ฝัง
- เผยแพร่เมื่อ 6 ก.ย. 2024
- Living off dividends for retirement income is easier than you think, but requires some hard work upfront. In this video, we look at how living off dividends can happen using a dividend income calculator that takes into account time, monthly savings, yield, and of course the most powerful piece of the puzzle - dividend growth over time. How much do you actually need to live off dividends? We'll take a look at this presentation which reveals just how powerful dividend growth stocks can be. Living off dividend passive income should be a part of every retirement strategy because the income grows over time which helps offset the effects of inflation. Simply put, living off dividend growth stocks means your quality of life will increase over time.
RESEARCH PIECES USED IN THIS VIDEO:
1. Dividend Growth Investing | The Best Dividend Growth Stocks
• How to Find the Best D...
2. A JNJ Stock Analysis and Review
• A JNJ Stock Analysis a...
3. VFC Stock: Analyzing the 6% Yield
• VFC Stock: Analyzing t...
CHAPTERS:
Intro
How much money can I make?
The top ten dividend growth stocks
What dividend yield to expect
Yield over time
A realistic yield is 3.2%
A dividend reinvesting plan
A dividend income calculator
Growing income vs fixed income
A real world example
Conclusion
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Read all the Nanalyze Premium articles you'd like for free! Sign up for a 30-day trial of our monthly subscription with no strings attached: www.nanalyze.c...
DISCLAIMER: Our content is intended to be used and must be used for informational purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, along with independently researching and verifying, any information contained within our TH-cam videos or on our website, whether for the purpose of making an investment or otherwise.
#dividendincome #dividendstocks #dividendgrowthstocks
#dividendgrowth
#dividendgrowthinvesting
I came across your channel a couple months ago and have appreciated the research and presentation. I'm a financial analyst for a utility Coop and approaching FIRE, so I am familiar with the concepts, but I am always looking to expand my knowledge and double check my own research. I’m especially interested in small cap growth / disruptive stocks, which is what initially led me to your channel. You do a great job of balancing intro concepts while also diving deeper into the analysis you find important. I started investing more in individual stocks 4 years ago and try to focus on my top 10 small cap growth and 10 quality, high yielding value-oriented convictions. With dividend yield I particularly like stocks that pay around, but ideally above the VYM yield and have a payout date that’s not in March, June, Sept, Dec. I like the idea of improving my dividend ladder and the consistent additions to my reinvestment reserves. You’ve made several great dividend videos recently. Thanks, and I look forward to watching more of your content.
Hey Will, thank you so much for sharing. So above VYM yield right now would be 3% or higher. That's a reasonable target. Lots of investors try and chase yield today while ignoring how rapidly these dividends can grow over time. You mention a dividend ladder and am presuming that's timing? We didn't give that too much consideration, instead just focusing on the cash that come in during each quarter. So month one has a smaller amount (about half of month three) and month two in the middle, month three is the big one. Repeat 4X a year. The timing of the "mailbox money" has never been much of a concern but, come to think of it, it would be nice of the income streams were smoother. Nonetheless, the end effect is the same :) Regarding dividend-related videos, we don't cover DGI on Nanalyze website (our articles) and TH-cam affords us some flexibility on topics which is why you'll see videos like this. Generally this is about marketing, but a lot of paying subscribers watch the videos so we'll look to move some of this content behind a paywall in the future. This video was in response to many subs asking the same "what can I get" questions. Thank you for sharing your experiences! We learn as much from the audience as they learn from us.
@@joepiv I learned a few years ago to be careful chasing too much yield, lol, so I totally agree with you. It’s always a good reminder when chatting about dividends to reinforce being careful in chasing yield and better to focus on quality. I’ve developed a new appreciation for steady dividend growth this past year. There does seem (was in 22) to be a decent list of companies around 4% and at times the opportunity to find a dip through bad quarter, negative press, options expiring, etc and pick it up with an even higher DY. I’ve found paying attention to sector rotation can be beneficial too. I was interested in energy in 2019 and that worked out well buying through 2020 and trimming last year. My CPS TTM DY is 9.3% for my energy positions, but I might move completely out of that and take my LTCG, near ATH.
@@joepiv Looks like you shy away from financials. Is that because so many of them had a dividend cut after 2008? And that would be a negative factor in your formula? Do you consider them too risky going into a possible recession? Should higher rates benefit them? My dividend ladder approach is related to smoothing out the timing of payments. I was drawn to the financials last year cause the valuation ratios were low and yield high (USB, MS, JPM etc). Additionally, many of them payout in early to mid month 2 / Feb, giving me a inflow of cash 30 to 45 days before most ETFs payout (like what’s coming in March). Or 30+ days after month 3, like Dec. But I agree, same quarterly result / end effect : ). Also, what are your thoughts on Verizon? I didn’t see it on your list. The payout timing, yield and history works very well as part of my overall strategy. One last question, do you factor in qualified dividends vs ordinary (REITS, MLPs, foreign)? I’ve become more conscious of improving my tax strategy. Sorry for the lengthy response, where I currently live I’m not around people overly interested in these topics. I enjoy and find benefit from some of these TH-cam communities that develop. My respect for your analysis continues to grow and I’ll be curious to pick your mind from time to time. I’m happy to subscribe and support your content.
Indeed the growth factor is critically important so that your quality of life appreciates over time. If dividends aren't growing, you might as well just hold bonds. As for sector rotation, we take a "set it and forget it" approach which avoids market timing and tax implications while helping us sleep perfectly every night ;) Thank you for sharing your experiences in dividend investing!
@@william.stafford We're holding three financial stocks in our DGI portfolio, so I wouldn't say we shy away from them. A 30-stock portfolio across 11 sectors means roughly 3 per sector, though that's not how it works. For example, there are few companies in the Information Technology sector, and none in the Communications sector after T left. We only consider dividend champions in our universe which is calculated based on raw data purchased directly from Nasdaq for all companies in the United States. For that reason, we may not include stocks others do. That's because we're actually calculating this using raw data (don't believe Verizon is a dividend champion, for example). Payout timing isn't applicable if you have a cash buffer to smooth things out. We don't take into account qualified dividends vs ordinary, though that might be a topic to investigate and publish some content on - very good questions you are asking. Thank you for sharing your thoughts! People learn from comments as much as they do content, especially intelligent comments like the ones you're offering up.
65% on your way.. wow that's amazing man!
That's the power of compounding!
The holy grail!! You achieved it, many congratulations. Long may you compound Joey. P and Team. 💪🏽💪🏽💪🏽
Will soon proclaim the same if aspirations materialize in time. 👌🏼👌🏼🤙🏽🤙🏽
Life has a way of throwing curveballs. I never feel in the clear, I always have to be hustling. Thank you for the kind words and keep the faith. Time flies by quick and before you know it, you'll look back and say, wow, I had no idea I'd finally be able to get here. The harder you work and the longer you save, the luckier you'll get ;)
I don't like re-invest dividends on Schwab for stocks and etf's, because you can only sell fractional shares at market price - which sometimes fluctuates pretty wildly. For mutual funds, works great.
Did not know this, thank you for sharing. Okay, so on this topic, we used transfer agents to DRIP, some which provided the share discounts we talked about - firms like Computershare and AST. Their service sucks (think faxes), some of their fees are ludicrous, but they (at least used to) offer some good options. That was back before brokerage fees were free. Point is, if Schwab's fluctuations are reasonable, don't sweat it too much. For mutual funds, be sure you're not paying too much. ETFs are dirt cheap these days. Thank you for the useful feedback!
This is such a great video. Appreciate it Joe - happy to be a premium subscriber!
Nothing makes us more delighted than happy customers. Thank YOU for your support which makes this all possible. Joe P.
I particularly liked the hippopotamus and the elephants. Also great content
Thanks so much Simon! Hippos are mental. Whenever they see humans they just start charging, water or land. It's kind of how I feel in the mornings before coffee.
I do have one quick question. I'm 36 y.o currently contributing the max to a ROTH IRA through a fee only advisor through Schwab. It's well diversified but appears to follow a 60/40 strategy. I also contribute 10% of my income to a ROTH TSP with a 5% match. TSP investment options are fairly limited. It's basically tracking the SP500 with some international and small cap exposure. If you were me, would you take the 5% not being matched by the TSP and manage it myself? Say, through a dividend strategy like the one in this video?
I also use Schwab for personal banking and to trade some of my own book and find them to be great - especially global ATM fee refunds :) Their advisory seems solid and you can't go wrong with the strategy you described. Matching is free money and you do whatever it takes to make sure you always take free money. Always max on tax-free accounts. There is nothing wrong at all with S&P500 trackers and you should just roll with it. If you make decisions, always make them on your own convictions. It helps you sleep better at night. Sounds like you are set. Maybe leave that alone and just save a bit more every month and then invest in a new strategy? Thank you for the comment!
Fantastic video.
There are tax implications of investing in dividend paying stocks as opposed to stocks focused on capital growth. Dividend reinvestment could become a tax issue I guess.
FYI... this strategy is even more valuable in a place like Australia that attaches franking credits to dividend payments.
Cheers for that Dean! Yes, taxes differ by country which is something each investor will need to consider. "Trimming" and special dividends also have tax implications. It's a necessary evil.
Dividends are great. Selling covered calls and cash secured puts for premium are a strategy that pays you even if you're invested in shares of a non-dividend paying stock.
That's very true, but it's a more advanced strategy that retail investors ought to utilize with caution. Is one downside that you might get called, and then that will bring with it tax implications? We may look to cover this in a future piece. Good comment.
Wow great info...may i ask how old u are? I'd love to do what you do, but I never got into stocks at a young age, didnt know anything about them as my family of origin didnt have an investing know-how or strategy and didnt learn from school or friends. Can someone still do well with dividend investing starting in their 3rd decade?
Really glad you found value in the piece. I just noticed a typo - should be $5,000 a month, not $5,000 a year on the spreadsheet for getting to $1.5 million and $4K a month. You ask a good question. I'm mid 40s, and I think age is less important than monthly income. You said third decade so 60s I presume. If you can invest every month for 10-15 years a decent amount then you can accomplish what the video demonstrated. If you have a lump sum, dollar-cost-average into the market. I made all the mistakes under the sun before developing this strategy so no sense in crying over spilled milk. Onwards and upwards!
Also, if you have kids, make them watch our video on "How to Make Money," and then this video. They'll do very well starting at a young age.
@@joepiv thanks a lot, hopefully going to be a paid subscriber to u soon.
@Joe P. I was going to say... I'm closer to financial independence than I thought! 😉 I recently did some trimming in the number of TH-cam channels Im subscribed to. I went from 30 stock related channels to 5. Keeping yours was a no brainer. Great and incredibly useful content as always. Thank you!
@@Dgkeys5 Good job on being further ahead on your goals Caleb. Use the momentum to climb even higher. Really appreciate your kinds words and thank you for keeping us in the short list! Lots of noise out there so good to trim it down. You're most welcome.
Hey! Great video! BUT, what happen when a company which pay dividends acording to the strategy lose 30%-50% of its value? After you buy into a grow dividends company, there is any strategy to exit that position too? I mean, you can't stay there forever just because it pays you 2%...
Great question. The only company we've seen some paper losses on is VFC, though we've trimmed that also before, so would need to run the numbers on the actual paper losses (it's been volatile), not that we really care about them much anyway. It's 3.33% of our DGI portfolio. We're okay if there's an occasional blowup. We put out a video on VFC (th-cam.com/video/_ow_Y1UCPpI/w-d-xo.html) and actually added some shares at these bargain basement prices, though not recommending anyone else should for two reasons - we don't give recommendations and the company has its problems. Always make your own decisions.
One of the greatest things about this strategy (and not emphasized in the video) is that you truly set it and forget it. These are quality companies, and strong hands step in to pick up shares when prices are depressed. Once you decide to go long, it's forever. The only reason you sell is if the dividend payment stops growing. Simple.
And your last sentence ignores the most powerful element of the entire strategy - dividend growth over time.
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Thanks very informative channel...🎉 great knowledge.
Teaching people something with every video is a priority. Thank you for the feedback!
Good morning! Would mind making a video on how to invest for dividend growth with ETFs, please? Like, I have SCHD, VIG, DGRO in my portfolio and I'd like to know whether these ETFs are good for the purpose of dividend growth. Thanks so much!
Please search out channel. We did an entire series on SCHD, like this video: th-cam.com/video/zaZWpr4hx0w/w-d-xo.html
Now have all my dividends and capital gains on drip
It makes a big difference over time
do you hold any REITs in your nanalyze portfolio? if you do, it would be a nice to hear your ideas about your choice. all the best.
We do, and that information - along with all 30 DGI stocks we're holding is available to (wait for it) Nanalyze Premium subscribers. ;)
@@Nanalyze fair enough :)
Great stuff!
Really glad you enjoyed the vid!
Where can I find this spreadsheet?
Drop us an email info @ nanalyze.com and we'll send it to you.
Can you compare living from dividends vs living from rent?
Occupancy rates are going to determine your income while dividends are a lot more predictable.
I think reinvest dividends may be a scam, like odd gift card balances. There will always be some fractional amount of stock that you will never be able to realize a gain on / sell. Maybe this is just a marginal loss of value.
Most brokerage firms have fractional ownership which extends out at least a few decimal places allowing investors to check the math. And they always should.
trying to set this up for myself now... so many years wasted i could have been tossing in 100 bucks a month
No better time to start than the present. Today is the first day of the rest of your life. :)
@@Nanalyze yeah thinking about lost opportunities isn't the way we should think really cos there are always new chances.
You view Spin-offs as cash bonus, what!?
Most the time we will exit a spin out and reinvest the dollars. There's usually a reason they spin something out.
@@Nanalyze The way you worded it in the video sounded to me as if you were treating the money like a regular dividend payment, which irritated me.
Thanks for the clarification.
I'm broke.
You're the perfect PHD candidate - (P)oor (H)ungry (D)etermined
@@Nanalyze Thank you