Two of my joys in life are investing and poker. As it turns out, I’m not alone when it comes to pairing these vocations.

The Dallas banker Andy Beal is famous for taking on the best professional poker players in the world, chronicled in the book “The Professor, the Banker and the Suicide King: Inside the Richest Poker Game of All Time.” But he didn’t make his billions playing poker. He ended up on The Forbes 400 list because he wisely invested in distressed assets during the financial crisis.

#-ad_banner-#By the same token, David Einhorn has won over $5 million playing poker. But Einhorn amassed more than a billion dollars as a hedge fund manager. He made headlines when he shorted Lehman Brothers stock before the 158-year-old financial services company went bankrupt.

There are a number of important lessons that I learned from poker and have successfully applied to investing. But I credit one lesson in particular for the strategy that has allowed me to nearly double my portfolio’s income in only a few years.

Increase Your Bets On A Winning Hand
People are generally adept at selecting a good investment, one that has the potential to produce solid returns. But they have trouble adding to that position once they’ve made their initial investment. If the price of the stock drops, they worry that it could go lower. If the price of the stock rises, they think they missed the opportunity to invest more.

Poker players, however, know that good hands don’t come around that often. You need to bet every round to build the pot and maximize your income.

This lesson is especially important if you’re investing for retirement. After all, your primary goal is to maximize the income your portfolio generates by the time you reach your golden years. Luckily, there is an easy, tried and true, method to help you achieve this goal.

How A $180 Investment Generated $250,000 In Dividends — Automatically
An Illinois secretary named Grace Groner used this method back in 1935 when she invested less than $200 in the company she worked for — Abbott Labs (NYSE: ABT). When she made her initial investment, she elected to automatically reinvest the quarterly dividends that Abbott Labs paid to buy more shares of ABT. She never made another investment decision for as long as she lived.

When she died in 2010, her portfolio was worth $7 million and was generating roughly $250,000 a year in annual dividend income.

Whether you have just one stock — or a portfolio of solid dividend paying stocks — you can use a dividend reinvestment program (DRIP) to buy more shares automatically. And what’s more, it takes the guessing game out of when you should buy more.

By reinvesting your dividends you will buy more shares at lower prices when dividend yields are higher — and fewer shares when yields are lower and prices are higher.

Of course, it took Ms. Groner a lifetime to earn her millions. But even if your time frame is just a few years, you can still generate many times more income just by reinvesting your dividends.

For instance, in 2010 my Daily Paycheck portfolio was in its first full year of operation. That year, my portfolio generated $9,714.11 in dividends. By reinvesting those dividends and buying more shares of my holdings over the past several years, my portfolio was able to generate even more income. In 2014, my portfolio generated $18,251.21 from dividends alone.

As you can see, just a few years can make a big difference.

That’s nearly $9,000 more per year I’m generating, simply because I reinvested my dividends to purchase more shares over time.

Dividend reinvestment pays you more over the long haul because it puts your dividends to work. When you use your dividends to purchase more shares, those additional shares pay you higher dividends, which in turn buy you more shares.

Not only that, but it also compounds your growth and can exponentially increase your income potential. It’s a simple, yet powerful, strategy that can do wonders for your retirement income. No matter how old you are, there’s never been a better time to start putting your dividends to work for you.

If you’d like to learn more about dividend reinvestment, I invite you view a special presentation I recently put together called The Daily Paycheck Retirement Plan. This presentation details my three step approach to building a safer, and more efficient, retirement portfolio.

My Daily Paycheck Retirement Plan can help you maximize your portfolio’s income and growth, all while minimizing risk. Learn how to build a safer and more secure retirement portfolio today. Just click here to read my report.