Dividend vs Growth Investing Turf War - Which one wins?

Dividend investors and growth investors will fight each other until their dying breaths. But which one is really better? Let's settle the debate once and for all.
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00:00 Growth vs Dividend turf war rules
02:29 Bottom Line Up Front
03:24 Performance Comparison: Growth Dominates
06:02 Where Dividends Shine
09:12 2 Most Important Images
14:08 My Growth & Dividend Portfolio

[djayjp]

I'm sufficiently leveraged for my Personal Risk Tolerance.

[philcrowley]

I didn't start out as a dividend investor, fortunately my 401K was in growth mostly and even though I had a modest salary for most of my life I just kept my mitts off of the retirement account. Now I rolled it into an IRA and bought dividend income stocks. I wasn't able to compound dividends over the course of decades, I just got here by market growth. Now I'm making $62K per year on $600K

[John-wwfv]

It's essential to understand the difference between dividend and growth investing to determine the best approach for you

[reaalitykinggs]

I also like having a smaller percentage of my portfolio in dividend positions, it keeps me motivated to stay on track.

[TyKOmain]

A few things to know,
1. Bird in the hand - dividend paid is more valuable than a increase of value because it’s more tangible
2. Dividend Irrelevancy- which is a Miller Modigliani perfect market theory that says dividends paid simply come out of the value of the company and it doesn’t really matter. In practice companies rarely drop as much as their dividend adjusted for beta market move. People arb this.
3. Dividends are only paid when companies do not have higher growth options to invest in. Probably true but they are also paid to, make shorts more expensive and gain inclusion into more indexes.
4. Dividends are not tax efficient, stock buy backs returns the same money to investors but are only taxed at 1% vs the prevailing rate on dividends. Compounding is very powerful and delaying tax makes it even stronger. This also applies in countries that have different tax rates for dividends and capital gains.

[bulls-nation]

I run a mix. Growth in my roth and 401k. I run dividends in my Individual investment account. Seeing the payments come month after month keeps me in the zone. Works out best for me.

[mycathasawhitetoe]

I helped my sister out with investing. For her we decided to take a dividend approach mainly because she didn’t want the hassle of knowing when to and not to sell. She has a high income so she’s able to put a lot of that away. Eventually she wants to be a mother and that would mean a lower future income. So building that passive income portfolio for her is really important to her despite the lower return.
I’m more growth oriented and financially savvy but am investing in dividends in my Roth IRA despite having a high risk tolerance. That’s just my preference for retirement.
Basically my point is everyone is different so there is no single right or wrong answer.

[glowing_clod]

Eithers good its a preference really. One thing im sure either side can agree on is its better to be in the market in one form or another as opposed to not at all.

[matthewdupree]

The thing you missed here is that we've been in a declining or low interest environment for a really long time (which favors growth because borrowing is cheap) and have yet to see if this trend holds when borrowing isn't as cheap... growth stocks are not OBJECTIVELY better but have overperformed value for a long time

[PegoraroMarco]

Great video! An additional detail: in some countries, dividends are taxed more (or less) than capital gains. Which might change the result of the total gain calculation over the years.

Always account for the tax rate in your country on top of the net returns.

[kubilaybalci]

good thing belgium takes 30% tax on dividends so unless i hit it big i gotta stick to growth investing

[Will-ojun]

"Decades from retirement"

We never retiring

[sasukeunchia]

best money youtube channel on the platform, honest and royal.

[tawanasmith]

You’re comparing 30 years of returns to 12 years of dividend growth. You are also saying the dividends are not being reinvested. Not an apples to apples comparison at all.

[SivanMundru]

This is the best explanation on this matter, I have seen on the web. Settles the dilemma for me. Thankfully subscribed!

[Roofusthedufus]

Great vid Mikey. I own Schd and Dgrw, then trade options with what's left over. Perhaps I'll have to buy Voo as well. Either way, I love what you do, my friend.

[WillMoon]

IMO dividend stocks make sense in something like an IRA where you get tax protection, and with companies that are both dividend and growth focused. To me that’s mainly BDCs and REITs, and a few specialized industry plays like commodities trusts and mining stocks. I just have a really hard time buying into companies with PEs in the 50+ range. What’s actually pushing VOO up is the fact that those ETFs are subject to a vast amount of capital causing PE expansion, which makes the whole system tippy.

[ShimShammidy]

Goated info and quality content as always, ty bro

[scottwilly]

My biggest positions are growth however the plan is to pass on my portfolio to my family when I'm gone and they don't care about stocks and have no interest in learning. Building up a sizeable dividend position means they have income without having to do anything. Also, it's nice to be able to take some time off work and still be getting paid.

[wowone]

Super helpful video, excellent content as always Mikey!