The World Was at War. Coca-Cola Went Shopping.

In 1941, the world was in the throes of madness.

Hitler’s armies had marauded across Europe. The US had just been dragged into the war after Pearl Harbor. Millions of young American men were swapping baseball gloves for rifles, kissing their sweethearts goodbye, and heading off to places they’d never heard of, hoping they’d one day find their way home again.

Back on the home front, everyone was asking what they could do for the war effort.

Automakers built tanks. Factories churned out bombers. Hollywood made propaganda films.

Then there was Coca-Cola chairman Robert Woodruff.

Woodruff issued a simple order, for the Coca-Cola company “to see that every man in uniform gets a bottle of Coca‑Cola for 5 cents, wherever he is and whatever it costs the Company.”

Now, let’s not kid ourselves. Woodruff wasn’t suddenly auditioning for sainthood. He understood something most CEOs understand: if you can hook an entire generation of 20-year-old soldiers on your product, there’s a decent chance they’ll still be buying it when they’re 70.

Still, keeping that promise wasn’t cheap.

Coca-Cola built bottling plants across Europe, North Africa and the Pacific, following Allied forces wherever they went. It was an enormous investment, made in the middle of a world war. But after the war, most of those factories stuck around, forming the foundation for the global empire we know today.

Fast-forward eighty years…

I’ve just poured myself a Coke Zero

and now tap away on the keyboard to tell you that Coca-Cola has once again raised its annual dividend, marking the 64th time in 64 years that the king of soft drinks is paying shareholders more money for, well, holding the shares.

Woodruff made one of the greatest long-term investments in corporate history… and today’s shareholders are still collecting the return.

Wall Street calls this a “Dividend King.” Some call it a “Dividend Aristocrat.”

I call it a Lesson in Retirement Income.

And 30 years ago the lesson would’ve ended right there. Find a Coca-Cola. Collect the dividend. Repeat for a few decades.

Today? Well, it’s not quite that simple.

Last week I discussed how the dollar has changed since I first got into investing, but to briefly summarize: Thirty years ago, I didn’t spend five seconds worrying about the dollar. Find a great business, collect the dividend, rinse and repeat. Today, with the dollar facing structural headwinds, I want something extra: dividend income that isn’t tied exclusively to Uncle Sam’s greenbacks.

The reason: As the dollar slides in value against other currencies, the dividend payments you receive in a foreign currency buy more and more dollars at home—even if the foreign dividend doesn’t change—when those payments are converted into greenbacks.

A good example of what I mean is British American Tobacco, which I recommended to attendees of my inaugural Retirement Income Masterclass.

BAT, as I explained, was a way to play a solid company, selling a vice with incessant demand, with a long history of paying increasingly larger dividends in a foreign currency.

At the time, BAT was unloved, unfashionable. A tobacco company? In the age of socially conscious investing?

Frankly, all I cared about was that BAT sells a product in sticky demand curve, and it was yielding north of 5%. In my world view: Perfecto!

Since then, BAT has lifted its dividend from about £2.31 per share to £2.45—a roughly 6% increase over two years.

But as the “£” announces, those dividends were paid in British pounds… and we were collecting them in US dollars. And over those two years, the pound that bought $1.27 in early 2024 is now buying $1.33.

Run the math through the currency convert-o-lator and the dividend that was $2.93 in 2024 is now $3.26… a much heftier 11% increase in dollar terms.

Owning a foreign dividend stalwart did way more to help shareholders afford higher prices in America, simply because the dollar declined against the British pound.

And that’s our lesson today: You can fight inflation on the homefront by going abroad with some of your wealth.

Just own some of the world’s best dividend-paying companies, and the dollar’s structural weakness becomes a source of increased wealth for you.

Next year, Coca-Cola will almost assuredly raise its dividend for the 65th time. The media will announce it and fawn over that breadth of time for a news cycle or two… but somewhere in that same newspaper or magazine or business TV shows, they’ll give greater weight to inflation and the dollar that has weakened over the last year.

And somewhere in Des Moines, or maybe Poughkeepsie, or Reno, a Retirement Income Masterclass attendee will notice on her brokerage app that she’s just collected another dividend from a foreign stock and it’s even more than last time…