This ETF Makes You the Most RICH in 10 Years (Dividend ETF vs Growth ETF)

Which ETF bring a bigger total return? Best ETF to buy now: Dividend ETF vs. Growth ETF. Is it better to invest in dividend stocks or a dividend ETF and pay the taxes on the dividends or better to invest in a growth ETF until you have enough capital to then transfer to a dividend ETF like SCHD to live off the passive income forever?
#dividendetf #schd #etfinvesting

0:00 – Should you invest in dividend stocks in your brokerage account?
1:06 – Growth ETFs to avoid taxes
2:16 – Where is the best place to invest a lump sum?
3:09 – How stocks are taxed
3:54 – Dividend ETF Total Return
5:57 – Growth ETF Total Return
7:48 – SCHD vs. SCHG Total Return
8:29 – Why I choose Dividend ETFs long term

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[rexrandall]

Not investing in dividends because of taxes is like not putting money in a high interest savings account because of taxes.

[Sylvan_dB]

In addition to the problem of taxes when shifting from growth to dividends, don't forget timing. Growth tends to be more volatile and might be down at the time you need to sell. Focusing on growth can be a trap. And for me psychologically I find it much easier to focus on dividends, especially when the market is down and/or volatile.

[CalmerThanYouAre]

Great video! I own a 50/50 split of SCHD and SCHG in my Roth. 85% SCHD in my brokerage account with 15% cash for options trading using cash and SCHD as collateral. Excellent system.

A great approach tax-wise would be to build your SCHD allocation to amount of dividend income that puts you on a glide path to hit your target amount needed at your target retirement age with a paid off house. Then focus on paying down your mortgage after that. Sell the house, downsize, buy the next place in cash with tax-free equity growth and boom, tax-free retirement income until you take SS. Even then, taxes will be minimal. ✅

[BenJune]

I recently purchased the book, "Dividends Don't Lie" by Geraldine Weiss...The Grande Dame of Dividends. If you're a dividend investor you MUST read this book for her dividend yield theory. One aspect of her theory suggests that investing in only "blue-chip" companies that pay a dividend, is superior and less risky than those that don't. 1. Rising dividends over time boost share price and total return! 2. Dividends are the surest confirmation of a company's profitability and longevity. 3. Dividends provide a floor of safety under the price of a stock...a stock that pays no dividend has no such safeguard on its price. These are just a few examples and not the total theory...her book is amazing! I imagine these principals would also apply to ETFs (I could be wrong). Would absolutely enjoy a Prof G video explaining her theory with application.

[HomethaSick]

I love SCHG. It's the only thing in my portfolio that is green 😂😭

[will]

I love SCHD & G ! I’ve been purchasing both.

[emanstv]

Thanks for this comparison clearing this up!
This furthers my confidence in my investments of SCHD and SCHG 🙏

[lesdoon]

My growth ETF is ONEQ. All others are SCHD, DIVO, DGRO, and JEPI. Solid mix I think

[moneymanfernando]

How about this combination: 50% SCHD, 25% JEPI and 25% DIVO. This would provide income now with some capital growth potential. It would probably be for someone who is retired or close to retirement.

[keithjohnson]

I decided to go the growth route and use the volatility in my favor by selling way OTM calls of spyg in my IRA account. By doing this everything month I calculated (hopefully correctly) that between that and it’s quarterly dividend (which was just increased) I will be making between 5-6% more in addition to organic growth. Great videos for investors btw.

[ckcargile]

Would love a video of ETFs TSLY and OARK. I enjoy your videos. Thanks.

[NipItInTheBud]

You must have read my mind. I was asking myself this very question the day before you put out this video!! Great info as always!!

[rajk]

Great content as always! The only concern would be future growth of 13% ? The last ten yrs had ZIRP tailwind. Well this would still be the best alternative.

[jdgolf]

I own both. I will be retiring in 2 months, and later this year, I will stop reinvesting dividends from SCHD and that will be part of my income. SCHG is in my roth, and will be growth.

[mattrealhuman]

Great video! Also loved your 3 fund video, been investing in that the past year in retirement accounts

[robshelton]

Hey Professor G,
Thanks for all the great videos. I've noticed on most of your videos you really like SCHD. In addition, I saw that in 1 short video you displayed some favor towards SCHG. HOWEVER, on the video, "This ETF Makes You the Most RICH in 10 Years (Dividend ETF vs Growth)" - you highlighted Vanguard's VYM & VUG. I manage mine & my wife's Roth acct.s and I have approximately 4k & 2k remaining for investing in two of the following ETFs for 2023: SCHD; SCHG; VYM; and/or VUG.
If you were spending your money - which 2 would you invest in SCHD & SCHG OR VYM & VUG? Or 1) Is there a better combination of dividend-growth ETFs in which to invest?
2) Would you invest totally in the dividend focused ETFs?

[zanshinhabit]

So, if you want to exceed the out of pocket cap for contributions to a Roth, open an IRA, deposit the money, roll it into your Roth.

[Rob-dbcc]

If in retirement, you have a substantial number of shares, sell out of the money covered calls against your holdings to generate monthly income as well. Sell puts too. Just another tool in the belt when you are working with a decent sized account. Let the dividends continue to reinvest without touching the shares.
JMO, if you are playing the high dividend rate game, JEPI etc, best to do those in a ROTH/IRA vehicle during your wage earning years.

[rsoverdead]

How about non us citizens? They pay 30% tax on dividends, but do they pay on capital gains when they sell their etfs/stocks?

[danielsimonson]

I have settled on a strategy of maxing my Roth IRA before growing my Brokerage account. Splitting the baby as it were. As 6500 seems almost unobtainable to me, this is the best way of protecting future earnings.