Your Retirement Nest Egg

[perfor8]

Acres has worked well for me, so far.

That, sir, would fall under the aforementioned "/hard assets". I like acres, too.

 

[ZX9RCAM]

One nice thing about reliable dividend stocks (e.g., have never cut the dividend in the past 20 years or more). The dividend doesn't drop when the market (stock prices) drops.

This.

Forty dollar swing in stock prices and dividends are consistent.

 

[Havok1]

Dividends aren't "deducted" from the share price. That's not even his argument in the video. His statement is an assumption (stock not rising in value with dividend of one dollar is equal to a stock rising in price one dollar) - assuming the stocks started at 100 dollars, so the percent changes are equal. A ten dollar stock rising one dollar is not equivalent to a one hundred dollar stock rising one dollar, but I digress. To state another way, he isn't saying dividends are deducted from the stock price. He's saying that, to compare apples to apples, we'll assume for this argument and comparison that dividends are deducted from the stock price.

At 1:50 in the video:
“Before frictions like trading costs and taxes, investors should be indifferent between $1 in the form of a dividend, which causes the stock price to fall by $1, and $1 received by selling some shares”.

Nobody has said that a $10 stock rising by $1 is the same as a $100 stock rising by $1 so I’m not sure what you’re trying to argue.

And ok. Let’s pretend that he is not actually suggesting the fund price falls by the amount of the dividend. The fund managers are telling you that they are.

One nice thing about reliable dividend stocks (e.g., have never cut the dividend in the past 20 years or more). The dividend doesn't drop when the market (stock prices) drops.

That hasn’t played out in real life, as we can see in the graph I showed of actual fund performance. The dividends keep getting paid out, but it’s no different than selling the stock. in the case of SPYD, the max drawdown was worse than SPY. And once again, that’s after factoring in the dividends.

 

[msharley]

That one stockbroking concern...they used to run an ad...

"We get our money...the old fashioned way. We STEAL it!"....

 

[Havok1]

here is another fun graph of actual stock market performance. Starting December 2006 VTI(portfolio 1) vs VYM(portfolio 2). Starting balance of $1m with dividends reinvested, 4% SWR. the constant dividend is not the savior that many retail investors believe. Higher max drawdown and lower returns.

More profits from the S&P go to share buybacks than dividends.

 

[perfor8]

At 1:50 in the video:
“Before frictions like trading costs and taxes, investors should be indifferent between $1 in the form of a dividend, which causes the stock price to fall by $1, and $1 received by selling some shares”.

Exactly. But he's not saying $1 dividend causes the stock price to fall by $1. He's saying there's no difference in that imaginary case.

Nobody has said that a $10 stock rising by $1 is the same as a $100 stock rising by $1 so I’m not sure what you’re trying to argue.

It was a digression from the argument, which is why I said, "I digress". He's using $1, but I wanted to point out that $1 only works assuming both stocks are the same price.

 

[oldag]

At 1:50 in the video:
“Before frictions like trading costs and taxes, investors should be indifferent between $1 in the form of a dividend, which causes the stock price to fall by $1, and $1 received by selling some shares”.

Nobody has said that a $10 stock rising by $1 is the same as a $100 stock rising by $1 so I’m not sure what you’re trying to argue.

And ok. Let’s pretend that he is not actually suggesting the fund price falls by the amount of the dividend. The fund managers are telling you that they are.

That hasn’t played out in real life, as we can see in the graph I showed of actual fund performance. The dividends keep getting paid out, but it’s no different than selling the stock. in the case of SPYD, the max drawdown was worse than SPY. And once again, that’s after factoring in the dividends.

It has played out very well in my portfolio. And that is hard cold fact.

And the stock price does not automatically drop by the dividend amount, as others have noted.

It is very different than selling the stock. You should be capable of grasping that.

The dividends remain unchanged and I do not have to sell shares. So I am indifferent to short and mid term market slumps. If I were selling shares, I would be very sensitive to slumps.

Get out of the theoretical and into the real world.

 

[Double Naught Spy]

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The real money in owning rental properties is from appreciation, not rental fees.

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In my case, the real value in owning rental property has been in being able to retire 15 years ago at age 44 and my wife retiring with me at the same time. Priceless.

 

[Havok1]

Exactly. But he's not saying $1 dividend causes the stock price to fall by $1. He's saying there's no difference in that imaginary case.

It was a digression from the argument, which is why I said, "I digress". He's using $1, but I wanted to point out that $1 only works assuming both stocks are the same price.

Whether it’s $1 or not doesn’t matter. The point is that an investor is not gaining anything from the dividend. They had more of a role in the past but have mostly become obsolete.

It has played out very well in my portfolio. And that is hard cold fact.
And the stock price does not automatically drop by the dividend amount, as others have noted.

It is very different than selling the stock. You should be capable of grasping that.

The dividends remain unchanged and I do not have to sell shares. So I am indifferent to short and mid term market slumps. If I were selling shares, I would be very sensitive to slumps.

Get out of the theoretical and into the real world.

if you’re happy with it that’s all that matters I guess. but I always measure against either an S&P 500 or total market index(which have nearly identical performance over the long run). I know psychological factors contribute to investing decisions much more than they should, but Ive heard plenty of other people say that their strategies play out well for them, often not realizing that they are spending more money to get below market performance.

You say “get out of the theoretical and into the real world” but the graphs I posted are of real world historical performance of various funds. The real world may work a little different than you think.

 

[cvgunman]

Hey y'all. Been some time since I've been on or even posted. This thread caught my attention! It's been over 30 years since I practiced or had my series 6, 7 and 63 licenses to sell stocks, bonds, mutual funds, etc., but all the talk on dividends, one must understand what a dividend is...PROFIT.

Companies decide to either pay a dividend (usually a pre-determined percentage of profit) or not (reinvesting the profit back into the company). How much to pay out as a dividend is generally determined by the companies Board of Directors. Some companies pay the same amount each month, quarter or annually while others pay a percentage, whereby the dividend amount varies.

As investors, one may buy investment vehicles based on dividend payout and do one of two things: take the dividend as income or reinvest it back into said investment vehicle thereby buying more shares.

I don't claim to be a bright man, but this seems pretty straight forward.

Y'all can beat me up now

 

[oldag]

Whether it’s $1 or not doesn’t matter. The point is that an investor is not gaining anything from the dividend. They had more of a role in the past but have mostly become obsolete.


if you’re happy with it that’s all that matters I guess. but I always measure against either an S&P 500 or total market index(which have nearly identical performance over the long run). I know psychological factors contribute to investing decisions much more than they should, but Ive heard plenty of other people say that their strategies play out well for them, often not realizing that they are spending more money to get below market performance.

You say “get out of the theoretical and into the real world” but the graphs I posted are of real world historical performance of various funds. The real world may work a little different than you think.

Your fund examples are specific and discrete examples. They don't represent the entirety of investing.

The real world is what is in my account.

 

[leVieux]

In my case, the real value in owning rental property has been in being able to retire 15 years ago at age 44 and my wife retiring with me at the same time. Priceless.

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Understood.

An old friend in the RGV had his own program of building 3BR 2BA “starter homes” to sell for $80K in 1990 dollar$, but carrying the loan himself in a downpayment then“rent-to buy”.

Many in that market either default of have to get-out for other reasons, so he’d get the homes back to re-sell.

Eventually he owned quite a few of these homes free & clear, was able to retire w/ > $350/yr net income.

I was to dumb to do it myself back then.

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[popper]

Compound interest works in reverse also. Even 2% inflaton is a joke. Ol Jellen lies.

 

[leVieux]

Compound interest works in reverse also. Even 2% inflaton is a joke. Ol Jellen lies.

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Remember that the political class wanted to leave Gold for FIAT CURRENCY to keep our manufacturing exports healthy; then they ran-off most of the manufacturers.

Then, I wonder where all that silver they took out ouf our dollars, half-dollars quarters, & dimes went ?

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[mroper]

Gains in stock prices are unrealized until stock is sold. Real world scenario . End of Q1 I cash my dividend checks for $500.00
I go out and buy a New Gun with it or pay living expenses, etc.. If you wanted to do that you would have to sell some of your shares to do same.
So end Q2 I get the same 500.00 or maybe 502. Stock might have went down a dollar a share for you or stayed even. You again have to sell shares. Your stock will need to start to exponentially increase to keep up with me. eventually you will have no shares . In this secario I will have the same amount of shares.

 

[msharley]

 

[ZX9RCAM]

Paid this years $3k home owners insurance with dividend money.

 

[Eastexasrick]

Paid this years $3k home owners insurance with dividend money.

Bought a used tilt bed utility trailer with mine.

 

[Vaquero]

Bought a used tilt bed utility trailer with mine.

Reinvested mine.

 

[Havok1]

Your fund examples are specific and discrete examples. They don't represent the entirety of investing.

The real world is what is in my account.

Feel free to throw out a fund ticker and I’ll run it. If youre actually beating the market on a consistent basis, I, and the vast majority of the financial world who can not consistently beat the market would all love to know how.