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Old 05-21-2012, 03:53 PM   #1
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OK, I am asking this because I know nothing about stock investing. Had to sell my mother's AT&T stock to pay for nursing home care. It had been paying $1000.00 every 3 months in dividends. Sold it for $76K. Seems like it goes up and down in value only a small amount month to month, year to year. Why would a person not just invest in AT&T if they had $50K, $100K or whatever and get dividends like she has been getting as posted above for years. $76k in value earning $4K a year.
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Old 05-21-2012, 03:54 PM   #2
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Lots of folks do exactly that.
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Old 05-21-2012, 04:00 PM   #3
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You might say that it's a bit of a cult involving DRIPs, Norwegian widows, and guys leaning out of alleys to call "Pssst!"...
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Old 05-21-2012, 04:32 PM   #4
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Just as long as they don't put all their eggs in one basket - or all their money in one stock. Diversify...
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Old 05-21-2012, 04:36 PM   #5
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Quote:
Originally Posted by Nords View Post
Dividend Growth Investor

You might say that it's a bit of a cult involving DRIPs, Norwegian widows, and guys leaning out of alleys to call "Pssst!"...
Either you are speaking in tongues or I just don't know enough to follow what you are saying. Guess I am just an old dumb redneck but have been retired for 3 years. No money problems. Feel so fortunate that when I needed a job there were jobs in droves. If you didn't like your job, you could just get another one. A person could job hunt for a week and get several offers. Now, a person with an advanced degree costing mega thousands of dollars cannot find a job. Or has to take anything to get by. When you start down that road you may never get the salary that should come with the money spent for the education.
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Old 05-21-2012, 08:47 PM   #6
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Either you are speaking in tongues or I just don't know enough to follow what you are saying. Guess I am just an old dumb redneck but have been retired for 3 years. No money problems. Feel so fortunate that when I needed a job there were jobs in droves. If you didn't like your job, you could just get another one. A person could job hunt for a week and get several offers. Now, a person with an advanced degree costing mega thousands of dollars cannot find a job. Or has to take anything to get by. When you start down that road you may never get the salary that should come with the money spent for the education.
First, yes you are lucky! I also feel bad for today's graduates.

I will be repeating what others said in my response to your original question. Many people do exactly that--especially people with no pension. However, you still need to be diversified. People who lived off of GE or Pfizer dividends felt significant pain when the dividends were cut. And in order to invest in stocks, you need to know when to get out if a company is starting to crumble. Kodak was a solid payer for years but now look at them.

Many solid companies have fallen on hard times due to technological advancements or other problems. Unlike investing in mutual funds where a manager is reviewing the portfolio, investing in stocks requires periodical review of the portfolio, either by yourself or an advisor.

So dividend investing takes some knowledge and it's different than investing in funds. Neither is right or wrong, but they are different.

Just my opinion.
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Old 05-22-2012, 02:33 AM   #7
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Either you are speaking in tongues or I just don't know enough to follow what you are saying. Guess I am just an old dumb redneck but have been retired for 3 years. No money problems. Feel so fortunate that when I needed a job there were jobs in droves. If you didn't like your job, you could just get another one. A person could job hunt for a week and get several offers. Now, a person with an advanced degree costing mega thousands of dollars cannot find a job. Or has to take anything to get by. When you start down that road you may never get the salary that should come with the money spent for the education.
*Sigh*. I thought you'd been reading UncleMick's posts. Nobody appreciates the classics anymore.

It's not about you. No need for the redneck comments.

The Dividend Growth Investor blog will help you screen and analyze dividend-paying stocks that have a reliable record of raising their dividends and are expected to keep pace with inflation. AT&T, over the long term, has been one of those stocks. (It used to be known as a "Widows & orphans" stock, which reminded me of the Norwegian Widow.) There's about 300 to choose from, with varying degrees of longevity in their dividend-paying records. The challenge is selecting a diverse portfolio of 20-30 stocks so that you have a reliable chance of your dividends keeping up with inflation.

The DRIP acronym stands for "Dividend ReInvestment Program". Some companies will allow you to reinvest your dividends directly back into buying more shares. One of the drawbacks with a DRIP is that you may have to hold the actual certificates instead of leaving them in the custody of a broker. UncleMick used to have a file cabinet full of DRIP stock certificates but he's been slowly sending them to a brokerage over the years.

The Norwegian widow is a reference to UncleMick's legendary (apocryphal?) frugal widow who'd stand by the mailbox awaiting the mail carrier's delivery of her dividend checks.

When UncleMick stopped DRIPs and imitations of Norwegian widows, one of the assets he invested in was the Vanguard mutual fund Wellesley. Many people on this board have overcomplicated their asset allocation over the years in search of the perfect combination of stock/bond percentages. UncleMick usually responds with something along the lines of "Psssst-- Wellesley" to remind posters that Wellesley will take care of the rebalancing for you and reduce your investing hassle.

There are plenty of other golden-oldy and ER trivia threads on this forum:
Early Retirement FAQs - Early Retirement & Financial Independence Community
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Old 05-22-2012, 05:36 PM   #8
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Pretty good investment I guess. She swears she only invested 10K back in the 60's (all she had from an inheritance) Sold 2 months ago for 76K. Now the nursing home is sucking it away. She says "Its all yours, my house, my car, my stock and my cash, whatever is left" She always was a comic.
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Old 05-22-2012, 06:46 PM   #9
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I trust you sold the car and house first.
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