If you're like me, you want to build wealth for life by beating the market. You want to stay ahead of the masses that stash their money in savings accounts (gasp), bonds, and even index funds. But you certainly don't want to lose to them. There's no worse feeling than knowing that you'd be doing better by doing nothing.

But you take on the risk of losing to the market if you stash substantial portions of your hard-earned dollars in non-dividend payers, underperformers, or, worst of all, non-dividend-paying underperformers. Because when your investment dollars stagnate, even the lowly T-bill will take you to the woodshed.

Master investors like former Vanguard Windsor Fund manager John Neff knew that a solid dividend payer is a lifelong investment. During his 32 years at the helm, Neff beat the market by more than 3 percentage points each year on the back of dividends, earning an extra $175,000 on every $5,000 invested in his fund. That is a true dividend dynasty. And you can build one, too.

Building your dividend dynasty
Wal-Mart (NYSE:WMT) has been one of the market's best-performing stocks, up nearly 100,000% since its IPO. And it's been paying and increasing its dividend ever since the company declared its first dividend in 1974. That's proof positive that a dividend doesn't hamper growth.

Another great long-term investment has been 3M (NYSE:MMM), which has paid a dividend in every quarter since 1916. And Bank of America (NYSE:BAC), another substantial outperformer, boasts 27 consecutive years of dividend increases and 13% annualized dividend growth. Not only did these dividends put money into shareholders' pockets, but they also indicated that executives were confident in the future and that their business models were generating substantial amounts of cash.

These are good companies now, but 15 years ago, they could have been the foundation of your dividend dynasty -- a source of financial security for you and your family. Microsoft (NASDAQ:MSFT) CFO John Connors expressed it best when he said, "Declaring a dividend demonstrates the board's confidence in the company's long-term growth opportunities and financial strength."

The secret to success
It may shock you to hear that the best stocks are not always those with the best products, biggest revenues, or even the largest profits. The best investment opportunities are those run by managers who want to create maximum shareholder value. You'll find amazing winners among unknowns such as United Fire & Casualty (NASDAQ:UFCS), which has risen more than 170 times over the past 30 years. Compare that performance with those of such big names as Xerox (NYSE:XRX), Texas Instruments (NYSE:TXN), and Bethlehem Steel!

Great management can come from anywhere, and it builds a company with rising earnings per share, limited dilution, manageable debt, and a consistent ability to deploy capital and use its assets effectively. That all leads to the richest treasure of all: considerable amounts of free cash flow, which allow a company to reward shareholders with a growing dividend.

As I see it, the dividend is the key to it all.

The cornerstones of tomorrow's dynasty
The stocks of tomorrow's dividend dynasty aren't just the ones paying generous yields. If that were the case, everybody and his or her broker would be building one. Tomorrow's dividend dynasties are both dividend and capital gains growth opportunities. That means they're:

  1. Underfollowed
  2. Undervalued
  3. Underappreciated
  4. Committed to creating shareholder value

To build your own dynasty, search for these traits and don't ignore boring industries -- utilities, insurers, consumer products, banks -- or even foreign countries. That's how Mathew does it, and he's already beating the market by 6 percentage points.

To view Mathew's four dozen favorite income stocks, enjoy a free 30-day trial of Income Investor. There's no obligation to subscribe, and a trial includes access to all back issues and previous picks, mid-month updates, current risk-adjusted values, and the Income Investor discussion boards, where Mathew posts regularly and where you'll find hordes of like-minded investors sharing wisdom, ideas, and analysis. Click here to learn more.

Tim Hanson owns none of the companies mentioned in this article. At the Fool, no writer is too cool for disclosure . and Tim's pretty darn cool.