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04-07-2019, 08:13 PM
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#81
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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Taxes? Just input the stuff into the software and don't sweat it. Easy.
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04-07-2019, 08:28 PM
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#82
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2016
Location: Colorado
Posts: 8,971
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Quote:
Originally Posted by RobbieB
Taxes? Just input the stuff into the software and don't sweat it. Easy.
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+1 Importing transactions into TurboTax takes like...19 seconds.
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04-07-2019, 08:30 PM
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#83
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2007
Posts: 13,227
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Quote:
Originally Posted by RobbieB
Taxes? Just input the stuff into the software and don't sweat it. Easy.
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Yep. You don't even have to input, just import all the 1099 info, and it'll grab any trades along with dividends.
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04-07-2019, 08:34 PM
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#84
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2009
Posts: 6,695
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I do my own taxes. Just for kicks, I tried Turbo Tax 2 years ago as a check on my work and it gave me garbage, total sci-fi garbage. I'll keep doing my own taxes, and those of my best (snake-bit) friend and my ladyfriend. From my admittedly warped perspective, I have no idea how it actually works correctly for anyone!
As for tail-wag-tax-form-dog, I don't let that dissuade me from making redemptions, even the first one late in the year, to trigger Form 8949 and Schedule D.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.
"I want my money working for me instead of me working for my money!"
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04-08-2019, 09:40 AM
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#86
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Thinks s/he gets paid by the post
Join Date: Jan 2018
Location: Elyria, OH
Posts: 1,937
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Quote:
Originally Posted by scrabbler1
I do my own taxes. Just for kicks, I tried Turbo Tax 2 years ago as a check on my work and it gave me garbage, total sci-fi garbage. I'll keep doing my own taxes, and those of my best (snake-bit) friend and my ladyfriend. From my admittedly warped perspective, I have no idea how it actually works correctly for anyone!
As for tail-wag-tax-form-dog, I don't let that dissuade me from making redemptions, even the first one late in the year, to trigger Form 8949 and Schedule D.
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Ditto for having a bad experience with Turbo Tax. They messed up handling my husband's employer contribution to his HSA 2 years in a row. It was a software issue at the time, according to the forums. It seems that every year you can find a discussion topic somewhere on how Turbo Tax isn't handling something properly. I'm a free fillable forms fan myself.
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04-08-2019, 07:46 PM
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#87
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Dryer sheet wannabe
Join Date: Mar 2019
Location: Windermere
Posts: 15
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In my former country (where my income comes from), you can easily build a consistent dividend portfolio (stocks, reits and tresury bonds) which will give you 5-6% of dividend yield, when you go to the conservative side. If you wanna get more DY and less growth, increase reits, electrical and bank stocks. Then, you might be at a 7-8% DY. In both cases, they would grow faster than inflation (specially bank stocks).
By the other hand, stock prices fluctuates a lot. In no way I would be safe if I dip into principal.
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04-09-2019, 02:43 AM
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#88
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,720
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Dividend investors is a raging topic on Bogleheads - "The "dividend preference anomaly".
Anyways, have a nice day.
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04-09-2019, 11:06 AM
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#89
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,891
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For the "dividend investors" who claim they don't want to touch principal, you should become aware that dividends actually do come out of principal. You are, in effect "touching principal" every time you take a dividend. It's an illusion to think they don't.
The difference being, dividends force principal on you, rather than you deciding when to take principal.
As I showed in another thread (and should be common knowledge), until the company issues the dividend, that dividend value is reflected in the stock price. It is part of principal. This can be most easily seen at the ex-dividend date when there is a large distribution - year end of some mutual funds demonstrate this, but an individual stock does the same. Just a little harder to see with volatility and the usually smaller quarterly dividends.
Ignoring volatility and other factors, a $100 stock that has accumulated $4 in divs, will have risen to $104 before the dividend date. It will then pay out the $4 div, and drop back to $100 on that day. The $4 came out of principal. There really is no other place for it to exist, and the market won't ignore it (even if "dividend investors" choose to).
Quote:
Originally Posted by target2019
Dividend investors is a raging topic on Bogleheads - "The "dividend preference anomaly".
Anyways, have a nice day.
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Thanks, will read it later.
-ERD50
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04-09-2019, 11:42 AM
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#90
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,263
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Quote:
Originally Posted by ERD50
For the "dividend investors" who claim they don't want to touch principal, you should become aware that dividends actually do come out of principal. You are, in effect "touching principal" every time you take a dividend. It's an illusion to think they don't.
The difference being, dividends force principal on you, rather than you deciding when to take principal.
-ERD50
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It’s this kind of thinking that keeps you on my list of dangerous radicals who infest this site. :-)
__________________
Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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04-09-2019, 11:50 AM
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#91
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2013
Location: Limerick
Posts: 5,655
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Quote:
Originally Posted by ERD50
For the "dividend investors" who claim they don't want to touch principal, you should become aware that dividends actually do come out of principal. You are, in effect "touching principal" every time you take a dividend. It's an illusion to think they don't.
The difference being, dividends force principal on you, rather than you deciding when to take principal.
As I showed in another thread (and should be common knowledge), until the company issues the dividend, that dividend value is reflected in the stock price. It is part of principal. This can be most easily seen at the ex-dividend date when there is a large distribution - year end of some mutual funds demonstrate this, but an individual stock does the same. Just a little harder to see with volatility and the usually smaller quarterly dividends.
Ignoring volatility and other factors, a $100 stock that has accumulated $4 in divs, will have risen to $104 before the dividend date. It will then pay out the $4 div, and drop back to $100 on that day. The $4 came out of principal. There really is no other place for it to exist, and the market won't ignore it (even if "dividend investors" choose to).
Thanks, will read it later.
-ERD50
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Ultimately, a stock’s value is what another buyer is willing to pay for it, which we all know changes thousands of times each day. If you ask for that $104 stock at $100, because the dividend was just paid, but there are no sellers at that price for any reason, you won’t be buying that stock. You’re just playing a bookkeeping game.
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04-09-2019, 11:54 AM
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#92
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2011
Posts: 8,418
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Quote:
Originally Posted by ERD50
For the "dividend investors" who claim they don't want to touch principal, you should become aware that dividends actually do come out of principal. You are, in effect "touching principal" every time you take a dividend. It's an illusion to think they don't.
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I think most dividend investors understand that but like "when to take SS or paying off the mortgage" and such it is not only a psychological issue but also one of personal taste more than raw math.
My personal reasons are: 1) the dividends are taken out and set aside regularly and automatically. I don't have to think about selling shares at the wrong time (I'd hate to have had to replenish by selling shares in Dec 2008) and
2) back to my old acreage analogy, I'm only selling the corn that I grew, not the land it grew on, which psychologically just feels right for me to have the same amount of shares I started with. Historically those continue to grow in value despite having withdrawn the dividends and most often revert to their pre-dividend value in short order.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
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04-09-2019, 11:59 AM
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#93
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,891
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Quote:
Originally Posted by Dash man
Ultimately, a stock’s value is what another buyer is willing to pay for it, which we all know changes thousands of times each day. If you ask for that $104 stock at $100, because the dividend was just paid, but there are no sellers at that price for any reason, you won’t be buying that stock. You’re just playing a bookkeeping game.
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That just isn't a factor in the real world, with a liquid stock of the type the "dividend investors" are looking at.
For thinly traded stocks, sure - but that is true if it pays a dividend or not, so it isn't a factor in dive-payers versus non/low-div payers.
Like the seasons, in late fall/early winter, this forum can expect an "OMG" post from someone who just saw their well-known, relatively stable fund drop 10% overnight. And it almost always is a large year-end distribution.
Calling it a book-keeping game doesn't make it any less real. After all, as far as I can tell, almost all my net worth is represented by some bookkeeping entries on a computer somewhere.
-ERD50
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04-09-2019, 12:06 PM
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#94
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,891
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Quote:
Originally Posted by marko
I think most dividend investors understand that but like "when to take SS or paying off the mortgage" and such it is not only a psychological issue but also one of personal taste more than raw math.
My personal reasons are: 1) the dividends are taken out and set aside regularly and automatically. I don't have to think about selling shares at the wrong time (I'd hate to have had to replenish by selling shares in Dec 2008) and
2) back to my old acreage analogy, I'm only selling the corn that I grew, not the land it grew on, which psychologically just feels right for me to have the same amount of shares I started with. Historically those continue to grow in value despite having withdrawn the dividends and most often revert to their pre-dividend value in short order.
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And of course, there is nothing "wrong" with that, and nothing "wrong" with focusing on div-payers (though I do feel it could be leading to lower diversification, which has a chance of being a problem?).
I just feel people should understand what they are getting into - some seem to assign some sort of 'magic' to dividends, but it's just another way that they are tapping principal. I prefer the flexibility of tapping principal where/when I define, and wish that all my investments retained all dividends, like my BRK.
-ERD50
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04-09-2019, 01:26 PM
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#95
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,370
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Quote:
Originally Posted by Dash man
Ultimately, a stock’s value is what another buyer is willing to pay for it, which we all know changes thousands of times each day. If you ask for that $104 stock at $100, because the dividend was just paid, but there are no sellers at that price for any reason, you won’t be buying that stock. You’re just playing a bookkeeping game.
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But if you're a buyer and willing to pay $104 for the stock on Tuesday, and the company pays $4 dividend after the close on Tuesday, how much would you be willing to pay for that stock Wednesday morning? $104? or something other than $104? Why?
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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04-09-2019, 02:15 PM
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#96
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2013
Posts: 11,078
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Quote:
Originally Posted by pb4uski
But if you're a buyer and willing to pay $104 for the stock on Tuesday, and the company pays $4 dividend after the close on Tuesday, how much would you be willing to pay for that stock Wednesday morning? $104? or something other than $104? Why?
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I can tell you what the open price is...
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04-09-2019, 02:41 PM
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#97
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Dryer sheet wannabe
Join Date: Mar 2019
Location: Windermere
Posts: 15
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Dividends and stock price can fluctuate less dependently. Dividends are related to company profit. Stock prices are defined by market using a lot of variables. So, the “dividends come from principal” argument is essentially insufficient.
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04-09-2019, 02:54 PM
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#98
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,351
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Quote:
Originally Posted by retiredgeek
Dividends and stock price can fluctuate less dependently. Dividends are related to company profit. Stock prices are defined by market using a lot of variables. So, the “dividends come from principal” argument is essentially insufficient.
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Well, I think it's pretty clear that if you take some water out of a glass, there is less water left in the glass.
In the end, the value of a stock is its future cash flows plus any future price appreciation. If a dividend is paid, future cash flows are reduced.
It is hard to see how reducing the company's cash by the value of that dividend would increase future appreciation, even considering behavioral factors. So the value of what's left after the dividend is paid has to be less.
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04-09-2019, 02:59 PM
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#99
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2016
Location: Colorado
Posts: 8,971
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Quote:
Originally Posted by retiredgeek
Dividends and stock price can fluctuate less dependently. Dividends are related to company profit. Stock prices are defined by market using a lot of variables. So, the “dividends come from principal” argument is essentially insufficient.
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But its true. A dividend is lopped off the end of the stock price. That is why there is an ex dividend date and the value falls. You gain the value back on the pay date and you can choose how to receive it. As cash or reinvested.
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04-09-2019, 03:03 PM
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#100
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2013
Location: Limerick
Posts: 5,655
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Quote:
Originally Posted by ERD50
That just isn't a factor in the real world, with a liquid stock of the type the "dividend investors" are looking at.
For thinly traded stocks, sure - but that is true if it pays a dividend or not, so it isn't a factor in dive-payers versus non/low-div payers.
Like the seasons, in late fall/early winter, this forum can expect an "OMG" post from someone who just saw their well-known, relatively stable fund drop 10% overnight. And it almost always is a large year-end distribution.
Calling it a book-keeping game doesn't make it any less real. After all, as far as I can tell, almost all my net worth is represented by some bookkeeping entries on a computer somewhere.
-ERD50
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Reads like you’re talking funds and I’m talking stocks. They react differently.
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