ScaredtoQuit
Recycles dryer sheets
- Joined
- Jan 3, 2007
- Messages
- 211
What do you guys think about a "Ben Stein" style income investor portfolio in lieu of a well diversified "Merriman" style portfolio. My thinking is that if you have a large percentage of high dividend payers (like Citicorp) that pay close to 4% and couple that with some 6% bonds, you would easily achieve your income goals and maybe even be able to take out more than 4% per year. In his book, "Yes You Can Be an Income Investor", Stein identifies how you can narrow down your investments to companies that (1) have a record of paying high dividends and (2) have a record of routinely increasing the payout.
If all of your equities pay high dividends and consistently increase their payout rate, your retirement income would presumably keep up with inflation perhaps even beat it. With a portfolio like this, market dips would probably be much less scary because companies like this are much less likely to lower their dividends and so long as you keep receiving the dividends you've got enough income to make it.
What's wrong with this scenario? What am I missing? Why don't more people pursue a plan like this?
If all of your equities pay high dividends and consistently increase their payout rate, your retirement income would presumably keep up with inflation perhaps even beat it. With a portfolio like this, market dips would probably be much less scary because companies like this are much less likely to lower their dividends and so long as you keep receiving the dividends you've got enough income to make it.
What's wrong with this scenario? What am I missing? Why don't more people pursue a plan like this?