Today I’m looking into Marc Lichtenfeld’s “Easy Income Challenge,” which is all about earning monthly income through dividend investing.
In the Oxford Club presentation Lichtenfeld used to pitch this system, he said he believes that owning dividend stocks is “the single greatest way to get rich in the stock market.”
And by joining his so-called “challenge” (for $49), Lichtenfeld says you’ll discover how to invest in “many of the high-yield, fast-growing dividends out there.”
“Simply put, I believe owning dividend-paying stocks is the single greatest way to get rich in the stock market!”
“If you join my Easy Income Challenge…
“You’ll discover EXACTLY how to invest in many of the high-yield, fast-growing dividends out there.
“And see how you could collect a big income check every single month.”Source: https://pro.oxfordclub.com/p/MULTITO79BRKLT2YRDSOSAOSALTNMT/EBRKY784/Full
Long story short, Marc Lichtenfeld’s pitch centers around the idea that the Easy Income Challenge could help virtually anyone live the “good life,” making money while relaxing on a boat somewhere without a care in the world.
“You’re relaxing on a boat off the Florida coast.
“The water’s calm, and you’ve got a cool drink in your hand.
“You don’t have a care in the world.
“No meetings to attend.
“No overdue bills.
“But the best thing?
“You’re getting PAID to relax and spend time doing what YOU want…
“Because you built up a portfolio of companies that pay YOU every single month.
“Hi, I’m Marc Lichtenfeld.
“Today, I’ll show you how this is all possible through my Easy Income Challenge.”
Getting paid to relax on a boat sounds pretty darn good to me.
But is Lichtenfeld’s system legit? If you join, will you be sitting on a beach somewhere in the not-too-distant future, or is the whole thing one big scam?
There is some hype in the sales pitch, and I feel it brushes over the potential risks and drawbacks of dividend investing, so I would take the marketing with a grain of salt.
But I don’t believe that the Easy Income Challenge is a scam. As I mentioned, it’s all about investing in dividend-paying stocks, which is a legitimate way of earning passive income, and this is what Marc Lichtenfeld specializes in. So it could be worth a look.
That said, there are some points I want to make regarding this system that might help you make a more informed choice about joining.
So keep reading if you want to know more.
What Is the Easy Income Challenge?
Marc Lichtenfeld describes the Easy Income Challenge as a “challenge” in that he’s challenging people to learn how to make passive income with dividend stocks.
“In short, I’m challenging you to discover how you could collect BIG passive income from dividend stocks!”
When you boil it all down, though, the Easy Income Challenge is essentially a promotion for Lichtenfeld’s dividend investing service, The Oxford Income Letter.
I say that because the Easy Income Challenge is not a service in and of itself, it’s more like a “package” of bonus videos, reports, and a book that comes with a subscription to The Oxford Income Letter.
How does it work?
Well, first and foremost, if you’re unfamiliar with dividends, these are periodic distributions made to shareholders of a public company. Typically, the payments are made every three months, but these can be paid out monthly or annually, depending on the company.
And how much you can earn depends on the dividend the company pays per share, how often they pay a dividend, and how many shares you own.
As for Lichtenfeld’s system, he says he shows subscribers how to pick top-paying dividend stocks, how to maximize gains, and how to automatically reinvest to get more shares.
“With the Easy Income Challenge, I’ll walk you through, on camera…
“Exactly how to pick a top-paying dividend stock
“How to maximize your future payouts when you invest
“How to set up your portfolio so you can automatically reinvest your dividends to get even more shares!”
I’ll delve into what Lichtenfeld looks for in a “top” dividend stock shortly, but the general idea behind the second and third points above relates to compounding, which Lichtenfeld refers to as his “No. 1 Dividend Secret.”
How does compounding work? In short, instead of spending your dividend earnings, you can choose to reinvest them back into the company to buy more shares and (all else being equal) increase the amount you earn during the next payout.
As for the “automatic” part of what Lichtenfeld said above, he appears to be referring to a Dividend Reinvestment Plan (DRIP), a program where some public companies allow you to automatically reinvest your dividend payments to receive more shares.
In other words, it’s essentially automated compounding.
The beauty with all of this is that compounding, generally speaking, can be a great way to increase your income over time since you’re continually reinvesting your earnings.
But as with anything, there are risks involved.
Before I get to that, though, let’s take a look at how Lichtenfeld is picking the dividend stocks he recommends to people who sign up for the Easy Income Challenge.
How Does Lichtenfeld Pick Dividend Stocks?
According to Marc Lichtenfeld, there are “three important dividend characteristics” he likes to see in a dividend stock: a growing dividend, a high yield, and a low payout ratio.
- “Growing Dividends”: Lichtenfeld says that he first wants to see a company policy that “publicly states that the company intends to increase dividends every year.”
- “High Dividend Yield”: Second, Lichtenfeld says he looks for dividend stocks with a yield that’s “at least twice as big as the S&P 500’s.” According to Investopedia, the S&P 500’s long-run average yield is 4.3%, but from 2020 onward, it has been around 1.5% on average. So it depends on how Lichtenfeld is measuring the S&P 500’s yield but based on that, it sounds like he’s looking for dividend stocks with a yield of at least 3%.
- “Low Payout Ratio”: Third, Lichtenfeld says he generally avoids companies that have a payout ratio of more than 75%, and he defines the payout ratio as the amount of the company’s cash flow that goes toward paying dividends. According to Lichtenfeld, this can help ensure that the company has a better chance of sustaining its dividend even if it has “a tough year or two.”
There may be other aspects to Lichtenfeld’s strategy of picking dividend stocks, but those were the main characteristics he mentioned in the presentation.
He basically looks for companies that pay high dividends, grow their dividends consistently, and have a good chance of sustaining payments.
If you want to see what specific companies he has recommended, see my writeup of Lichtenfeld’s “Valorem” stock picks. In that presentation, he teased three companies, and I managed to uncover two of them, which both pay dividends.
So check that out if you want to know more about his picks.
Recommended: Go here to see my #1 rated stock advisory of 2022
What Do You Get If You Join Easy Income Challenge?
The Easy Income Challenge is essentially a “package” of different resources aimed at helping subscribers of The Oxford Income Letter make money through dividends, which have been put together by Marc Lichtenfeld.
The first resource is the “Easy Income Master Class,” a series of four videos Lichtenfeld has created that walk you through his dividend investing system.
Second, subscribers get access to two research reports that cover Lichtenfeld’s dividend stock picks. One is called “Collect Easy Income Every Single Month,” and the other, “Three Dividend Stocks for a Lifetime of Easy Income.”
Third, Easy Income Challenge comes with a copy of Lichtenfeld’s book on dividend investing, called Get Rich with Dividends.
And fourth, subscribers of the Oxford Income Letter get access to three model portfolios Lichtenfeld has put together: the High Yield Portfolio, Instant Income Portfolio, and Compound Income Portfolio. Each of these contains a list of dividend stocks Lichtenfeld is recommending that cater to investors with different preferences.
As for the Oxford Income Letter service itself, it’s a monthly newsletter that keeps you up to date on Marc Lichtenfeld’s latest recommendations and insights. And as the name suggests, it’s focused on helping subscribers earn money with dividends.
How much does the Easy Income Challenge cost?
It’s not possible to buy the Easy Income Challenge separately; you can only access it by joining The Oxford Income Letter, which costs either $49, $79, or $129, depending on which membership option you select on The Oxford Club website.
It’s unclear if the $49 option comes with the resources I mentioned earlier, but the $79 option does. And regardless of what option you choose, the service automatically renews at $79 per year until you cancel.
Who Is Marc Lichtenfeld?
Marc Lichtenfeld is the editor of the Wealthy Retirement email newsletter and several paid services published by The Oxford Club, including his flagship Oxford Income Letter.
According to his bio on the Oxford Club website, Lichtenfeld started his career as a trader at Carlin Equities before becoming a senior analyst at Avalon Research Group.
And his specialty is investing for dividend income.
Aside from sharing his picks in the different Oxford Club services he runs, Lichtenfeld has authored a book called “Get Rich With Dividends: A Proven System for Double-Digit Returns” and has been featured on popular news- and finance-related shows.
I’m not a member of The Oxford Income Letter service, so I can’t tell you how worthwhile it is, but I have covered several of Lichtenfeld’s presentations on this site, which you can see here. And his service is rated pretty well by subscribers, from what I can see.
That doesn’t mean Lichtenfeld’s picks will make you money, but my research suggests that he is an expert when it comes to dividend investing.
Bottom Line: Is the Easy Income Challenge Legit?
I don’t believe The Easy Income Challenge is a scam. As we’ve discussed in this post, it’s essentially a package of resources that come with an Oxford Income Letter subscription, all of which are aimed at showing subscribers how to invest in dividend stocks.
That said, there are a couple of points I want to make before wrapping this up.
First of all, parts of the presentation were a bit overhyped, in my opinion. Some of the examples that were shared could lead you to think that, with a relatively small investment, you could be sitting on a boat somewhere collecting “easy money” in no time.
For example, the presentation cited three historical examples of dividend stocks that could have helped investors make $150,000 per year with a $15,000 investment.
That sort of thing may be possible, but it’s far from the norm.
As mentioned, the historical dividend yield of the S&P 500 is around 4%. So making decent money with dividends typically requires a LOT of upfront capital.
The combination of compounding, rising dividends, and an increasing stock price can make a big difference to how much an investor makes over time. So there is no set rule about how much you can make. But generally speaking, you need a good chunk of cash to make decent money with dividends or, at the very least, a long time horizon.
And second, while dividends are often seen as a so-called “safe” investment, there are risks involved. As a dividend investor, you are putting your money at risk the moment you buy shares, just like someone who buys shares of a non-dividend-paying stock. And that stock could go up or down at any moment due to any number of reasons.
So my point is that even if you manage to find an awesome dividend stock, there’s no guarantee you’ll end up making a profit in the long run. Investing is risky. Period.
I’m not saying that makes the Easy Income Challenge any less legitimate. Nor am I saying you should or shouldn’t invest in dividend stocks. What you do is totally up to you.
The point I am making here is that it’s probably a good idea to take some of the marketing with a grain of salt because otherwise, you might join with the wrong expectations.
Anyway, I hope this post helps you make a more informed choice. And if you’ve joined the Easy Income Challenge (aka The Oxford Income Letter), let us know what your experience has been in the comments below.