How Much $ You Need To Live Off Dividends (FOREVER)

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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.

My ENTIRE Camera and Recording Equipment:

[SloanJane-xpkr]

Dividend investing is most effective when approached with a long-term perspective. While dividends can provide immediate income, the true power lies in the compounding effect over many years. I'm still looking for companies to make additions to my $350K portfolio, to boost performance. Here for ideas...

[AnnaSvensson]

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.

[AdamsFerguson]

My advice for dividend investors especially people that want to retire off dividends is to save for a bigger investment if you really want to retire off dividends, My major picks are SCHD and VOO and a few more that i can't mention because my FA Dianne Sarah Olson is really strict on discretion, anyway i digress, You can't expect to make a million from a thousand dollar investment that's where most people get it wrong, It's not a lottery!! Make realistic investments!! People say it's good to be greedy while investing..Yes, i agree but there's a difference between being greedy and being delusional haha. For example last year I invested 80k in stocks and made about 246k, but guess what? I put it all back and traded with her again and now I'm rounding up close to a million.

[JIANHENGLUG]

My strategy combines ETFs for dividends and growth, including JEPI, DIVO, QYLD, SCHD, and JEPQ. Last year, my dividends totaled $102K. but not sure how to mitigate risk thus far for this year...

[Americanpatriot]

Warren Buffett's perspective on dividends is that they may not be beneficial if a company has better uses for its capital to promote growth. Instead of focusing on dividends, he suggests investing in companies with growth potential. However, some investors see dividends as a way to generate income. It's possible to create a portfolio that generates a dividend income of $50k-70k with a $1 million investment.

[JefferyDuns]

I want a balanced portfolio with growth investments, safe investments, and also focus on dividends to gain up to $20K monthly, my concern is picking the right stocks that can survive a recession. How do i go about this ?

[scottarmstrong]

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.

[RichieAnnabel]

Transfer of wealth usually occur during market crash, so the more stocks drop, the more I buy, in the meanwhile I'm just focused on making better investments and earning more as recession fear increases, apparently there are strategies to 3x gains in this present market cos I read of someone that pulled a profit of $350k within 6months, and it would really help if you could make a video covering these strategies.

[benitabussell]

I was part of the recent layoffs at twitter and this bites hard. I am grateful that I kept some savings about; $600k and I am looking for ways to invest this into the stock market to generate good dividends to supplement for my monthly expenses.

[donovantobs]

As an lnvesting enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?.

[nicolasbenson]

A weak dollar can signal an economic downturn, making me to ponder on what are the best possible ways to hedge against inflation, and I've overheard people say inflation is a money-eater thus worried about my savings around $200k

[Riggsnic_co]

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.

[AsianSensationz]

Initially got into dividends to pay for HBO max off of AT&T dividends alone.
Now it's my favorite way to save money and control my impulse purchases.

[VanPeltufcyde]

The idea of investing a significant sum of money may be both thrilling and intimidating. There is potential for considerable wealth increase with the correct strategy. How can one take advantage of compound interest and potentially grow your retirement savings/net-worth to about $3M over time?

[briandijkshoorn]

While I do enjoy the market news videos, these are the type of videos I really enjoy, explaining and teaching personal finance. Going back to your roots!

[AddilynTuffin]

There is potential for considerable wealth increase with the correct strategy. I want to know; How can one take advantage of compound interest and potentially grow your retirement savings/net-worth to about $3M over time?

[simongoldie]

Did anyone notice Graham start out by saying…Whats up Graham, it’s guys here… made me laugh!!! 😂

[BusinessBrief]

"what's up Graham, it's guys here" 😂

[Jshart]

I know I’ve got a lot of dividends by watching your channel over the years and smashing the like button for the YouTube algorithm!

[elizabeths.]

Thanks for mentioning the cover called ETFs. Glad to get your perspective on it. Was hoping for this one for a long time. Great video.