patience and discipline over speculation.
He looks for what he calls “hidden gems” that are undervalued today but have a long track record of profitability—companies like Coca-Cola, Johnson & Johnson, and Procter & Gamble, which have raised their dividends for 60+ years.
“These are mature businesses,” Kanwal explained. “They’ve been around for decades, they’re profitable, and they pay you regularly. That’s the kind of predictability investors near retirement should want.”
Avoiding the Dividend Trap
Kanwal shared an important lesson from his early investing years: don’t fall into what he calls the “dividend trap.”
The trap happens when investors chase high dividend yields without looking at the company’s fundamentals. If a stock’s price drops sharply, its dividend yield may look attractive—but often it’s a warning sign.
“One of my big mistakes was buying Washington Mutual,” he said. “The yield looked amazing—9%! But I ignored my own rules. The company went bankrupt.”
Kanwal’s Rule #7 from his 12 Rules of Simply Investing addresses this exact issue: only invest in companies with a payout ratio of 75% or less. That means the company should be paying out no more than 75% of its earnings in dividends. Anything higher is unsustainable and could signal financial trouble.
The Power of Compounding and Consistency
For Kanwal, the beauty of dividend investing lies in its simplicity and long-term payoff. When a company increases its dividend year after year, your income grows without any extra effort.
“It’s like giving yourself a raise every year—without working more hours,” he said. Companies like Coca-Cola and Johnson & Johnson have been increasing dividends for over 60 years. That kind of consistency, especially through multiple market downturns, gives investors confidence and stability.
And it’s not just theory—Kanwal practices what he preaches. His own children began investing as teenagers, using money from birthday gifts
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
The Burden
The Burden is a documentary series that takes listeners into the hidden places where justice is done (and undone). It dives deep into the lives of heroes and villains. And it focuses a spotlight on those who triumph even when the odds are against them. Season 5 - The Burden: Death & Deceit in Alliance On April Fools Day 1999, 26-year-old Yvonne Layne was found murdered in her Alliance, Ohio home. David Thorne, her ex-boyfriend and father of one of her children, was instantly a suspect. Another young man admitted to the murder, and David breathed a sigh of relief, until the confessed murderer fingered David; “He paid me to do it.” David was sentenced to life without parole. Two decades later, Pulitzer winner and podcast host, Maggie Freleng (Bone Valley Season 3: Graves County, Wrongful Conviction, Suave) launched a “live” investigation into David's conviction alongside Jason Baldwin (himself wrongfully convicted as a member of the West Memphis Three). Maggie had come to believe that the entire investigation of David was botched by the tiny local police department, or worse, covered up the real killer. Was Maggie correct? Was David’s claim of innocence credible? In Death and Deceit in Alliance, Maggie recounts the case that launched her career, and ultimately, “broke” her.” The results will shock the listener and reduce Maggie to tears and self-doubt. This is not your typical wrongful conviction story. In fact, it turns the genre on its head. It asks the question: What if our champions are foolish? Season 4 - The Burden: Get the Money and Run “Trying to murder my father, this was the thing that put me on the path.” That’s Joe Loya and that path was bank robbery. Bank, bank, bank, bank, bank. In season 4 of The Burden: Get the Money and Run, we hear from Joe who was once the most prolific bank robber in Southern California, and beyond. He used disguises, body doubles, proxies. He leaped over counters, grabbed the money and ran. Even as the FBI was closing in. It was a showdown between a daring bank robber, and a patient FBI agent. Joe was no ordinary bank robber. He was bright, articulate, charismatic, and driven by a dark rage that he summoned up at will. In seven episodes, Joe tells all: the what, the how… and the why. Including why he tried to murder his father. Season 3 - The Burden: Avenger Miriam Lewin is one of Argentina’s leading journalists today. At 19 years old, she was kidnapped off the streets of Buenos Aires for her political activism and thrown into a concentration camp. Thousands of her fellow inmates were executed, tossed alive from a cargo plane into the ocean. Miriam, along with a handful of others, will survive the camp. Then as a journalist, she will wage a decades long campaign to bring her tormentors to justice. Avenger is about one woman’s triumphant battle against unbelievable odds to survive torture, claim justice for the crimes done against her and others like her, and change the future of her country. Season 2 - The Burden: Empire on Blood Empire on Blood is set in the Bronx, NY, in the early 90s, when two young drug dealers ruled an intersection known as “The Corner on Blood.” The boss, Calvin Buari, lived large. He and a protege swore they would build an empire on blood. Then the relationship frayed and the protege accused Calvin of a double homicide which he claimed he didn’t do. But did he? Award-winning journalist Steve Fishman spent seven years to answer that question. This is the story of one man’s last chance to overturn his life sentence. He may prevail, but someone’s gotta pay. The Burden: Empire on Blood is the director’s cut of the true crime classic which reached #1 on the charts when it was first released half a dozen years ago. Season 1 - The Burden In the 1990s, Detective Louis N. Scarcella was legendary. In a city overrun by violent crime, he cracked the toughest cases and put away the worst criminals. “The Hulk” was his nickname. Then the story changed. Scarcella ran into a group of convicted murderers who all say they are innocent. They turned themselves into jailhouse-lawyers and in prison founded a lway firm. When they realized Scarcella helped put many of them away, they set their sights on taking him down. And with the help of a NY Times reporter they have a chance. For years, Scarcella insisted he did nothing wrong. But that’s all he’d say. Until we tracked Scarcella to a sauna in a Russian bathhouse, where he started to talk..and talk and talk. “The guilty have gone free,” he whispered. And then agreed to take us into the belly of the beast. Welcome to The Burden.