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> also don't fully understand the dividend investor mindset Suppose you have ~5 million invested for retirement. The dividend you could get from this is ~100

by fooker 4y ago

> also don't fully understand the dividend investor mindset Suppose you have ~5 million invested for retirement. The dividend you could get from this is ~100k-150k per year. That is a very livable salary if you want to retire early (45? 50?) and focus on your family and hobbies. Does this make sense yet? It's essentially a conservative way to lead your live if you are not necessarily married to your profession.

epistasis 4y ago
No, it absolutely makes no sense to me. Dividends are taxed as income, capital gains is taxed at different rates.
- fooker 4y ago
  >Dividends are taxed as income. Exactly, you either supplement your income with it or retire early and replace your income with it. There are whole generations of people doing this.
- jmillikin 4y ago
  In the USA, dividends may be taxed at the capital gains rate depending on the company (Intel qualifies) and how long the position has been open. https://www.investopedia.com/terms/q/qualifieddividend.asp https://www.investopedia.com/terms/q/qualifieddividend.asp
  - epistasis 4y ago
    Aha, thank you, this is exactly the reason.
stevenhuang 4y ago
Dividends are forced liquidation events. If you want dividends simply sell a portion of your holdings every quarter. When one focuses solely on dividend yield and not total return, which includes capital appreciation, it's a sign they don't really what's going on. Where do you think the dividends are coming from? Straight from the company's market cap. By preferring companies that consistently pay high dividend yields you're selecting for larger and established companies that have no better way to reinvest the money. This may result in a fine choice if you want income, but the important distinction is not because of their dividend yield... it's because of their positions as market leaders. Thus you may do just as well by selecting those large market leaders that pay no dividends but are reinvesting heavily.
- fooker 4y ago
  >Straight from the company's market cap. That's not how it works for a publicly traded company in a free market. Historically announcing a dividend has usually caused more people to be interested in buying, which increases your market cap correspondingly.

by fooker 4y ago

epistasis 4y ago

No, it absolutely makes no sense to me. Dividends are taxed as income, capital gains is taxed at different rates.

fooker 4y ago
>Dividends are taxed as income. Exactly, you either supplement your income with it or retire early and replace your income with it. There are whole generations of people doing this.
jmillikin 4y ago
In the USA, dividends may be taxed at the capital gains rate depending on the company (Intel qualifies) and how long the position has been open. https://www.investopedia.com/terms/q/qualifieddividend.asp https://www.investopedia.com/terms/q/qualifieddividend.asp
- epistasis 4y ago
  Aha, thank you, this is exactly the reason.

stevenhuang 4y ago

Dividends are forced liquidation events. If you want dividends simply sell a portion of your holdings every quarter. When one focuses solely on dividend yield and not total return, which includes capital appreciation, it's a sign they don't really what's going on. Where do you think the dividends are coming from? Straight from the company's market cap. By preferring companies that consistently pay high dividend yields you're selecting for larger and established companies that have no better way to reinvest the money. This may result in a fine choice if you want income, but the important distinction is not because of their dividend yield... it's because of their positions as market leaders. Thus you may do just as well by selecting those large market leaders that pay no dividends but are reinvesting heavily.

fooker 4y ago
>Straight from the company's market cap. That's not how it works for a publicly traded company in a free market. Historically announcing a dividend has usually caused more people to be interested in buying, which increases your market cap correspondingly.