If you're like me (and I hope you are), you want to build wealth for life by beating the market. You want to stay ahead of the masses who stash their money in savings accounts (gasp!), bonds, and even index funds. There's nothing worse than knowing you'd be doing better by doing nothing.

But you face 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.

Greatest growth: Fueled by dividends
Master investors such as 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 three 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, too, can build one.

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

Another great long-term investment has been General Electric (NYSE:GE), which has paid a dividend every year for more than 100 years and has increased its payout every year for 30 years. Over the past 20 years, GE has posted 15.4% compound annual growth. Kellogg (NYSE:K), another substantial outperformer, started paying a dividend way back in 1925. The company boasts a 20-year compound annual growth rate (CAGR) of 10.5%. And then there's Avery Dennison (NYSE:AVY), a company with 70 years of history, which has grown its dividend 14% annually over the past 20 years. The company has another 11.9% market-beating, trailing-20-years CAGR. Not only did the dividends in these examples put money into shareholders' pockets, but they also indicated that management was confident in the future and that the respective business models were generating substantial amounts of cash.

These are good companies now, but years ago they could have been the foundation of your dividend dynasty -- a source of financial security for you and your family. Microsoft 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, the 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 unknown payers such as Motley Fool Income Investor recommendation Southern (NYSE:SO), a utility that has increased nearly 8,000% (or 24.5% annually) since 1986 -- and even more for folks who reinvested. You can even compare the company's recent performance to those of such big-name non-payers as Juniper Networks (NASDAQ:JNPR), Solectron (NYSE:SLR), and Symantec (NASDAQ:SYMC). Southern's returns are just as good -- if not better -- without all of the heart-wrenching volatility that can come with buying growth.

Great long-term investments are companies with rising earnings per share, limited dilution, manageable debt, and a consistent ability to deploy capital and use assets effectively. That leads to the richest treasure of all: cash. And that allows a company to reward shareholders with a growing dividend, which can be reinvested in a larger and larger ownership stake.

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 those paying substantial yields. (If that were the case, wouldn't everyone and his or her broker be building one today? The answer is yes.) Tomorrow's dividend dynasties are both dividend and capital gains growth opportunities. They're:

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

Search for these four simple traits, and don't ignore boring industries -- utilities, insurers, consumer products, banks -- or even foreign countries. Mathew Emmert -- who puts this strategy to work each and every day for his Income Investor subscribers -- is besting the market by 4 percentage points with less volatility. To view more than 50 of Mathew's favorite income stocks, be his guest at Income Investorfree for 30 days. There is no obligation to subscribe. Your dividend dynasty awaits.

This art icle was originally published on June 29, 2005. It has been updated.

T im Hanson does not own shares of any company mentioned. Microsoft, Wal-Mart, and Symantec are Motley Fool Inside Value recommendations. No Fool is too cool for disclosure ... and Tim's pretty darn cool.