Happy to respond to comments and questions. IMPORTANT: I will never leave a comment asking you to text or call me. If you see such a comment, even if it has my name and picture, it is spam. I delete them and report them to KZread as I find them. Let's all be careful out there!

@vinyl1Earthlink

2 жыл бұрын

Yes, those impers are getting out of hand. They have hit the Money Guy and Heritage Wealth too - an army of crooks. Most of them are Bitcoin scammers.

@bobwallace9753

2 жыл бұрын

@@vinyl1Earthlink To the right of each comment are three horizontal dots. Your portal to smacking spam.

@AkweliParker

2 жыл бұрын

I commend you for calling them out and booting them off. A lot of channel owners ignore them, perhaps to plump up their comment counts?

@sonny12681

2 жыл бұрын

Living off the Dividends are great when you also have a state pension that your collecting from. So basically living off of the Dividends is great as a side pension but bot a main pension.

@bobwallace9753

2 жыл бұрын

@@sonny12681 You're missing the point. Let's try a simplified example. Assume you have some money to invest. Company A's stock sells for $100. Company A sees no route for growth, they are a 'mature' company, so they take their 5% annual profits and send them out as dividends. Company A's stock price stabilizes at $100. Company B's stock also sells for $100. Company B sees a route to growth and rather than send out their dividends they invest in growth. The next year their stock is worth $105 ($100 + $5 reinvested) plus some earnings from growth. Each year Company B's stock gets worth more and more. And if you need to take out $5 by selling some shares your capital will still be growing.

4K shares of SCHD here! Just retired at 44.

@LiquidityOcelot

2 ай бұрын

NICE! I think you’re sitting in a great asset! Enjoy the increased cash flow in retirement (:

@henrymitchell9717

2 ай бұрын

Thanks! Just a note for anyone interested. If you’re looking at dividend stocks, the last thing you should look at is the dividend yield. You should focus on the dividend growth. If the dividend isn’t growing don’t buy it.

@AnxiousGas

2 ай бұрын

Pretty impressive. SCHD is just over 20% of my portfolio and I’m very excited about the recent reallocation. I’m gonna let it roll!

@henrymitchell9717

2 ай бұрын

Great! Yeah, nice one to chip away at buying more shares and just chillin. SCHD isn’t going to wow us in any market, but it just trucks along. It’s a nice stabilizer for a portfolio & it provides deceptively high cash flow over time. Mixing in some other great holdings is how to do it in reality.

@knockoutlightz

2 ай бұрын

@@henrymitchell9717 Is there an SCHD alternative that pays monthly? I’m 54 and just starting, I feel so behind.

I started investing in dividends with my taxable account. I used the buy and hold strategy in my Roth, adding some Berkshire B stock, SCHD, and an S&P 500 and total market exchange-traded fund.

@StocksWolf752

2 ай бұрын

When I started investing last year, I avoided significant mistakes. I've focused on investing modest sums in stable businesses for the long term. If stocks perform well, I hold onto them; otherwise, I reinvest losses into profits. Recently, I made $9.5k from a $4k investment in NVIDIA.

@EleanorBaker474

2 ай бұрын

Exactly, a good number of people discredit the effectiveness of financial advisor, but over the past 10years, I’ve had a financial advisor consistently restructure and diversify my portfolio/expenses and I’ve made over $3million in gains… might not be a lot but i'm financially secure and that's fine by me.

@StacieBMui

2 ай бұрын

Please who is the consultant that assist you with your investment and if you don't mind, how do I get in touch if you don't mind

@EleanorBaker474

2 ай бұрын

Sonya lee Mitchell is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.

@crystalcassandra5597

Ай бұрын

I searched her up, and I have sent her an email. I hope she gets back to me soon. Thank you

I like to have SCHD. 20% of each ROTH IRA Portfolio. Yield: 3.75% 60% SPY. 20% Various Income Funds, PFF, ILTB, TLT.....What are more interesting buys for long term growth? I want to get in with about 100k in cash savings lying waste to inflation

@gagnepaingilly

Ай бұрын

you need a certified financial planner straight up! personally, I invest in ETF's and also love investing in individual stocks. yes it’s riskier but am comfortable in my financial environment

@sommersalt88

Ай бұрын

Agreed, After taking charge of my portfolio in early 2017, i stumbled into losses. Upon realizing that a change was necessary, I consulted a fiduciary advisor in 2019 and since then my 7-figure portfolio has gained 28% annually through restructuring and diversification using dividend equities, ETFs, mutual funds, and REITs.

@Curbalnk

Ай бұрын

I've been looking to get one, but have been kind of relaxed about it. Could you recommend your advis0r? I'll be happy to use some help.

@sommersalt88

Ай бұрын

There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Jennifer Leigh Hickman” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.

@Curbalnk

Ай бұрын

I appreciate this. After curiously searching her name online and reviewing her credentials, I'm quite impressed. I've contacted her as I could use all the help I can get. A call has been scheduled.

Like Warren Buffet said, dividends are only good if the business you’re investing into can’t make good use of that capital. So if you’re trying to invest into businesses with actual growth, looking at dividends is a waste of time. Why are you investing into a company if they’re returning capital to you because they think you can make better use if it than they can. It’s not much different from bond investing. The way I see it if you have a $1 million at some point, that’d be enough to create a portfolio that would pay you between 50k-70k in dividend income...

@charlielipthratt7291

11 ай бұрын

@bobfletch. 1. It's not like bond investing because the taxes are much better with dividends being taxed as capital gains. 2. Using Buffet to diss dividends is funny. He loves collecting dividends! Buffet makes hundreds of millions of dollars just from Coke and Amex. A retiree has a better use for that capital! That dividend payment is their income without having to sell a share. And the dividend ETF also reduces the beta / volatility of their portfolio. I still think you should have a healthy mix of both value and growth even during retirement. But dividends are an important piece of the puzzle for many.

@joestacey9319

10 ай бұрын

Although Berkshire does not pay dividends, most of the companies he invests in do pay dividends

@John_Doe_6996

10 ай бұрын

When young, aim for growth, once you’ve grown a few million, switch to collecting dividends, you’ll never have to sell, and have a money supply forever, vs if you only had growth stocks, you would have to sell shares, and eventually you’d run out of shares and your acct will be empty… meanwhile the guy with 3 mill invested into dividends will never have to work again, never have to sell stock, and can pass the whole portfolio to your children, which they can build onto and retire early. Generational wealth…. But for growth in general there are much better options than dividends, such as various “option strategies”, covered calls, etc.

@stevenporter9114

3 ай бұрын

I couldn't disagree with you more. There are a lot of companies that pay great dividends. For that sake Warren Buffet makes more than "3 billion dollars a year" in just dividends. My own dividend account will be paying me over a million dollars in the next 26 months. (that is $83,333 a month)

@stevenporter9114

3 ай бұрын

Funny with the fact that Buffet makes about 3 billion in dividends a year

Well, I have been retired for 7 years, and I've been living off dividends and SS. I have more income than I need, so I use a lot of my dividends to buy more stock. I think my portfolio is pretty conservative, and it yields 3.98% - I wouldn't touch high-yield with a ten-foot pole. Yes, it is a dividend portfolio - I have 41 different stocks. I am aiming to keep my financial assets and income growing by at least 5% a year. So far, so good!

@donmountford797

2 жыл бұрын

If you have a portfolio giving off 4% on dividends, you definitely have some high yield stocks. Most stocks are paying less than 2%. Energy, utilities, telecom, REITS, BDCs are the sort of high yield sectors you would need to invest to get to 4%

@vinyl1Earthlink

2 жыл бұрын

@@donmountford797 - As I mentioned, I don't go for really high-yield , which is where you'll find BDCs and MLPs. Even worse are the the leveraged CEFs that some fellow in Forbes is always pushing - they'll crash when rates rise. Energy, utilities, preferreds, tobacco, drugs, REITs, and old tech is what I own. They're large-cap, relatively safe companies. One thing I didn't mention is a keep a large cash bucket, just in case.

@donmountford797

2 жыл бұрын

@@vinyl1Earthlink I personally would classify those as high yield as well. They are definitely lower growth, lower risk stocks but the trade off of those sectors is they may have difficulty keeping up with inflation. A 4% yield that only grows it's dividend 1 or 2% when inflation in 4 or 5% like this year, effectively means you will lose purchasing power. I definitely own some of these sectors as well but I also own some growth stocks as well to hedge my bets against inflation.

@jamesdarnell8568

2 жыл бұрын

@@donmountford797 Many growth stocks grow their dividends by 5% to 10% per year. I bought my Home Depot stock many years ago and now the annual dividend is nearly 10% of my original investment. Home Depot is just an example of non-high dividend stocks that can give you some decent yields if you invest in them ten years before you retire.

@donmountford797

2 жыл бұрын

@@jamesdarnell8568 correct. I like dividend aristocrats but they don't pay 4% dividends. If you are looking at your cost basis, than sure but not if you are looking at today's valuation

So buy both funds, growth and dividend . When you retire and you need to withdraw, take from the growth fund when the market is high. Take from dividend fund when it's low.

My experience many ppl psychologically have a tough time selling shares, living off div can help solve that problem. This solution is not math based is SWAN based. Good div growth stocks are much more stable than SPY and div do not fluctuate nearly as much as the market.

Great video! Actually convinced me that dividends will be an important PART of my retirement income strategy, with our social security and a 2 or 3% "spend down" withdrawal strategy, especially in go go years. I do have a mix of growth, value stock funds, international, bonds. One of my biggest motivators is hearing for years that a stock/bond mix and 4% drawdown is safe, and then 2022 happened!

If this mythical dividend investor is using 100% of their dividends to cover living expenses, then this implies that they are spending all of their social security income as well as all of their dividend income just to make ends meet. If someone is actually in that position in retirement and has no way of reducing their expenses, then the problem isn't their choice to do dividend investing, their problem is that they have zero safety margin and therefore have enormous risk. Ultimately, this really means that they don't have enough in their portfolio and it's too risky for them to be retired. It doesn't matter which investment method they chose, they simply lack the investment money to make it work over time. Either they make enough in dividends to pay the bills and risk dividend reductions, suspensions, or inflation, but don't have anything left over to reinvest, or they sell enough stock to pay their bills and don't have any means of replacing the shares they sold. Such a portfolio is very likely to decline in value over time unless some rare event gives it a big boost. Since this video was made at or near the market peak in late 2021 or early 2022, and it's now the beginning of 2023, it's even more clear how dividend investing can offer better downside protection and risk management. From the vantage point of early 2023, your method requires the investor to sell shares that have fallen in value by 20% or more in an inflationary enviroment where their expenses have likely increased. On the other hand, the dividend investor is likely doing better since they may not need to sell any shares unless their dividends don't fully cover the increase in their expenses from inflation. It may well be that their dividends increased enough to cover the higher expenses. I'm not saying that total return isn't the way to evaluate things, I'm saying that you've failed to account for risk in your analysis, and, as this last year has demonstrated, you can't ignore risk when making investment choices.

I don’t think anyone intending to live off dividends is investing in VTI, VOO or any other broad market index. Sort of a silly thing to start your video with.

@mjs28s

2 жыл бұрын

Thank you! His argument was terrible as was using the stupid 60/40 S&P500 / Bonds investment. Very easy, even today, to build a 4% dividend portfolio on high quality stocks that have increased their dividends each and every year. He also seems to assume that inflation can go up faster than your dividend increases but ignores that you might also have price appreciation. Well, is it only non-dividend paying stocks that appreciate in higher inflation environments? Nope. Easy enough to have the best of both worlds. This is a bad video. I like the guy and his channel but this video is a turd built up of seemingly selected paper tigers to make some point.

@paulgrecu2006

2 жыл бұрын

@@TimmyMorinII for the next 20 years I would take a this mix VZ, JNJ, WBA, LMT, OHI, MPW, O , TAP, MO, BP, EPD, SWKS, INTC, PG, TU, CTRE, LAND, GD, KT. I didn't calculate but the yield is probably close to 4% . If a few disappear in the next 30 years I am sure a lot will be multi baggers. Besides if worried all this companies will go away it is likely the world is ending and who cares about your investments then. Of course you always adjust positions or add some undervalued once in the future.

@cdm1949

2 жыл бұрын

@@paulgrecu2006 so basically a portfolio of 80% hope and 20% stocks.

@cdm1949

2 жыл бұрын

What kind of idiotic comment is this?

@cdm1949

2 жыл бұрын

@@mjs28s have you even watched the full video?

I think a lot of dividend investors will be using much higher yields respective to those first few examples. Plus, even in retirement you can reinvest what you dont need which will help out the portfolio through the years.

@3inchMorningwood

2 жыл бұрын

Great point, even in retirement, all the leftover (even $10, $30 or $50 a month) will help grow that next paycheque and compounds itself as you grow older.

@dallaslucy

2 жыл бұрын

i agree, my portfolio yield is around 6.5%. I reinvest my dividends and I also just used some dividends to by some stock in Apple. The dividends don’t only have to be used for dividend stocks

@cdm1949

2 жыл бұрын

All his examples have dividend reinvestment on.

@muffemod

2 жыл бұрын

dividends yo

@junbuggonzalez3759

2 жыл бұрын

@@cdm1949 2% yield. id buy more high yield stocks i already own near retirement and increase my yield to 5-8%.(still safe due to diversity/sectors) im covid proof at this point.

A comment I've recently heard that resonated with me is that value *is* growth. What most people think of as growth is in reality speculation on overvalued assets, and while these assets can grow prodigiously over short periods of time, they aren't going to beat the growth of underpriced and fundamentally strong value companies over the long run.

hi Rob, the flaw I see here is you are focusing on dividend funds instead of a basket of high quality dividend stocks that you can pick up when are under valued giving you a high yield

I’ve been loving your videos! Solid information. Keep it up.

all I know is that I wasn't really investing for dividends, and since I switched up, I am now earning $3,051.17 per month YTD. I still have another 10 years until retirement, so I keep reinvesting it for now.

@ethanlibera4876

2 жыл бұрын

Your gonna be set lol, even if they slow down a lot

@user-wm9hr7jg4u

2 жыл бұрын

Steven, what do you mean by "switched up"? Could you be more precise or give an example? Tnx!

@andrewcole1815

2 жыл бұрын

Well done sir. Depending on where you live, you are pretty much there.

@kopper7509

2 жыл бұрын

I’m thinking about this approach. Reinvest dividends now. Then when it’s time to retire, only use the dividends necessary to live on and reinvest the excess to keep up a little with cost of living increases.

@andrewcole1815

2 жыл бұрын

@@kopper7509 precisely, and the actual growth you get should cover inflation. Keep it diversified as wide as possible to give yourself more opportunities of growth from someone outperforming their sector. Best of luck sir.

THINKING OF LIFE AFTER RETIREMENT is really a pain in the ass…. What’s the best advice for someone worried over Retirement

@HamiltonRb

2 жыл бұрын

@Rob Lowe Fame spam

@Mark-Hall

2 жыл бұрын

@Just Joe Or the balkans...

@jo4285

Жыл бұрын

@Rob Lowe fake news !

@rolandostaelena

Жыл бұрын

Is this a serious question? Do you really think someone has an answer for you? This is going to sound overly aggressive, but grow the hell up! Take some responsibility. Use your brain to help yourself. No one else will. Especially strangers on youtube. For proof, just look at the previous answers. 😂😂😂😂

@elke9161

Жыл бұрын

@@rolandostaelena Thank ill-mannered MF __ I got the help i wanted

The thing to me is, if you invest and have other income outside of dividends then you will be able to live off dividends without selling. Which means you can pass that on to your kids which will give them a leg up in life. $52k dividends received in 2022.

@Jamessmith-12

2 күн бұрын

I agree! That's why it is advisable that you have to invest while you still have a regular job or earning a regular income, and do it constantly. You still need to have something that will keep you going even if you're investing. Good financial planning and money allocation is the key.

@JacquelinePerrira

2 күн бұрын

The best course of action if you lack market knowledge is to ask a consultant or investing coach for guidance or assistance. Speaking with a consultant helped me stay afloat in the market and grow my portfolio to about 65% since January, even though I know it sounds obvious or generic. I believe that is the most effective way to enter the business at the moment.

@kevinmarten

2 күн бұрын

please who is the consultant that assist you with your investment and if you don't mind, how do I get in touch with them?

@JacquelinePerrira

2 күн бұрын

I'm cautious about giving specific recommendations as everyone's situation varies. Consider independent financial advisors like ‘Carol Vivian Constable’ I've worked with her for years and highly recommend her. Check if she meets your criteria.

@kevinmarten

2 күн бұрын

I looked up her name online and found her page. I emailed and made an appointment to talk with her. Thanks for the tip

Great video, glad a stumbled on your channel, another perspective for my portfolio

Rob I just discovered your work and it’s resonates well with me. I’ve been retired for about 5 years and I created my retirement fund using dividend growth stocks ….long story but it worked well yet I’m well aware that a bull market did most of the work for me. My first month in retirement I realized that I did not have to live off of dividends but I could live off of trimmings of positions that had gotten to large…again the bull market helped make this work ….recently I woke and realized that a total return focus with an eye to dividend growth makes me very comfortable

@sanekabc

2 жыл бұрын

One basic question I have as I am not in the market, which I would appreciate your opinion on. If you knew you were going to die in 10 years and had a lump sum of cash, would you still put it in a market portfolio or keep it in a savings account in a bank?

@philipwilliams6276

2 жыл бұрын

@@sanekabc Market Portfolio every time for me mate. Money in a savings account will not have the same value as each year passes due to inflation.

@horizontaldad

2 жыл бұрын

@@sanekabc market indeed and start education of heirs

@JamesGraydon

2 жыл бұрын

@@sanekabc Market portfolio everytime. Invest, dont save.

@donkeypox1943

Жыл бұрын

@@JamesGraydon Nahhh u guys have it all wrong; start slabbin and stackin Garbage Pail Kids for generational wealth!

Not living off them, but having them available for unexpected expenses if required. I have dividend funds that provide monthly dividends per share that I reinvest at this point. Yes, the dividend amount per share is low, but it can help. Dividend income funds are low risk and the dividend yield is much higher than a CD.

Just my 2 cents. if your retired and using the dividends as added income then your probable don't need to have the growth.

@mortalhordewarrior9285

2 жыл бұрын

Anyone retiring in 2007 with a portfolio of growth stocks like this guy suggested... killed themselves. And not just a few, a lot did.

@OT-bo8kt

2 жыл бұрын

Most dividends increase dividend to keep up with inflation. You should have a 3 year emergency fund in case of the unforseen

@shadedlightdigital

2 жыл бұрын

Who uses such low bond funds as any kind of example for anything?..just saying..

Great content! Subscribed. I'm 31 learning about this now so I can start asap. Seems like I have more to learn as now I see there are multiple options/funds/etfs. I'm glad I waited until watching this because I was about to invest in a few high yield.. hope to learn more in the next video

As many others have pointed out there are quite a few blue chip stocks with dividends in the 4-6% range and many of those stocks consistently raise their dividends annually and have done so for many years. Furthermore qualified dividends are taxed at 0% until the income for a retired couple goes above about $119K in 2023. You do need to buy individual stocks though.

@stevenporter9114

3 ай бұрын

Not sure where you get the $119K. Married filing jointly for 2023 should be $89,250

@todddunn945

3 ай бұрын

@@stevenporter9114 I added in the standard deduction since the 89K is after you subtract the deduction.

The book get rich off dividends explains it perfectly. You buy high quality companies with 3% or more divy and raises it yearly at least 7%-10% and in 10 years or more your dividend will be 6% or more and if you then retire you have a basket of stocks like this paying you 6% or more and they still raise each year giving you raises each year from the dividends you are living on.

@starmorpheus

Жыл бұрын

That's a lot of assumptions for 30-40 years down the line. Just picking the top 20 stocks from the Dividend Aristocrats list, will not give you 6% dividend yields. The yield on cost would still be the same, because you're reinvesting over the course of that time, until you retire.

I’m desperate to preserve and grow my portfolio of $800k, What retirement investment approach should I take to create a comprehensive portfolio allocation that balances the concerns of risk aversion and returns that meet yearly inflation

@brooksaugust4380

2 жыл бұрын

As you plan your retirement, be sure to talk with a financial advisor who can help you make the most of your retirement investing scheme.

@mihandsplitters705

2 жыл бұрын

Desperation will lead to mistakes. Stop, take a breath, and think things through. I am very simplistic in my approach. Do I think things are going to be better or worse one year, three years, and five years from now and invest, not gamble accordingly.

@daverobey9027

4 ай бұрын

One thing important is as Rob says, play in the middle of the road. Some growth, some dividends. It doesn’t have to be either or.

Thank you so much for showing us portfolio visualizer! so much value in this video it's crazy.

Thank you Rob, I’m glad that I came across your channel. My future self thanks you

New subscriber Really impressed with your content and your approach. Have a small objection or possibly something to consider for a future video. The scenarios you looked at where from the last 10+yrs (the markets have been fed by low inflation, high liquidity, low bond yields) I am expecting this to stop and reverse and I would like your opinion in the same scenarios but in an environment simulating the above? I believe that was the 70 and 80s ? And how that would affect the returns...

A 2 million dollar portfolio with a 5% dividend yield (Aristocratic stocks) is 100 k a year. That’s fine with me. Especially being paired with multiple pensions and real estate-that my position and plan.

Enlightening, as always, thank you. Given the current situation, would you modify this advice, or does it still apply?

@rob_berger

2 жыл бұрын

Not at all. I take the dividends the market gives me, but I don't seek more than that at the expense of total returns.

Great Vid! What do you think about BLV? Pays a div of almost 3 compared to BND. Thanks Jeff in NY

He makes very valid points in regards to yield, and fluctuations, however the dividends are far more predictable than the general market. I don’t care what anyone says, diversified blue chip dividend aristocrats & kings should DEFINITELY be a large portion of your retirement income stream. I see people who are strictly in growth stocks and how nervous they are when they are approaching retirement. NOT ONE, I repeat NOT ONE has retired on time, they all work at least 2 years extra, some have to sell their homes as well, and most don’t have the lifestyle they imagined they would have.

@miguelservetus9534

2 жыл бұрын

What are kings?

@lawrenceweston922

2 жыл бұрын

@@miguelservetus9534 Dividend Aristocrats - Increased their dividends for at least 25 years Dividend Kings - Increased their dividends for at least 50 years

@starmorpheus

Жыл бұрын

@@lawrenceweston922 Past performance does not equal future results.

@starmorpheus

Жыл бұрын

Investing in the S&P or Total Market and you skip all games, buy and hold.

My dividend portfolio is more like 3%, not 1.7%, with some companies paying as much as 8% and most of them have a long history of profitability, FCF and dividend growth. In my opinion, you should never truly retire and you should get to know a bit the stuff you're investing in and why. Keep actively investing in dividend paying stocks (even if you trail the S&P500), for one thing, it keeps your mind occupied and almost always has better returns than bonds or those stupid cash deposits. If you have kids, never sell your stocks, keep it in the family forever.

@HateTheIRS

2 жыл бұрын

Some bond ETF’s have a pretty decent dividend payout. Like BLV, VCLT ticker symbol Maybe SPYD? It tracks the S&P 500, except the top 82 dividend stocks. So it’s essentially an index. I like index’s tbh.

@billyjohnson9166

Жыл бұрын

Berger is all wrong this video is a mess. Also holding bonds is old school

@Gregoman89

Жыл бұрын

Mine is 3.91

@jonnelson9760

Жыл бұрын

Mine is currently 6%, but that is because of the drop in the market. I do not expect the stocks in my portfolio to have a lot of growth but then I don’t have the time left to wait. I look for recession resistant companies that provide an essential product. If the dividend is cut then I will sell and look for a replacement. He focuses on averages. If dividends were lowered then you could always revert to his strategy.

@TheForge47

Жыл бұрын

Did anyone using preferred shares? There is 6% the normal yield 🤷

Thank you for your insight on the other side of the coin. Both opinions are necessary to decide what would work for a person.

Thank you for this info 👍

Dividend investing isn't a one trick pony in my opinion. There's a lot of ways to adapt it to your personal situation. EDIT: Not to mention the power of tax free income for qualified dividends. That's huge for someone like me that's happy living on far less than $40k a year.

@HateTheIRS

2 жыл бұрын

Isn’t 0-40,000$ taxed at 0%? If you’ve held it for more than a year? And then 41,000-450,000 is taxed at 15%, and then anythint above that is 20% tax?

@redtops5160

2 жыл бұрын

I can't live on less than $40k here in No. Virginia, 11miles from DC. Our real estate tax are about 1.08% per assessment. Plus a 5.5% state tax on income. Slap on your 15% Federal tax and < $40k is going to go far. Where do you live?

@HateTheIRS

2 жыл бұрын

@@redtops5160 5.5% tax for dividend income? Thought dividends were taxed differently than, earned income.

Answer to all of these points. 1. Have an emergency fund to ride out a recession. 2. Your stocks will increase in value over time, sell the stock, immediately reinvest it, and boom, more dividend income. 3. Better to rely on dividends even in a recession than literally selling 4% in a recession. Again, emergency fund.

@dlyroadrunner

2 жыл бұрын

👍🏾👍🏾

Thank you for being REAL with dividend investing. I've seen so many investing channels say dividends are great this that and the other. But they never hardly ever give the downsides of dividend investing.

@davidbrooks8809

2 жыл бұрын

It's so confusing!!!

@theirshopewithjesuschrist_5867

2 жыл бұрын

@@davidbrooks8809 I know it can be but you have to pay attention to what your doing and really study the stock market just like any other type of stock investing

nice info! that's my hang up with retiring, selling my shares to live on. cutting of the branches on our money tree

Sorry if this is a dumb questions but regarding the first example portfolio, wondering what the effective yield would be if you substituted the Vanguard Balanced Index fund (VBIAX 60/40 mutual fund) and included not just dividends but capital gains distributions. What would that same starting $1M yield vs the ETFs in your example?

@alrocky

2 жыл бұрын

Not a dumb question but so far remains to be seen if *RB* is _smart_ enough to provide answer. "Happy to respond to comments and questions." --- *RB*

50% of my investments are blue chip that provide good dividend yields. The rest are growth stock ETF. Any big ticket leisurely expenditure are funded using dividends. What's not used I purchase more growth stock.

You do a really good job. Thank you.

Great job. I'm about 5 to 8 years from retirement, and the portfolio visualizer is a huge help. Past performance is no guarantee, but it provides a decent enough guide.

I like my money working for me even if the stock is boring. My average dividend pay out is 4.5 % slow and steady wins the race.

@MoEMoE-oo9gw

2 жыл бұрын

4.5% payout? You mean yield?

@ 3:11 Rob, you seem to make a big oversight... you did not _subtract_ the shares from Portfolio 1 you'd have to sell to match the dividend payouts for P2. So you can't then compare the long-term growth of P1 and P2 and conclude that P1 was the better option, because the P1 you show is the balance _without_ having sold any shares. So you've not shown that P1 was the better option. You have to run the model of matching the dividend payouts of P2 with shares sold and _then_ compare P1 and P2. Granted, you're probably right nevertheless, but it would be nice to prove it. The shares sold of course lower the balance by a larger % over time than the relatively small amount they are per year. So it would be nice to be sure.

@AK-ky3ou

2 жыл бұрын

It takes into account shares sold by taking a draw. Do you not understand this?

@iamgoddard

2 жыл бұрын

@@AK-ky3ou, sorry, I don't understand that. Seems to me, with Portfolio Visualizer, you'd have to be able to selectively sell shares for only one of two portfolios (the VOO portfolio) being tested side by side and also selectively not reinvest dividends for only the other portfolio (the dividend ETF). But that functionality does not exist, and Rob only did side-by-side tests. However, you can run two separate tests, one on VOO with an annual withdrawal equal to the avg annual dividend yield, and a second test with a chosen dividend ETF with reinvest dividends turned off. I did that, btw, and Rob's thesis held up, VOO was a better choice over the past time frames available.

Hi Rob, I have recently discovered your videos, and find them the best on-line advice, or any media, for that matter. Have you previously done a comparison of the advantages/disadvantages of mutual funds vs. ETF 's? Thanks.

I do dividend stocks but maintaining my Capital is just as important. No losses thank you. S & P is down 10 % this year. I am even and have selected MLP`s, a few REIT`s etc etc. I always consider charts..Many high dividend options have not done well for this yeat however. Be carefull and chart chart. I look forward to some growth stocks once their downturn stops. Good advice.

@randomyoutuber308

2 жыл бұрын

I'm with ya man. I love letting my dividends build up in my account rather than reinvesting as they get paid out and always having some cash on hand to go bargain hunting when an opportunity arises. Its an oddly nice feeling when your portfolio dips a bit but you just don't care because you know its also a buying opportunity. I've had some down years in the past but I've yet to see a year where my dividend income shrinks.

I have a basket of 60 dividend stocks all rated safe by simply safe dividends , also use Fastgraphs. My current yield is 4.6%. My portfolio dividend yield increased even during the Great Recession. It is very possible to live off of dividends which are far less volatile then price which as we know what easily change radically but with the right stocks one really does not really even need to worry about price much.

@MarcPugh

2 жыл бұрын

Same strategy I am using. My beta is .59 and yield 4.2% in 45 stocks. I sleep better than relying on Just VTI or VOO.

Very flawed logic. Have you ever heard of a dividend portfolio? People have been building successful portfolios to live off of dividends for a long time now

Great video where can I get those tools with the back testing?

Hey Rob what is your opinion on being invested in sp500 ETF for the majority of my working life and then switching to a high dividend ETF when nearing retirement.

Rob. I am 73 years old with an MBA and MS in engineering. And I do dividends just fine. ETFs might be diverse but that is not such a good thing. I would rather have ten great stocks than 500 average performers in SPY. Try these five in your calculator MO PCI ETW EPD and XOM. Your $1m portfolio jumps from $17k to around $70k offhand figure. Complement that with covered calls at 3 % OTM and maybe 10 delta naked puts to see a huge increase in monthly income on the three with options. In my view seeking 1.7% spy dividends is less than wise by any metric. It might be smart to grow your portfolio in you 40s but not during retirement. My minimum acceptable yield is inflation plus risk. Today that is 5% plus 2.5% for risk. Or 7.5% yield. This assumes most of my expenses are fixed such as mortgage. Mine is 2.25%apr. Your four models are fine for your set of assumptions and mine project inflated dollars due to government spending in the trillions.

@HateTheIRS

2 жыл бұрын

R P - you realize there are, S&P 500 growth ETF’s, that outperform the regular S&P. Like, VUG, outperforms VOO. Ticker symbols. And or, there are S&P 500 dividend ETF’s like, SPYD, low growth, but a stable 3.7% dividend. I hate to critique, but I would not invest in any of the dividend stocks you mentioned. XOM, for example, that stock is too volatile, and capital appreciation, is pretty bad, unlike SPYD, which consistently returns 4% on average. And I feel like 5, or 6% dividend is too high. That’s just unsustainable imo. I think 4% is the sweet spot. Or personally, if I ever did invest in energy stocks, I would invest in XLE, at least, it’s an index which has decent dividend.

@HateTheIRS

2 жыл бұрын

R P - Jesus Christ I just looked at ETW. That fund is slowly bleeding to death. Look at the entire history, it’s losing its value over time. Sure you have an 8% dividend, but that’s just insane. It’s slowly losing value over time. How will you ever recoup your principle investment?

@2023Red

2 жыл бұрын

@@HateTheIRS ETW just does Covered Calls. Nothing more. Price appreciation is not the objective here. It is just a steady check a month. Like any premium the actual check will vary with the underlying and IV. By the way I do not own ETW today as I do not need those monthly checks. I do mostly futures and options. Thx for your sharing your opinion.

@HateTheIRS

2 жыл бұрын

@@2023Red but why would you invest in something that’s losing value?

@2023Red

2 жыл бұрын

@@HateTheIRS Perhaps you think differently that I. One either milks a stock for income dividends or buy to sell later for a profit which seems to be your goal. Or uses neutral to bullish stocks for covered calls. All are okay. In my case I do them all as diversification plus I do short selling. It is a fine wY to make money by passive investing just for dividends but it takes a large account to make sufficient income to live on. Etw is flat but generates a fine monthly check. Better than inflation. Better than your cd. This is just one example. I hope I answered you. .

It really depends on each person situation, let’s say you have a pension after retiring that covers all your monthly expenses and just need enough to complement your yearly fun expenses… during a recession it wouldn’t matter because is not money that you are needed to live. It’s all situational

“Risk of underperformance” but not risk of becoming destitute and panhandling for lunch.

If price of the share goes down it doesn’t mean that you are going to have less dividends, the dividends go associated with the number of shares you have

I'm 5 minutes in...I feel like Joseph Carlson would have a field day with this

Calm, logical, non-emotional analysis. Just the facts. Love the channel.

Rob, have you ever shown your portfolio? Just asking. Is it the 6-fund Vanguard portfolio you have done a video on?

Used to be able to just click on a video on youtube and it would play. Not anymore. Now you click on it and the icon gets bigger. Then you have to click again to play. Seems a lot better to me.

Dividends from the stock market encouraged me to begin investing. What matters, in my opinion, is that if you invest and make additional money in addition to dividends, you will be able to live off of dividends without selling. It implies that you can provide that benefit for your children, giving them a head start in life. I've invested more than $600K in dividend stocks throughout the years; I'm currently buying more today and will continue to do so until the price falls even further.

@Rodxmirixm

7 ай бұрын

Hearing from an experienced investor who has survived the crisis and prospered is always comforting. It could be worrisome when your portfolio goes from green to red, but if you have invested in strong firms, you should just keep growing them and stick to your goal.

You are truely living off dividends when your dividend income passes the accumulation of all other retirement income (pensions, social security, ect), IMO. I am about 70 percent there. I have been getting some nice dividend raises lately, so hoping to cross over in 5 years.

@carlbook2051

2 жыл бұрын

It depends on how much you spend.

@MrLaughingcorpse

2 жыл бұрын

Hopefully it's a lot more than a measly 1.7%.

@supersteve8305

Жыл бұрын

Just as a follow up, I will cross over this calendar year. It actually will only have taken two years. 2023 dividend income will be more than my pension income. Dividends do work, and I'm very glad to be a dividend investor.

Dividend investors typically don't buy whole market etf's to live off dividends. They buy stocks from dividend paying companies with good track records of increasing their dividend. I am getting 10% yield on cost from some of my earliest buys of over a decade ago.

@kellyfrench

Жыл бұрын

You aren’t alone, I noticed this too. I found it interesting that he would show a portfolio with a mix of bonds and index funds yet only consider the dividend yield, it sounds like he has purposely diluted the yield of the bonds and actual dividends by lumping both together and not including price growth.

@pmgraper1

Ай бұрын

I am also getting about 10% yield on my ROTH in dividends and that does not include growth.

Rob -Question. What are your views of living off capital gains distributions in retirement? (in addition to living off dividends). This would be using your 3 fund strategy…. Thanks in advance

The dividend yield citied is rather small. By tracking the broader market your yield is going to be small. But concentrating on blue chip dividend kings you can double the citied dividend yield. Second is you can ignore short term gyrations of the market swings because dividends are far more stable. Yes dividends can decline or disappear, But I managed through 2020 and dividends did not decline all that much.

@randomyoutuber308

2 жыл бұрын

Exactly. I love to let my dividends build up in my account rather than immediately reinvest so I always have some cash on hand to go bargain hunting. During the covid crash I watched my portfolio shrink and just shrugged it off, toss what I had on the sidelines into the market, and watched my dividend income rise. I've seen some down years while working on my dividend portfolio but I've yet to see a year where my total dividend payout shrinks.

My current yield on invested funds is 8%. I more than fund my retirement lifestyle, and no, I’m not invested in “risky” assets. High-yield dividend investing is a wonderful way to fund a retirement.

@robertw477

Жыл бұрын

My old saying still applies. It works until it doesnt. I knew somebody many yrs ago with similar maybe a little higher returns because he would sell above the money calls to collect the premium plus the stock div. Worked amazing for 5 yrs. Then the roof caved in. Remember many of the high div stocks are paying out everything they have. you are not getting anything for free. Its what they are making vs the appreciation of the stock that payout involves.

@prancer4743

10 ай бұрын

I agree and are invested in an Australian bank 1 million plus at 7% plus’s 30% franking total 102 thousand a year happy days for me and own my home 🙂👍💰

1% is great. Never rule out dividend growth. Compounding power is very powerful if you know how to use it and understand it.

There is no dichotomy of Growth and Value. A growth stock can become cheap during a crash turning it into a value stock, but it doesn't stop being a growth stock. Some growth stocks became cheap during the covid crash of March of 2020 and went on to double, triple or quintuple in price. Some sites seem to consider "Growth" as a synonym for over-priced.

Good video Rob👍I agree total returns better. However, why drop a mil into 1 fund. Drop a mil equally + buy 250K worth of S+P 500, Total Market, Value, + Growth index funds, or buy 250K of VIG, VYM, VNQ, + SCHD, or split mil into 333K of index funds, 333K dividend index funds, + rest into good dividend stocks.

Dividends are not necessarily a bumpy ride. Focus on companies that consistently grow their dividends. Watching the dividends grow makes it easy to ignore when your total return tanks. 20 years personal experience so far, great times. Looked back and also great times. Selling shares is a one way street. It isn't the journey that is a problem it is the ending.

@c0wboys4life

2 жыл бұрын

Any companies you recommend? I have a mainly dividend based portfolio actually get dividends every week with what I have, but wonder if I can maybe find some better stocks or might be on a good track

@cdm1949

2 жыл бұрын

And there are index funds which do exactly that. Did you even watch the video?

@HateTheIRS

2 жыл бұрын

@@cdm1949 there are dividend ETFs, this is not financial advise I’m simply making you aware of some examples, do your own research. I’ve seen, SPYD / HDV (dividend ETF) VCLT / BLV (bonds ETF) SCHD (lower dividend ETF)

@GunterD1337

2 жыл бұрын

dividend investing is not bumpy at all. I'm doing it for a long time and so far my dividend income never decreased on a year to year basis. never. not even in the "great financial crisis". pick quality companies with a long history of raising dividends and diversify. have a lot of them. in the unlikely case one of them does cut or just doesn't raise it you have 50 other companies that do raise. chances of having half your stocks cut the dividend is almost zero if you picked quality.

@HateTheIRS

2 жыл бұрын

@@GunterD1337 or pick a dividend ETF

Hi Rob. Excellent video, but I hope you can clarify something for me. If I'm invested in a portfolio of high-yield ETFs like JEPI, DIVO and SCHD which will generate an average 4% in "dividends" as well as growth, then I should be able to live on 6% (4% dividends + 2% withdrawals), pretty much indefinitely, right? These funds have a great track record of growth and income and since my withdrawals are only 2%, I'm well within the 4% rule. Is there something I'm missing?

@internationalplayboy8685

Жыл бұрын

@Iterum Life, JEPI and DIVO hardly have a long proven track record, they are a disaster waiting to happen. They will blow up eventually, it is unavoidable, did you learn nothing about leveraged financial derivatives from 2008. SCHD and VYM are both solid selections however.

When you compare VYM or VIG to the s and p 500 and compare them on total returns Are you reinvesting dividends? Where is that money accounted for? Thanks

I’m looking at Dividends as supplemental income. I’ll hopefully have decent retirement savings and government pension and then dividends would be extra income.

@starmorpheus

Жыл бұрын

When a dividend is distributed, the stock's price goes down. That's how dividends work. Don't get where you think dividends are "supplemental" income when you can just sell the amount of the stock you need for the same amount. The only difference between a $1mil dividend portfolio and a $1mil index fund growth portfolio in 30 years, is that the dividend portfolio will have more shares. Many dividend investors crack me up with their misguided thinking. I sell one share of my VTI fund = $206, you sell one share of your SCHD = $75.00. See? Math. I know. it's amazing. I can sell half my share, for $100, and even less to match the sale of your share. It's not magic. I think you gotta understand that at the very least.

The whole thesis is based on the idea that the government keeps up massive stimulus plans, low rates, and QE that juice the SPY market. If we ever go to a normal economy that has to stand on it's own without government manipulation the good dividend companies that make cash on necessities will be the better bet.

When the figures get bigger and bigger to a point that any loss would equate to your many years of working, stability and security becomes the no 1 priority.

At 11:11 you should compare the two as follows: for each one, take the ending value of the shares (as you are doing) and add all the dividend income that was taken out to that. Only then are you assessing the total return. Otherwise you exaggerate the extent to which the S&P 500 one appears to have done better.

$1M in AT&T gets you around $70K a year in dividends. No reason to work.

@RiffRaffGuy05

2 жыл бұрын

AT&T will be cutting their dividend by half in 2022. They are spinning off WarnerMedia.

@user-wm9hr7jg4u

2 жыл бұрын

@Who Cares?Why? Even if you reinvest the dividends, you pay tax on them, right?(if in taxable)

@fieldy409

2 жыл бұрын

Well this videos about retirement, unless you are completely decadent and over the top I don't see how you could run out of money with a million dollar stock account in retirement even ignoring dividends before ya know, you die!

@wread1982

2 жыл бұрын

Would be minus 23% of 70k in Kansas if held in a taxable account with long term capital gains. Short term capital gains tax here is 37%

@fgauer1

2 жыл бұрын

@@fieldy409 Indeed. Why be bothered about growth when it is all is eventually to be given up anyways? A peaceful retirement with enough to meet reasonable needs I say.

Yeah great discussion! I'm super into dividends, ands it's addicting to watch the my total dividend income grow each time I buy new shares. But I am in my 30s, and although I track my dividend income very closely, I'm primarily interested in overall portfolio growth. Most of my high performing positions in terms of overall gains, have dividends below 4%. I do like knowing that incase something goes sideways in my life in the future, I will have predictable cash flow that I can draw from if needed, but so far I always reinvest the dividends. My overall portfolio yield is usually around 3.5-4%, but when I retire I think I will actually switch many of my positions to higher yield stocks, perhaps around 5-6% that still grow slightly in dividend, and share price. At that point Ideally I think I could live off 5-6% without selling shares. I'm suspicious of those yielding 10%+ so I generally avoid them. But yeah, dividends are cool, and I still have like 30 years to reconsider my strategy 🤔

@mannythompson8800

2 жыл бұрын

Your yield-on-cost (price you paid for the share equal to the dividend yield) could most likely be higher... For example, you buy Apple shares that are currently yielding .57% yield. If you buy a share of Apple today, hold it for several years, your future yield-on-cost will be higher because they do dividend raises. their future dividend raises will be based off of the price you paid today (or your cost basis, which is the average cost of all Apple shares you own, with purchases made over time). I only use Apple as an example because it is a solid growth play that also pays a dividend and does big share buybacks. You can expect an even bigger yield-on-cost by purchasing large blue chip companies with a long dividend history, growth and dividend growth addition. Buy an dividend ETC like SCHD, VYM or VIG, and hold them for years. Or buy single stocks like Duke Energy, Microsoft, Home Depot, Proctor & Gamble, who pay decent yields today that will most likely grow in the future, giving you a higher yield...

@terriblepainter7675

2 жыл бұрын

You don’t mention what your income bracket is, make sure your dividends don’t get taxed too much. In your 30s I would just go with a low dividend index fund or Berkshire Hathaway (no dividends ) and shift into dividends maybe for retirement. You loose in growth when focusing on dividends at your age. You will have a higher portfolio value.

I have a 3 fund portfolio with a yield of ~ 4%. Safe withdrawal rate for retirement according to PV should be ~ 7.7%

Great video

I have been doing some research on a bunch of EFT dividend yeilds on the TSX. I have found quite a few that are as high at 15%. It does take a lot of work and research. But it is worth the time.

@WookieSenshi

2 жыл бұрын

Sure, but how has the long term performance been? I'm all for dividends but I question the safety of such a large yield.

Rob, Great video. However, I am a bit confused about this part: You say that living off of dividends is a bad idea, but WHAT IF I can live off of 1.7% ? Social Security + Pension + 1.7% of the portfolio covers living expenses and even leaves some money for travel and emergencies:) Isn't this a good thing that I don't have to sell anything??

@carlbook2051

2 жыл бұрын

I think you're in good shape.

@humboboldt

2 жыл бұрын

It is a great thing. I suppose this percentage (1,7%) is not enough if you have not accumulated a lot of money compared to your monthly expenses. For example, I invest a good amount of money every month that, if I keep investing this same amount of money throughout the years till my retirement, I could live off of the dividends (supposing a 1,7 DY)

@WestCoastUSA546

2 жыл бұрын

He said that some ppl CAN live on that, especially combined with other accounts. And that's just common sense, as for those ppl it will be just a supplemental income.

@cashflow68

2 жыл бұрын

Rob, I agree with you. Im currently living off my pension, my wife ss and 35k yearly dividends. I have no debt except utility bills. Im fine with 1.7% but averaging about 2.9%. Waiting until 70 to collect SS. 8% increase per year after full retirement age is not bad if inflation is at 7.5%.

@Omni-King2099

2 жыл бұрын

He answered that question, go back and review

I'm 29 now I started investing into ETF last year, I have been investing into retirement for the last 5 years from a deferred comp and retirement plan from my job. I'm curious to see who much money I will have when I retire in 16 to 20 years. But if you can afford it small investments can be good for generational wealth.

I liked your video. The most helpful tidbit of information for me was to focus on total return instead of dividend yield. Total return ensures your investments grow while providing income.

Investing in companies that pay less than 5 percent dividend won't do much for your retirement. My dividend yield averages 10 percent. With drip investing and compounding, my dividend income continues to grow. Best investment strategy I ever chose...wish I had done it sooner.

Hello Bob, great presentation. My view: I cannot imagine anyone challenging the idea that the most important is the total return. However, although it is obvious to determine the past total return, it is extremely risky to rely on past performance only to establish a realistic income for the future (such behaviour has no financial foundation, it is relying on hope only for your financial security). Your assessment is what I would recommend to young people still collecting a salary from their active workplace contribution. Once retired, you need to compare your investment with the stability and reliability of periodic salary. I don’t think anyone in the workplace is comparing his salary increase with the growth of the S&P500.

I love the way you think. One basic question. If you knew you were going to die in 10 years and had a lump sum of cash, would you still put it in your 3 fund portfolio or keep it in a savings account in a bank?

My strategy is to have the Roth completely dividend based, I have a sp500 based 457, and then a 3rd growth portfolio. The security of dividend income is good as part of a holistic approach.

@739jep

2 жыл бұрын

And what if you’re mistaken in believing dividend income provides security?

@Roger-il8iw

2 жыл бұрын

@@739jep that question is what is called a logical fallacy. You can “what if” any strategy. Anything is possible. Is it likely? Absolutely not.

@739jep

2 жыл бұрын

@@Roger-il8iw might be but I don’t think I am - could I have made a logical fallacy if i didn’t make a claim or an argument? It was just a question - and asked in the comment section of a video that explains precisely why you might be wrong. The logical fallacy that you appear to be making is named ‘the free dividend fallacy’. The research paper titled ‘the dividend disconnect’ by Hartzman and Solomon goes into detail what the problems with your original post are. The reason why I asked the question is because it is something you should consider or else risk designing a portfolio based on flawed reasoning. To me it seems your position on dividends doesn’t seem to be supported either by financial theory or by the empirical data. The best pricing models we have exclude dividends as factors that explain returns simply because when analysed dividends are found to have a non significant impact on total returns - and of course the dividend irrelevance theory explains why we find this in the data. You say it’s not likely you’re wrong , but what evidence do you have to back up that claim?

@NicE-jq3wv

2 жыл бұрын

Yep…I consider the dividend companies in my Roth as my bonds

My dividends are roughly in the 4-5% range. I am far from retirement. I am heavy in growth stocks. Yield is important, but you want to start with value stocks that are low.

When a dividend investor looks at a source for dividends, index funds are the worst option and they don't balance them with bonds - its 100% in dividend producing stocks, ideally dividend aristocrats and kings - stocks with a history of consistent dividend payouts with annual increases. Typically you would be investing in boring stocks like utilities, banks, etc - industriies that will continue to produce income regardless of market conditions...

@HateTheIRS

2 жыл бұрын

You realize, There are, Utility sector Index funds, Real estate / Banking, index funds, that track those specific sectors? So index funds aren’t always bad. There is an. S&P 500, dividend ETF, which takes the top 82 dividend stocks in the S&P 500, and it’s an index, but has a dividend ratio of like 3.7%. You can probably find the ticker yourself.

most people buy individual stocks with dividends such as 5 % for telecoms like verizon and at&t or 11 % for qyld etc. Also you should aim for double the amount you think you will need at the least because of inflation. You need to have at least 20 stocks in case 1 or more of them goes bankrupt.

What do you think about the tax advantages of qualified dividends vs liquidating the capital gains for income?

IMO “live off dividends” means your base expenses are covered by dividends, pension etc. Growth in your portfolio is fun money. New car, nice clothes, fancy vacations, second home etc.

@catsrule7751

2 жыл бұрын

I like that idea - combining a stable Retirement situation with fun money. And, if someone want to delay their own retirement by 2 years after they can retire, then that person has 2 years of fun money to allocate in their Growth portfolio for retirement above and beyond covering their base expenses. If someone wants to delay it by 5 years; then they could have that much more fun money down the road, etc. How much time is delaying retirement worth for fun money?

@bradturner7678

2 жыл бұрын

@@catsrule7751 depends how much you hate your job, no point having more fun money when your time is spent being miserable.

If you start young enough your yield on cost on many low yielders is large. My yield on cost of appl is 4.89% despite the current yield being under 1%. What you dont want to do is to have to sell stocks or bonds during a downturn and lose much if not all of your gains. Yes I have seen great companies like Citibank, Bank of America, PFE, MSA cut their dividends.If you have enough diviersification and a lot of aristocrats-rare to see cuts averaging more then 30% of a portfolio. I think it is great to have large dividend portfolio and never want to sell a stock because I have to.

@rossmacintosh5652

2 жыл бұрын

Jay, many of the KZreadrs who promote dividend investing really focus on 'yield on cost'. Indeed it can feel great to see that number climb over time! Don't be blinded into not seeing that 'total return' really is the more important statistic. With a growth portfolio I might indeed find I need to occasionally sell some shares to generate some cash flow but I'm effectively just cashing out some profits and not selling my original investments. With a 41% 12-month return on my growth portfolio, if I needed to, I could easily cash out a few percent and not feel guilty.

@Sylvan_dB

2 жыл бұрын

@@rossmacintosh5652 How important is total return when it will be cut in half before next year? Or might take 15 years to get back to 0? That's historical reality. If you are depending on total return you must have a backup plan.

@rossmacintosh5652

2 жыл бұрын

@@Sylvan_dB Well if you invest in a nice dividend stock its value can also be cut in half by a market correction. If that happens then the company will likely cut or suspend the dividend. That too is reality. When the sh*t is flying dividend stocks catch their share. In the aftermath a growth stock can be seen as having potential while the stock that formerly paid a dividend is seen as a dying business. Sorry.

@Sylvan_dB

2 жыл бұрын

@@rossmacintosh5652 That is NOT reality. Cuts happen rarely even in 2008-9 and 2020 very few cuts happened and the increases exceeded the cuts. If you have a diversified portfolio there is nothing to worry about. Even when I researched back to the great depression until 2000 the dividends stood out as the safe approach. I've been doing this and monitoring closely since 2002, after doing extensive research into what actually happens. Your claim is from ignorance.

@rossmacintosh5652

2 жыл бұрын

@@Sylvan_dB Two low-cost Vanguard ETFs are VIG (US dividend appreciation) and VUG (US growth). Since VIG's inception in 4.21/2006, every dollar invested in the ETF with dividends reinvested would have grown to $4.34. That's a 10.12% annual return. In comparison VUG for the same time frame would have seen each dollar invested grow to $6.51. That's a 13.08% annual return. According to Vanguard the risk profile for both ETFs is the same. You would have 50% more money in your investment account now had you bought VUG without any more risk.

Thanks Rob. I like your channel. But I have a different interpretation of your first chart which shows dividends graphed over time. Dividends started out at $26k in 1994 and increased to $115k in 2020. That is far more than the rate of inflation which is why living off dividends is a great strategy. Of course it is smart to have an emergency fund in cash also.

@Hawks1980

5 ай бұрын

Agreed, I feel he’s deliberately misinterpreting the data to make his point in this video.

Would you consider addressing using dividend investments to supplement a retirement income? In my case, I have a pension, social security and require additional to balance out my income. Can dividend investments help with this?

@rob_berger

2 жыл бұрын

Here's my take on dividends in retirement: kzread.info/dash/bejne/mJx115hqg7fak7w.html

Living in dividend doesn’t have to be a hard fast rule. On years when you’d like to splurge, one can always sell off some shares. But I think you make a good point in that if one wants to live a higher life style day in and day out (e.g. buying and living and maintaining a luxury vacation home), one needs a regular stream of income, and applying the 4% (dividends + stocks sold) could maybe generate a more steady income stream…maybe. But I’m not entirely convinced given that cash dividends vary far less than price and can always bank away some of the yearly gains in cash dividends and use the banked money to cover years when cash dividends dip. My preference is to live on cash dividends only during retirement so that all my shares can continue to double in value every 7-8 years, and so that I continue to generate more cash dividends with the growth in share values. After some time after retirement, the portfolio value will have grown at such an exponential rate and to such a size that I can sell shares for cash without ever ever worrying about drawing down and burning through my entire portfolio to eventually leave me with zero shares to generate zero dividends.

@HateTheIRS

2 жыл бұрын

Exactly what I was thinking.

@chriswoodard8497

2 жыл бұрын

Why sell shares? Just take out a margin loan and let your dividends repay it? that u keep your shares so they can continue compounding, and u don't create a taxable event.

@InfiniteQuest86

2 жыл бұрын

@@chriswoodard8497 Highest IQ statement yet. People do it all the time with rental properties with cash out refinance, but no one thinks to do it with their equities.

@redtops5160

2 жыл бұрын

@@chriswoodard8497 And what kind of margin rate can you get today? 6-7% if you negotiate? Margin and retirement don't go together. And margin rates will vary as the Fed makes moves. Live off dividends and sell occasionally to support yourself if needed. Chris you are in retirement, living off the dividends. No more compounding.

@internationalplayboy8685

Жыл бұрын

@@redtops5160 not true, some brokers margin rates are very low. Much lower than the dividend rates received. You need to get out more.

Thank you for your time. Not a fan of the 4% rule. Not selling equities to fund retirement. Dividend income will work just fine here, in combination with a pension and social security.

@jakewhite6518

2 жыл бұрын

Agreed. I have ETFs that give me 8%. I pull what I need and allow the difference to help increase and buy more shares

@WookieSenshi

2 жыл бұрын

100% agree.

Rob. I sometimes confuse myself on the fundamen6 reasons we do dividends. I tend to think total returns. Suppose I buy SPY with 20 delta LEAP short call as my covered call. Then wait and do nothing until expiration. And cash out the total increase as my payday using its dividend plus the theta gained. It would thus be long term capital gains so tax is not an issue. Would that approach be not only simpler but safer and with higher profit?

Rob, If you EVER read this, could you create a tutorial video on how to use this Portfolio visualizer? For you, it would be a new video topic (that you need), for us - actually knowing how to use it. I know you introduced that software in one of your vids, but didn't really explain yet how to use it, I believe...