Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 07-05-2020, 07:07 AM   #81
Thinks s/he gets paid by the post
ER Eddie's Avatar
 
Join Date: Mar 2013
Posts: 1,690
Quote:
Originally Posted by ERD50 View Post
Sorry, I missed this 3 month old reply.

But this is the myth that keeps getting repeated, which does not make it any truer. Are you 100% equities? That's not typical. The typical retiree is more like 60/40.

At 60/40, you will very, very, very likely never sell stocks during a bear market. A conservative retiree is likely at < 3.5% WR, and a 60/40 AA ought to kick out at least 2.5% in divs, So that 40% fixed will be available to sell/rebalance, and will provide many, many, many years of 1% withdrawals ( the delta of 3.5% withdraw and the 2.5% in divs).

So try again.

-ERD50
Ok, I'll "try again." You're a bit condescending, you know? You already spent a fair amount of ink earlier in the thread lecturing about what turned out to be a misunderstanding on your part, which I patiently dealt with. Now you're doing it again. I'll take responsibility for this misunderstanding, but I'd ask that you talk to me with respect, and drop the condescending, know-it-all attitude.

Here's my part of the responsibility. I said I didn't have to "sell stocks." However, I was using "stocks" as a shorthand term for my whole portfolio. That's how I think of my portfolio -- it's a bunch of stocks. I'm a lay investor, a KIS type guy, so I use terms loosely sometimes.

To say it more precisely and clearly, by living off dividends, I don't have to sell any part of my portfolio -- equities or securities, stocks or bonds. I like it that way.

My dividend yields run about 2%. My expenses run about 1.75%. So I'm able to avoid selling anything during a recession. If my expenses were in the 4% range, I would have to sell chunks of my portfolio in a recession, to make up the other half. I would start with the bonds, of course. It would be silly to sell equities first.

Fortunately, though, dividends cover my spending nicely, and so I don't have to sell anything. I like that. I don't feel like my hand is forced by economic conditions.

Ok, hopefully that is clear now.
ER Eddie is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-05-2020, 07:14 AM   #82
Thinks s/he gets paid by the post
 
Join Date: Jul 2013
Posts: 1,549
Quote:
Originally Posted by ER Eddie View Post
Ok, I'll "try again." I said I didn't have to "sell stocks," but I should've been more precise in my language. I tend to use "stocks" as a shorthand term for my whole portfolio. But to say it more precisely, I meant that by living off dividends, I don't have to sell any part of my portfolio, equities or securities, stocks or bonds.

My dividend yields run about 2%. My expenses run about 1.75%. So I'm able to avoid selling anything during a recession. If my expenses were in the 4% range, I'd have to be selling chunks of my portfolio in a recession, to make up the other half. I would start with the bonds, of course. It would be silly to sell equities first.

Fortunately, though, dividends cover my spending nicely, and so I don't have to sell anything. I like that. I don't feel like my hand is forced by economic conditions.
Every time you receive a dividend, you are effectively selling, whether you realize it or not.
mrfeh is offline   Reply With Quote
Old 07-05-2020, 07:44 AM   #83
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 25,280
Quote:
Originally Posted by ER Eddie View Post
Ok, I'll "try again." You're a bit condescending, you know? ...
I went back and skimmed the thread, I don't see how anything I've said could/should be taken as "condescending", it sure wasn't meant that way.

I'm just trying to clear up some of what I see as common misconceptions about dividends sector portfolios.

Quote:
Originally Posted by ER Eddie View Post
...

Fortunately, though, dividends cover my spending nicely, and so I don't have to sell anything. I like that. I don't feel like my hand is forced by economic conditions.

Ok, hopefully that is clear now.
The words are clear, but to me, it's all based on a foundation that just doesn't make any sense, a distinction w/o a difference as it were. mrfeh just put it concisely, so I'll leave it at that:

Quote:
Originally Posted by mrfeh View Post
Every time you receive a dividend, you are effectively selling, whether you realize it or not.
-ERD50
ERD50 is online now   Reply With Quote
Old 07-05-2020, 07:58 AM   #84
Confused about dryer sheets
 
Join Date: Jul 2020
Location: spartanburg
Posts: 7
FWIW,
I have a few different utility stocks, not as flashy and the fast climbing rocket ships of the stock market but a pretty reliable income stream of just over 4%
Right now they are DRIP accounts but at 62 I will draw that quarterly dividend.
Gavin60 is offline   Reply With Quote
Old 07-05-2020, 11:13 AM   #85
Thinks s/he gets paid by the post
ER Eddie's Avatar
 
Join Date: Mar 2013
Posts: 1,690
Quote:
Originally Posted by ERD50 View Post
I went back and skimmed the thread, I don't see how anything I've said could/should be taken as "condescending", it sure wasn't meant that way.
Try again.

Quote:
I'm just trying to clear up some of what I see as common misconceptions about dividends sector portfolios.
I don't have a dividend sector portfolio.

Quote:
The words are clear, but to me, it's all based on a foundation that just doesn't make any sense, a distinction w/o a difference as it were.
We covered that earlier in the thread. I understand what you're saying -- basically that dividends aren't magic money that appears from nowhere; it comes out of a company's overall budget and therefore its overall value. I get that. I never thought dividends were some kind of magic money growing on trees.

I don't agree with your statement that I am selling shares whether I think I'm selling them or not. There's a difference between selling shares and refraining from buying more shares. I don't want to beat a dead horse, though, and it was pretty well handled earlier in the thread, so I don't want to repeat.

Let's just say we have different perspectives and leave it at that.
ER Eddie is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
so my A type mind has me out of the house during the day, set time out during week retiringat50 Life after FIRE 37 03-25-2008 08:55 AM
took some nice fall pics mathjak107 Other topics 12 11-21-2007 12:36 PM
How much is average saving during retirement? whitestick FIRE and Money 29 10-16-2007 07:44 AM
Terminator IV: Fall of the Machine greg Other topics 4 08-12-2005 04:38 PM
Dollar rises, profits fall...? Caroline FIRE and Money 2 06-14-2005 04:57 PM

» Quick Links

 
All times are GMT -6. The time now is 03:48 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.