The REIT Recipe for Independence Day

NEW YORK ( TheStreet) -- This week, Americans will celebrate the Fourth of July, which honors the adoption of the Declaration of Independence. As part of that tradition, families will take enjoy a day off from work and relax at the side of pool and enjoy -- and share recipes for -- barbecue and pecan pie.

My problem is that I'm not much of a cook, so I can't offer any good recipes, and since I'm from South Carolina I eat only mustard-based barbeque. Furthermore, I'm trying to lose a few pounds for the beach, so I'm just staying away from anything that resembles a fat gram.

So as my kids enjoy splashing in the pool on the Fourth, what kind of recipe can I share with my friends and family? I don't want to be "Boring Bettie" and talk about the threat of rising interest rates and I certainly don't want to get so bored that I'm forced to take off my shirt and do belly flops (that would be dangerous).

I want to talk about something that everyone at the party can relate with and I want to be able to come up with the best recipe ever. I need a "secret ingredient" that will make all of my friends think that I'm the most amazing chef around...

Serve Up Some Dividends, Baby

Bingo. I will serve up the best recipe on the planet. One that promises long-term rewards and that makes folks salivate for more. I will bring the juiciest and most sought after recipe that will easily make me the life of the party. Most importantly, my recipe will last for quite some time, possible even for generations.

Here's my pitch:

"Hey Guys. I have a terrific recipe to share with you. It's easy and all you need is $1.00, and there is no maximum amount required. You simply pick your favorite real estate sector: apartments, hotels, office, shopping centers, malls or even data storage. It's kind of like Monopoly. You diversify with several different companies. Then you sit back and wait on your dividends."

I can hear my Uncle Bob saying: "Dividends. That's so boring Brad. I would rather eat a snake than invest in dividends."

I will then say, "Uncle Bob, one of the most important, and yet underappreciated, aspects of asset allocation and investing relates to the role that compounding plays in building wealth. In its most elemental form, compounding involves allowing wealth to accumulate over time. Don't you understand, Bob, dividends are magical and even Warren Buffett understood the concept when he said 'Life is like a snowball, all you need is wet snow and a really long hill.'"

By then, I will have everyone's attention. It will become clear that being boring and being wealthy are one in the same. I will then offer to provide some of my favorite dividend-paying REITs, and I will tell everyone that they can visit my Web site and check out my newsletter, The Intelligent REIT Investor. I will tell everyone that owning dividend-paying stocks is the ultimate way to "sleep well at night" and because REITs are forced (by law) to pay out more than 90% of taxable income, REITs are most definitely a great recipe for the power of compounding.

Brad's Boring REIT Picks

At the time of publication, Thomas owned shares of O.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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