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THE GUIDE TO DIVIDENDS:

Anytime you buy a stock, that entitles you to a small portion of that company’s profits – and, sometimes, those profits are distributed to you on a regular basis in the form of a dividend.

PROS:
-They’re somewhat insulated from the stock market.
For the most part, you know that you’ll get a predictable dividend payment – regardless of what happens with the market.

-Dividend Payments have also been less volatile than stock prices.
For example, the Simply Safe Dividends blog found that – from 1900 through 2018 – dividend payments remained fairly constant, with an average variance of +/- 10% during market downturns.

-Throughout Recessions – Dividend payments sometimes increase.
As Simply Safe Dividends points out, “in three of the above recessions…dividends paid to investors actually increased, including a 46% jump during the first recession following WW II.”

-Dividend stocks have been shown to provide a comparable return to the overall market.

In fact, Fidelity found that dividends accounted for 54% of market returns during times when inflation was above 5%.

CONS:
-Dividends ARE NOT guaranteed.
Even though companies generally try to avoid cutting or reducing dividend payments, this does happen, and because dividends are often a reflection of a company’s profits, in the event of a downturn, they may chose to pause distributions until conditions improve.

-Dividend payouts mean nothing when the company itself declines in value.
In this case, earning 5% annually might actually LOSE YOU MONEY when the stock itself declines 30%.

-There can be tax disadvantages.
Unlike buying a stock and only paying tax when you sell, Dividends are taxed the moment you receive them – and, depending on your tax bracket, it could be as high as 20%, or more.

-Dividends could flat-out be “irrelevant.”
In this case, two well-known economists argued that – if an investor needs money – all they really need to do is sell the stock – and that, dividends don’t actually create any more value for the company itself.

From my perspective, though – MONEY ISN’T FREE, and even though you’re getting paid a dividend, that REALLY just comes out of the company’s cashflow that isn’t being re-invested to grow the business.

That’s why I think that the real benefit of “dividends” isn’t so much that they’re a better investment, or – that they’re superior to a stock that DOESN’T pay a dividend – but, instead – they give you the psychological benefit of receiving steady income, without the need to physically sell your shares to collect your money.

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46 thoughts on “How Much $ You Need To Live Off Dividends (FOREVER) | Onlyinvesting.info”
  1. I was an unexperienced stock trader and i lost over $30K when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I find one source to recover my money, at least $5k profits weekly. Thanks so much Mrs. Maria Reyes

  2. Let’s say I am poor(hypothetically 😂)… I have 50$ in Coca Cola my only dividend stock, how do you recommend me building a dividend portfolio? Spread 100$ into 10$ each dividend stock per month every single month or what is a good way to do this?

  3. My dividend journey began when I realized that two particular expenses in my budget were always going to go up and never go down. The two expenses were taxes and insurance. I realized that the dramatic rise in both will need some added income. So, I started buying shares paying dividends. I can now see that this will be the path I need to take to make sure those two expenses will not overtake my future income.

  4. Are there ETFs that continually pay 10% or more annually? Watched another youtube video and it sounded like there is and he went on to say if you invest $10k once in voo, or vgt or schd etc and didnt add any further money and reinvest the dividends that by yr 30 there would be over $1 million. Is this even possible?

  5. I would reinvest the dividends of the ticker symbols AVGO, SPLV, VTI, and VOO. They offer a high CAGR combined with monthly and quarterly dividends and broad diversification. For hedging, I would use some of the dividends to buy IAU (gold) ETF and cryptocurrencies like Bitcoin and Kaspa.

    Please note that this is not financial advice.

  6. I can use geo-arbitrage to find the perfect place to live and minimize my cost of living and taxes. The Expatistan and Numbeo websites provide valuable information for this, which will increase the purchasing power of my growing portfolio and passive income. I will also set aside a portion of my annual passive income for unforeseen emergencies.

  7. stocks will continually drop and the companies can revaluate thier stocks like a milimeter to an inch deeming long term stocks kinda meh. medium term wise i feel its a good idea but for long term im sure someone will profit over people buying stocks with companies knowledge. theres also stocks you can trade if your lucky i feel and some stocks that will go up continually with inflation so you can win or lose depending on the companies success, companies will sell their comanpies before bankruptcy even the companie generates wealth. the companies just don't want to lose profit over positives and negatives with bonds/credit and spending.

  8. You'd need much less than $1.6mil if you're exlusively investing in Dividend Aristocrats – your calculator doesn't account for their dividend growth. After a 40yr period, you have a much higher YOC, meaning if you start investing early enough and focus on dividend growth and solid businesses, you probably only need around $600k to achieve the $50k dividends/year.

  9. The results of dividend aristocrats beating the SP500 is confusing because when I compare total return to the sp500, it lags. Big fan of dividend stocks but that study seems off.

    Love the video though!

  10. We might need 50k average for a US retirement, but frugal people can live on way less.
    And in European countries, not in big cities, you can live off 12-20k / year. That means only 150-300k portfolio 🙂

  11. Like Warren Buffet said, dividends are only good if the business you're investing into can't make good use of that capital. So, if you're trying to invest in businesses with actual growth, looking at dividends is a waste of time. Why are you investing into a company if they're returning capital to you because they think you can make better use if it than they can. It's not much different from bond investing. The way I see it, if you have a $1 million at some point, that'd be enough to create a portfolio that would pay you between 50k – 70k in dividend income.

  12. I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Amelia Bett

  13. I’ve been diligently working, saving and contributing towards early retirement and financial freedom, but since covid outbreak, the economy so far has caused my portfolio to underperform, do I keep contributing to my 401k or look at alternative sectors to meet my goals?

  14. Dividends from the stock market encouraged me to begin investing. What matters, in my opinion, is that if you invest and make additional money in addition to dividends, you will be able to live off of dividends without selling. It implies that you can provide that benefit for your children, giving them a head start in life. I've invested more than $600,000 in dividend stocks throughout the years; I'm currently buying more today and will continue to do so until the price falls even further.

  15. Yeah! man, It sounds like people are questioning the legitimacy of your dividend investment portfolio and are asking for proof of monthly dividends and withdrawals to a bank account. Be transparent about your investment strategy and the platforms you're using. Explain the types , why these ticker symbols and investments you're involved in and how they generate dividends , how long do you intend to keep, do you rebalance ?. Understandably, sharing bank account details publicly is not advisable due to privacy and security concerns. However, you can consider providing redacted screenshots that show the relevant transaction details without revealing sensitive information

  16. Wouldn't it make more sense to just buy bonds then since the yield is normally higher on average, and many of them are close to the same risk? The goal being income of course, not growth.

  17. I think it's important to stick to stocks that are immune to economic policies. I'm looking at NVIDIA and other AI stocks. It seems AI is the trajectory most companies are taking, including even established FAANG companies. Maybe there are other recommendations?

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