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Re: Dividend ideas?
Old 05-06-2005, 04:45 PM   #41
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Re: Dividend ideas?

Hey! This one is for your mother!

I think its time to build a wooden badger...
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Re: Dividend ideas?
Old 05-06-2005, 04:45 PM   #42
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Re: Dividend ideas?

No wildcat, he is French, how do you think he got this aughtrageous accent-a!

Monty Python's Holy Grail, what a great movie. Now if I could only get my hands on a holy hand grenade!
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Re: Dividend ideas?
Old 05-06-2005, 04:47 PM   #43
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Re: Dividend ideas?

Wow... leave to go work for abit and when you come back, the whole post has gone crazy

youbet said:
"
Are you building in annual increases in dividend income to account for inflation? If not, you'll soon stumble onto the falicy of "living off the interest/dividends and not touching the principal."
"

To answer the inflation problem, I plan to increase payment with less then the annual dividend increases.

So, the dividend payout INCREASE yearly is 10% (historically), and you take only say 3% annually extra, then your ahead, right?

The capital is always fluctuating with market price, but i would never sell it.

Calgarygirl said
"
read Derek Foster's book? He's 36 and retired at 35
"

Thanks Calgarygirl... Yes I did read his book and thought his gutsy move at 18k / yr is just great!

We are blessed up in Canada to not have to deal with the health care issue that plagues <some> citizens from the south, yet we do deal with our own 'cold' issues. :-) This helps in getting-out abit sooner... eh?

Please accept my appology for poor forum edicate and not using reply captions... I'll spend some time soon to get those down, as it were..


greeny :-)



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Re: Dividend ideas?
Old 05-06-2005, 04:49 PM   #44
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Re: Dividend ideas?

If you have dividend paying stocks running in the 10% range, not selling wouldnt be your biggest problem...

I havent seen anything north of 7% that didnt have a pretty good chance of default.

10% of zero is zero.

While the accommodating monetary policy of late has made a lot of people want to chase yield and has made for a very low default rate, I wouldnt expect that to be the case once things tighten up a little bit more...
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Re: Dividend ideas?
Old 05-06-2005, 04:51 PM   #45
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Re: Dividend ideas?

sorry... that meant 10% increase in dividend payment NOT 10% dividend payment


made the change to the original post

greeny
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Re: Dividend ideas?
Old 05-06-2005, 06:25 PM   #46
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Re: Dividend ideas?

Green,

I don't know the exact details of the securities you are buying, so pls correct this analysis if it is wrong. A lot depends on the trend or expected return in the underlying security you own. I am going to assume that it goes up and down, but maintains its same price over time. This assumption must preface the following comments to your last post:

a dividend that grows at a 10% rate means, for example, a 3% yield growing to a 3.3% yield (if the principal stayed the same) . Taking 3% of that growth in yield would _not_ protect you for inflation. You need to take (imho) 3% of the total yield and set that aside for inflation-adjustment of your initial capital. Then you can spend what is left.

So if you have an 8% yield, sock away the first 3% of it, leaving you 5% to play with.

Maybe that is what you are doing, but I just wanted to be clear.

If your undrerlying security price stays stable, though, the real value of your capital is eroding at the rate of inflation without this sort of adjustment.

So putting the first 3% of annual return or yield aside into more of the asset or other assets is the only way to protect the real value of your asset base. Play with the numbers -- there is a big difference between 3% of the portfolio value set aside, and 3% of the annual dividend increase set aside.
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Re: Dividend ideas?
Old 05-07-2005, 07:56 AM   #47
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Re: Dividend ideas?

I love to get paid and I like having my downside risk truncated a bit by relatively safe dividends. Some of my favs in my portfolio for possible further investigation:
--CVX- Yields 3.4% and off it's 52 week high. EPS 6.20 & Div/Sh = 1.80. 8.5 PE.
--NLY- Mortgate REIT that yields 9.5%. Market discounting a possible divvy cut, but these people know how to manage the curve.
--PCU-Southern Peru Copper. Not for faint of heart...levered to copper prices. Just paid a quarterly of 2.38/sh which annualized is 18%. Low debt...more of a pure value play with capital appreciation potential. Very under followed in U.S. A steal on a pullback to upper 40's.
--CARS-Automotive REIT with increasing revs, great mgmt, and good business model with modest competition. Yields 5.2%.
--SO-Southeast super regional utility with 2-4% organic growth due to region demographics, & conservative mgmt. Yields 4.5%.
Happy hunting....
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Re: Dividend ideas?
Old 05-07-2005, 08:13 AM   #48
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Re: Dividend ideas?

Not bad Mark...a lot of our returns going forward could come from good old dividends. Quick question on the idea of REIT dividends, how are they treated in tax deferred accounts? I assume they are protected but I could be wrong.
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Re: Dividend ideas?
Old 05-07-2005, 08:14 AM   #49
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Re: Dividend ideas?

Thanks for all your comments...
Here are the numbers... hope it makes sense...

Year 1
bought $100000 phone-company stock for 25$ per share
I now own 4000 shares
The bank pays $1 for each share this year as a dividend
I will now get $4000 in dividends this year
That equates to 4% annual yield or 4% return on investment.

Year2
I still own 4000 shares
The phone-company pays $1.10 for each share this year as a dividend (10% div increase)
I will now get $4400 in dividends this year
That equates to 4.4% annual yield or 4.4% return on investment.
3% inflation this year means I need 4120 [4000 + 3%]
I received $4400. An increase of $380.

Year3
I still own 4000 shares
The phone-company pays $1.21 for each share this year as a dividend (10% div increase)
I will now get $4840 in dividends this year
That equates to 4.84% annual yield or 4.84% return on investment.
3% inflation this year means I need 4243.6 [4120 + 3%]
I received $4840. An increase of $596.40

... and so on

I care only for the dividends the co pays. The actual share price is of no value.
Does this make sense?
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Re: Dividend ideas?
Old 05-07-2005, 09:12 AM   #50
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Re: Dividend ideas?

Quote:
Originally Posted by greenhm
Thanks for all your comments...
Here are the numbers... hope it makes sense...

Year 1
bought $100000 phone-company stock for 25$ per share
I now own 4000 shares
The bank pays $1 for each share this year as a dividend
I will now get $4000 in dividends this year
That equates to 4% annual yield or 4% return on investment.

Year2
I still own 4000 shares
The phone-company pays $1.10 for each share this year as a dividend (10% div increase)
I will now get $4400 in dividends this year
That equates to 4.4% annual yield or 4.4% return on investment.
3% inflation this year means I need 4120 [4000 + 3%]
I received $4400. An increase of $380.

Year3
I still own 4000 shares
The phone-company pays $1.21 for each share this year as a dividend (10% div increase)
I will now get $4840 in dividends this year
That equates to 4.84% annual yield or 4.84% return on investment.
3% inflation this year means I need 4243.6 [4120 + 3%]
I received $4840. An increase of $596.40

... and so on

I care only for the dividends the co pays. The actual share price is of no value.
Does this make sense?
Makes sense to me.

JG
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Re: Dividend ideas?
Old 05-07-2005, 12:27 PM   #51
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Re: Dividend ideas?

Quote:
Originally Posted by wildcat
...a lot of our returns going forward could come from good old dividends.
A lot of our historical returns came from dividends...not real recently, but you go back prior to a few decades and dividends were a large piece of it...
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Re: Dividend ideas?
Old 05-07-2005, 03:34 PM   #52
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Re: Dividend ideas?

Hi Wildcat and CalGal,

Here are the hi div equities that own or follow:

MARPS
TMA
SPH
CRT
FR

No recommendations here. These can be risky although I will say MARPS has been paying me super divvies on and off for years as I've moved in and out .


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Re: Dividend ideas?
Old 05-07-2005, 09:21 PM   #53
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Re: Dividend ideas?

Vanguard Wellesley has been discussed quite a bit in this tread.* I have a question about it. I am considering moving some money there that is currently in V money market.* This is IRA money I would start to draw on in 3 years.* (Recently retired but currently using after-tax money for living expenses).*

I was under the impression that one reason Wellesley did well relative to stock indexes during the 2000-2002 bear market was that bond NAV's increased because interest rates were on the decline for much of that time period.* If this is true, would the opposite be true today while rates increase?* Is it advisable to avoid investing in Wellesley until the fed gets done raising interest rates, intermediate to long-term bond yields increase, and bond valuations have dropped down some?*
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Re: Dividend ideas?
Old 05-08-2005, 04:39 AM   #54
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Re: Dividend ideas?

Quote:
Originally Posted by wildcat
.* Quick question on the idea of REIT dividends, how are they treated in tax deferred accounts?* I assume they are protected but I could be wrong.
Wildcat
The dividends received in a tax deferred account are fully tax deferred and therefore taxed only on withdrawal. It is tax advantaged to keep reit holdings in a tax deferred account.

Return questions-- On Canadian royalty trusts is there a Canadian government withholding on US Citizen's accounts? How would that be handled in a US tax deferred account such as an IRA? Anyone have to deal with this situation?

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Re: Dividend ideas?
Old 05-08-2005, 08:08 AM   #55
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Re: Dividend ideas?

Quote:
The dividends received in a tax deferred account are fully tax deferred and therefore taxed only on withdrawal. It is tax advantaged to keep reit holdings in a tax deferred account.
Thanks uncledrz
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