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I invest for income. I used to call myself a Dividend Growth Investor, but these days about 25% of my portfolio is in investments that are not expected to increase their dividends much at all.
These are usually in CEF's that pay a higher yield or fixed income that pay a decent amount and are more stable. (for example I dipped my toes into Baby Bonds a little).
At this stage of life I am not tapping into the income. It essentially all gets reinvested (either automatically or manually), which of course produces more income. (I do have some stocks I'm over allocated in and I take those in cash, and then purchase other stocks). When I start to tap it, I will simply use the income. Not tap into principle. I won't even use all of the income. I'll still reinvest at least 25% so that the income keeps increasing even in "distribution phase".
My increases are usually about $130 or so a month which means about $1,500 in income increase over the course of the year. So if you have $10,000 income now, in 3 years you have almost $15,000 in income.
My goal is $1,000 a year (which I've been exceeding). If every year I have $1,000 more income then when I started I'll be a happy camper.
In September my income increased by $102. October we picked up $141. I invested my dry powder in November when income stocks went on sale so my income jumped $275. I expected December to be about $75 unless I got a dividend increase.
But luckily I did get a dividend increase from HASI (an energy REIT), so we ended up with an increase of $106 ($1,272 annual rate). For the calendar year we ended up with an increase of about $1,500. So a very successful year.
We also got some special year end dividends from some of our CEF's. Since they are special (not consistent) they don't directly add to income but since they are reinvested into more stock and that adds slightly more income.
Income investing is not for everyone. But if you are interested, ask. If you want to argue, I'll ignore it.
ssssssh , don't spoil the thread with facts . you can read all his other threads to find out why in his mind it is different . we beat this to death already with him . if he believes it is different ,then just let him believe it .
I invest for income. I used to call myself a Dividend Growth Investor, but these days about 25% of my portfolio is in investments that are not expected to increase their dividends much at all.
These are usually in CEF's that pay a higher yield or fixed income that pay a decent amount and are more stable. (for example I dipped my toes into Baby Bonds a little).
At this stage of life I am not tapping into the income. It essentially all gets reinvested (either automatically or manually), which of course produces more income. (I do have some stocks I'm over allocated in and I take those in cash, and then purchase other stocks). When I start to tap it, I will simply use the income. Not tap into principle. I won't even use all of the income. I'll still reinvest at least 25% so that the income keeps increasing even in "distribution phase".
My increases are usually about $130 or so a month which means about $1,500 in income increase over the course of the year. So if you have $10,000 income now, in 3 years you have almost $15,000 in income.
My goal is $1,000 a year (which I've been exceeding). If every year I have $1,000 more income then when I started I'll be a happy camper.
In September my income increased by $102. October we picked up $141. I invested my dry powder in November when income stocks went on sale so my income jumped $275. I expected December to be about $75 unless I got a dividend increase.
But luckily I did get a dividend increase from HASI (an energy REIT), so we ended up with an increase of $106 ($1,272 annual rate). For the calendar year we ended up with an increase of about $1,500. So a very successful year.
We also got some special year end dividends from some of our CEF's. Since they are special (not consistent) they don't directly add to income but since they are reinvested into more stock and that adds slightly more income.
Income investing is not for everyone. But if you are interested, ask. If you want to argue, I'll ignore it.
I agree with you that I like getting dividends as opposed to selling shares of stock. We can argue that growth investing for total return is better in dollars and cents, but I still like not selling shares for day to day income. Especially when we hit a few years of a recession.
a share is $100, pays $0.25 so is worth $99.75. Reinvested, it is still worth $100... except a little less because you paid taxes on that $0.25 before reinvesting it
what's wrong with selling a share? It's just a number to track $ amounts, the "number" doesn't mean anything, it's what it represents that does
with a mutual fund and fractional shares, if you need $X, you can take out exactly $x, with shares, you round to the nearest approximate whole share when selling/buying. But dividends aren't "exact" either.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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2015 and 2016 I was primarily a dividend investor. The trouble was stocks that paid divs made big up jumps that made trading more profitable than the divs. So I sold and waited and looked for other investments. And then they dropped (FOMC rate increase threats) so I got back-in. Then they rose quickly and I sold again. I am cautiously buying again. I may do more CEF, but the spreads are big .
a share is $100, pays $0.25 so is worth $99.75. Reinvested, it is still worth $100... except a little less because you paid taxes on that $0.25 before reinvesting it
what's wrong with selling a share? It's just a number to track $ amounts, the "number" doesn't mean anything, it's what it represents that does
with a mutual fund and fractional shares, if you need $X, you can take out exactly $x, with shares, you round to the nearest approximate whole share when selling/buying. But dividends aren't "exact" either.
Why do people automatically assume you pay taxes on dividends? I get dividends from funds I own in my Roth and Traditional IRAs and I never pay taxes on the dividends. Also if you have a HH Taxable income under $75k you don't pay taxes on LTCGs or qualified dividends that are in taxable brokerage accounts.
Why do people automatically assume you pay taxes on dividends? I get dividends from funds I own in my Roth and Traditional IRAs and I never pay taxes on the dividends. Also if you have a HH Taxable income under $75k you don't pay taxes on LTCGs or qualified dividends that are in taxable brokerage accounts.
It goes without saying in Roth and Traditional IRAs.
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. So I sold and waited and looked for other investments
. And then they dropped (FOMC rate increase threats) so I got back-in. Then they rose quickly and I sold again. I am cautiously buying again. I may do more CEF, but the spreads are big 
.
