OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
As many as they want to. I don't recall that the OP asked us for advice on that.Lol. How many investing books does a younger person need to read? ...
As many as they want to. I don't recall that the OP asked us for advice on that.Lol. How many investing books does a younger person need to read? ...
bought this book awhile ago and haven't gotten around to it...pretty thick book... value investing seems dead though...
Nope. Not even that complicated. The problem with selecting for dividends is that you are rejecting the majority of the market, including companies that will generate better returns than the dividend payers. They might be growth companies, small companies, value companies, ... There's no way to know. So the winning total return strategy is to buy the market. Don't "aim" for anything.
OP - 6 stocks is far too high a concentration, instead think SCHD ETF
It pays 3.39% dividend, it is made of 98 securities, so if 1 company stops paying a dividend, you won't even notice.
Problem with preferred shares is: they can stop paying dividends, they can disappear just like regular stocks when a company goes bankrupt, they basically never appreciate in price (which is where most stockholders make their money).
Well, I will half-agree. A lot of the discussion here about things like a "Dividend Aristocrats" fund is in fact about portfolio construction -- selecting dividend payers according to some criteria and excluding non-payers. So that is what I was addressing and why I specifically said "selecting for dividends."This is not correct. Investing for dividends is a withdrawal strategy. Not a portfolio construction strategy.
For example, in my portfolio I own VT which I believe you also own. It is 30% of my portfolio. I plan to only withdraw the dividends which is a withdrawal strategy, not a portfolio strategy.
It seems like you are splitting hairs, as if the goal is to generate dividends (withdrawal strategy), you have to choose the right equities or funds that will regularly pay dividends, at the cost of growth. Be default, you have to construct your portfolio to have dividend-paying assets. That said, I'm a total market investor. One problem with dividends in taxable accounts, is that you can't stop them, and there are tax consequences. If you're getting more dividends than you need, you're also paying more taxes that you'd otherwise have to pay. They work better (IMHO) in tax-deferred accounts, where everything is taxed upon withdrawal, and not until then.This is not correct. Investing for dividends is a withdrawal strategy. Not a portfolio construction strategy.
For example, in my portfolio I own VT which I believe you also own. It is 30% of my portfolio. I plan to only withdraw the dividends which is a withdrawal strategy, not a portfolio strategy.
DW and I live off the dividends. Many years ago we focused on that strategy and it works for us. The amount of dividends generated in our total investment portfolio is greater than what we live on year to year. We live on 3% and dividends generate about 3.5%. We have way more than a handful of stocks and some are ETF's. Do we sometimes have capital gains and losses? Yes. Our thought is... money is money regardless of how it arrives in our hands - fungible as they say. From the 20,000 ft. perspective we live off the dividends.
....Is it a bad idea to want to live off the dividend income?...
.... I don’t like ETFs, as you don’t control the cap gains and can do without the fees. ...
Your ideas are important for newer dividend investors to understand. I think the time required to manage the portfolio initially is much more than some would guess. Once you "get there" (as you have) would you say it requires less time now to manage? I'm curious about that.I’ve been retired 14 years, living off dividends.
However, as many others have stated, 4-6 stocks is way to small.
We have 16-20. Not all are dividend payers, but most are.
I don’t like ETFs, as you don’t control the cap gains and can do without the fees.
The biggest thing is you need to research and follow the companies. Generally there are plenty of warning signs that a div cut is looming.
And to agree with many others, don’t chase dividend yields!
MacGyver never tried to outperform anyone else. He developed tremendous troubleshooting ability and solutions to seemingly impossible problems. He probably used a rock to hammer a nail when nothing better was within reach. He did not get to expert status in a day, but built up applied knowledge as he tried everything under the sun.
MacGyver never tried to outperform anyone else. He developed tremendous troubleshooting ability and solutions to seemingly impossible problems. He probably used a rock to hammer a nail when nothing better was within reach. He did not get to expert status in a day, but built up applied knowledge as he tried everything under the sun.
I'm ok with dividends. They currently pay
Mortgage
Insurance
Property taxes
Water
Electricity
Auto loan
Auto insurance
Groceries
Cable/Internet
...
... There's more to life than worrying about were every last dollar is coming from and how to squeeze it out. Otherwise why FIRE?
I know many people who are completely uninterested in screwing with this. Often they are happy to pay an FA and make no effort to track the results. As long as they feel they are "up" in a year more often than they are "down" they don't care. Sheep to the slaughter IOW but they don't know and they don't care.... It's not about worrying or squeezing at all. Using broad based ETFs provides diversity, and very likely more available money for no more (and maybe less) effort. There's no compromise, as I said, I've yet to see anyone provide evidence that a dividend sector performs better than a Total Market ETF. The div sector does not provide any relief from worry, diversification does that. There's no "there" there, in the div sector.-ERD50
...
Really, @ERD50, you are wasting your time pounding on this. Even though you are right. The word "jeremiad" comes to mind.
A jeremiad is a long literary work, usually in prose, but sometimes in verse, in which the author bitterly laments the state of society and its morals in a serious tone of sustained invective, and always contains a prophecy of society's imminent downfall.
The div sector does not provide any relief from worry