Dividend Stocks- MONTHLY PAYOUTS

I just bought a shit ton of BMO Dividend ETFs in my TFSA so all the money I get will be tax free.

If I had the money I would just look at my ETFs and just buy a few of their top holdings and call it a day.

Some companies, like Pembina, pay monthly.

Not a bad strategy especially the tax free earnings.

>Passive income

I really wish people would stop using this term. It's the single most idiotic thing posted on Veeky Forums

I think in some instances it literally is passive income. My mom bought some dividend stocks 20 years ago and hasn't even looked at them since. she receives some money every now and again. that's pretty passive if you ask me

vti, vxus, vgt

Probably Ford.

>>This isn't for the lazyass who just wants to put money away and forget about it.

Lazy-ass investors are the most successful investors.

>Actually trying to build a portfolio for when you retire that way you aren't deadass broke living off Social Security payments of 350$ a month.

So what's so special about dividends? Don't get me wrong, dividends are nice. But if you can get 7-8% long-term stock gains, you don't particularly need dividends, you sell stock when you want some cash...

Why sell when you can have a steady cash flow. Theres something nice in knowing you have money coming in from a stable,dependable source.

>stable,dependable source.

You *do* know that dividends are sometimes cut, postponed, or dropped?

>2017
>still having to pull this from the archive every week

OUTSIDE a tax-advantaged account, a dividend stock will lose out to a growth stock over time because the dividends are taxable as long-term capital gains. This eats into your investment capital, and saps your compounding.

Consider two equivalent stocks -- a growth stock (Stock G) and a high-dividend stock (Stock D) -- both of which yield 10% per year. Stock G earns its 10% by price accumulation alone, and Stock D earns its 10% by paying a 10% cash dividend. You own 1 share of each, and they are both worth $100/share. At the start, therefore, both Stock G and Stock D are worth $100.

At the end of 1 year, Stock G is now worth $110 (10% growth), and Stock D is still worth $100 but has paid you a $10 dividend which you re-invest. Your return on both stocks is the same -- before taxes. After taxes, however, Stock G is still worth $110 (no tax consequences) but Stock D has only returned you $108 because you paid 20% in capital gains taxes on the dividends. (I'm using 20% to keep the math simple in this example, but the principle is the same for any tax rate.) So after one year, Stock G is ahead by $2.

After year two, Stock G is now worth $121 ($110 x 10%), and stock D is worth $108 ($100 original + $8 reinvested) but has paid you a $10.80 dividend, reduced by taxes to $8.64, for a total gain of $116.64. Stock G is now ahead by $4.36

Hopefully you can now see where this is going. Every year the spread between Stock G and Stock D is going to get wider and wider because taxes aren't depleting any of your Stock G capital.

INSIDE a tax-advantaged account, you don't suffer the tax hit when dividends are declared. You get to reinvest the full amount. Therefore, inside a tax-advantaged account, growth and distributions both add EQUALLY to your growth and your compounding. So what you should be focused on is maximizing your overall return (growth PLUS dividends) instead of focusing on one or the other.

There isn't anything special about high yield dividend stocks. It simply allows the shareholder to choose how he wants to spend, whether to keep the cash or opt into a reinvestment plan.

A lot of people opt into dividend reinvestment plans anyway, which is essentially simulating the company opting for capital growth instead of dividends.

At the end of the day, higher yielding dividend companies are losing more of their profits to greedy, impatient shareholders when it's probably best they reinvest in the company for maximum capital gains.

>So what you should be focused on is maximizing your overall return (growth PLUS dividends) instead of focusing on one or the other.

Lovely discussion and thank you for that.

Thanks for the basic gestalt.

>5 different stocks

>.68 total monthly

Why is this even worth it again?

say you have 10k shares, that's $6800/month. Not too shabby.

Minus taxes. Not to mention you're stuck with all your capital in a shitty stagnant stock that falls every time it pays out a dividend.

Is it really passive income when it's sucking your investment capital down the drain?

But with 3m after-tax you already got your investment back. Who cares about the stocks then?

>tax-advantaged account

Are there brokerages that have this available so dividend invest is actually worth it?

Have you tried bitcoin

why do people post so much about dividend stocks?

why don't they sell up 1% every quarter for income?

it seems like a meme for normies

>tax-advantaged account

>Are there brokerages that have this available so dividend invest is actually worth it?

A tax-advantaged account means a 401k, IRA, or a Roth. And yes many brokerages do offer these accounts.

>why do people post so much about dividend stocks?
I'm not sure, to be honest. I suspect they get mesmerized by the cash flow and lose track of what really matters: total return.

For me atleast, I collect about 4k a month after taxes from my dividends. I then take the dividends and gamble it on shitty options bets and penny stocks for fun.I have a habit of over-investing, and this gives me a set a mount to play around with.

Because part of investing is temperament and emotion, because we're fleshy meatsacks and suck. Dividends feel real to a lot of people, in a way that capital appreciation doesn't.

>for fun
So every four years you piss away $250,000, which is what those dividends would be worth if reinvested and compounded.

Sucks for you, but at least you're having fun.

anybody ever buy like 30 of these stocks and get a dividend payment every day of the month? :o Kinda want to do it just because

Works out ok for my situation.my options trade on AMD turned out very well. I'm sitting on another for micron, strike price of $13.00 with an expiration of january 2018. I'm 25 and don't have a very expensive lifestyle, so I can always change my trading habits later.

Yeah, cool story bro. It's always so impressive when retards say, "I don't care if I lose money 'cuz I'm young. YOLO."

Making money and having fun isn't allowed I guess. Sorry for not going for "MAXIMUM GAINZ"

Hey man, if that's the rationalization that helps you accept being a bad investor, then you do you booboo.

I am a bad investor, but as long as I'm turning a profit I'm happy. Sorry that offends you so much.

Wow, you're really defensive about this stuff, kid. All I did was make an observation that you, yourself, agree was accurate. Somehow that translates into me being offended or triggered? I think perhaps you're the one with unresolved issues, sport.

But please do keep posting the memes. Great stuff man.

>10,000 shares

Any anons that could afford 10,000 shares of these stocks wouldn't need to work in the first place.

Because they are certified retard.

They learn one thing and then think they are the grand wizard of shit stained black t-shirts.

How did you get the original money to buy the stocks that you are getting dividends from?

Who are you trying to prove that you are a "good investor" to? Nobody else in the world cares what type of investor you are. It only matters to you.

>Sport
>Kid

t. Triggered

Just dumb luck, knew a few guys who worked at tesla, decided to throw most of my savings into it during the IPO. I got out too early in 2013 around $180, but got lucky again since I threw it into palo alto networks which did pretty well the next few years

Living in the bay area and having alot of tech friends has certainly helped.

Hand over your earnings or I will report you for insider trading you white privileged scum.

>Nobody else in the world cares what type of investor you are.
Wow, do people really think like this? Do you seriously think your financial successes or failures have no effects beyond your tiny personal life?

Must be nice to be dumb and ignorant. Much less stress, I would imagine.

Sure chief, if that lets you sleep at night.

People that buy dividend stocks outside of tax sheltered accounts are some of the most financially uneducated people on this board

God, shut up fag

Slight correction to your math here, but when you sell Stock G, you'll also have to pay tax on whatever your gains were above the principal investment. For example, if you cashed out after year one, the return on investment for G after taxes is identical to Stock D, after year 2 it's ahead by a whopping 16 cents, about 51 cents by the end of year 3. Your point stands, but the spread growth is a bit smaller than you were implying

As an addendum to this, stock price is vulnerable to speculation, while dividends are more directly linked to the actual performance of the company, so the stability of a dividend-paying stock might be worth the marginally-smaller returns for more risk-averse investors.

O

I'll switch to dividend stocks when I'm near my retirement. It's nice to get income without selling your stocks. Plus, your dividends are qualified for long term capital gains tax rate. Right now I'm just focusing on growth so I invest in the entire market.

>Wow, do people really think like this? Do you seriously think your financial successes or failures have no effects beyond your tiny personal life?
Some people have different definition of success. Life isn't a rat race to make the most money.

>when you sell Stock G
True, although even then there are exceptions. There's no requirement that you sell your stocks, and therefore no mandatory time when that LTCG tax bill will necessarily come due. Die rich enough or die early enough and the IRS never gets its cut at all. Also, you could donate the appreciated shares, getting the full tax deduction but owing no taxes on the gain. And, it may also be the case (fairly commonly, I suspect) that your tax situation is more favorable in old age than during your prime earning years.

>stock price is vulnerable to speculation
By definition we're doing long-term apples-to-apples comparisons here. Short term swings, whether caused by speculation or anything else, are pretty much irrelevant.

Also, by definition, we're talking about two equal performing stocks (G and D). If you go an change the hypothetical to create some "perfect" Stock P that's better than either Stock G or D, then you should buy Stock P. But this is a teaching exercise, not an attempt at conveying stock tips.

>Life isn't a rat race to make the most money.
No, but I've yet to encounter a life goal yet that isn't made easier or acquired faster with more money. Money may not buy happiness, but it keeps away a lot of things that make people unhappy.

Which is kinda the same thing, in a way.

>People who have different investment goals are uneducated.

This board really is just a shill platform for pump and dumps. Can't get any decent advise these days.

Money does make life easier but that's a non-statement since it's obvious to everyone. What matters is that you have enough to do what you enjoy. You don't have to spend every second thinking about making more of it. If somebody wants to waste money on movies, games, sports, or gambling itt then so be it as long as he can sustain himself.

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Monero is the answer:
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I understand the comparison you were making, and do not necessarily disagree with what you were saying, but wanted to point out that there are valid reasons for investing in dividend stocks, so you don't need to come in here with your copypasta about how growth stocks are theoretically better long-term in a thread SPECIFICALLY about dividend stocks.

As to your talk about not selling the growth stock, or donating shares to avoid paying tax, that kind of defeats the purpose, as both of those activities are reducing the return on your investment, either through opportunity cost (you've effectively earned nothing on stocks you didn't sell, making it a 100% loss), or simply giving the money away.

>there are valid reasons for investing in dividend stocks
Of course there are. Nowhere in any of my posts did I suggested otherwise.

However, my point remains correct because most of the people on this board who meme dividend stocks aren't doing so for valid reasons. They're 20-year olds trying to supplement their wages, or they're perma-bears hedging their bets while trying to time the market. They make invalid assumptions about the the returns, volatility, and the beta of dividend stocks.

Look, if this was a mature forum with older folks planning their retirement spending needs, then we could have a very interesting discussion about the role of dividend stocks. But these are mostly NEETs looking for a get-rich-quick path to staying NEETs ... and dividend stocks are not the answer.

>as both of those activities are reducing the return on your investment, either through opportunity cost (you've effectively earned nothing on stocks you didn't sell, making it a 100% loss), or simply giving the money away
A tree grows whether you cut it down or not. A stock grows whether you sell it or not. Stop being stupid.

Also, I find it a bit sad that you dismiss charitable giving outright. Apparently you're neither mature enough nor sufficiently moral to feel that charitable donations are a valid use of your money. Perhaps you didn't know that 67% of all households and 98% of high net-worth households give to charities annually. Doing so in a tax-efficient manner hardly seems like it "defeats the purpose."

>You don't have to spend every second thinking about making more of it.
>If somebody wants to waste money on movies, games, sports, or gambling itt then so be it as long as he can sustain himself.
Those are non-statements since they're obvious to everyone.

The goal is making money, regardless of the platform used.

Dividend stocks are just flat out inefficient at the bottom line.

Let's say I'm making 20-30k/year as a single person from the US who doesn't live in the US. This means I DO NOT pay any capital gains tax (cutoff is 37k).

Are dividend stocks still bad in light of this?

20-30k/year from investments (stocks, bonds, etc.)*

This is my sole income.

This, I also own GM

>This is my sole income.
Why? Before giving advice about the asset allocations for your investments, we really need to address the fact that your bigger problem is the absence of any wages or salary.

Isn't letting your money do the work kind of the point?

>Isn't letting your money do the work kind of the point?
No, the point is to have a investment strategy that meets your goals and needs. Someone in their prime earning years with a good salary or wage shouldn't need to supplement their income from their investments, especially when doing so means they're stunting the growth of their capital and diminishing their retirement savings.

So its entirely relevant why doesn't have any other sources of income, especially considering that $20-30k/year isn't a very good standard of living in most civilized nations. Is he a retiree? Is he disabled? Is he a student? Is he a shut-in NEET? Is the absence of a steady income a temporary or permanent situation? Not to mention, because he lives outside the US, we don't know what the cost of living might be.

Giving financial advice when you don't know all the relevant facts is reckless and stupid. Making bland statements like "let your money do the work" shows that you only have an elementary grasp of finance. Every situation is more nuanced, and there are no one-size-fits-all strategies. That's why you'll see that nowhere in this thread did I say dividend stocks are "bad." What I did say is that they're horribly tax-inefficient (true), and that most people would be better served focusing on total return rather than putting all their eggs into a single asset class (true).

I worked for 12 years as a highly paid engineer and I am now retired and do not ever have to work again unless I want to

I do occasional consulting gigs if they're interesting, but I haven't worked a 9-5 in the last two years

Making bland statements like "let your money do the work" is actually just telling the truth about what everyone is trying to achieve eventually. Lot of famous and successful investors make similarly bland statements because they recognize that bland concepts and unexciting investments often times turn out to be the best investments. Keep talking in circles though it's a real contribution you're making.

>Those are non-statements since they're obvious to everyone.
It's clearly not obvious to you given your aggressive tone and the need to deride people. Chill out dude.

Kinda confused why cefl on RH has a much lower dividend than its listing on yahoo finance and ameritrade

>I am now retired and do not ever have to work again unless I want to
In your situation, yes dividend stocks can play an important role in your portfolio, notwithstanding their tax-inefficiency. Since you have no other sources of income, you'll want your investments to throw off enough cash for ordinary living expenses without having to to incur the incremental taxes of selling assets if possible. But since you're relatively young, you don't necessarily need the stability that comes from massively shifting to bonds. My recommendation would a mix of dividend stocks and bonds, assuming you can make the yields work.

Also understand that your situation is quite unique for this board. I suspect that you fled overseas to implement your extreme early retirement program, and I suspect you'll find its not as inexpensive to be an ex-pat as you think. Pray to god you never get sick, never experience economic or political turmoil in your third-world home, or that you never choose to repatriate.

>what everyone is trying to achieve eventually
Eventually is a long way off for most of this board. In order to get to that point, people need to be doing what's smart for them NOW, not what's smart for them in 30 years.

I'm sorry that you're feeling outclassed in this discussion and feel the need to be defensive. Maybe if you took that chip off your shoulder you'd learn something from people who know a lot more than you.

>missing the fact that I was quoting the platitude guy
Son, you can't waltz into the middle of a thread and start cherry-picking comments. Try reading more, and shitposting less.

Thanks for the advice!

>I suspect that you fled overseas to implement your extreme early retirement program
Yep

>I suspect you'll find its not as inexpensive to be an ex-pat as you think.
My cost of living is just under $1000/month. If I put only $60,000 of my money into one of these high dividend stocks (MORL, ORC, and so on), that'd completely cover my living expenses. Right now I have a split between Vanguard ETFs, bonds, and a few individual stocks in industries I know.

>Pray to god you never get sick
I pay $20/mo for the national health insurance program and any care is 100% free after that

>never experience economic or political turmoil in your third-world home
All my money is in the US, but political turmoil is a potential threat here

>or that you never choose to repatriate.
I could move back to Silicon Valley and get a job within a week, but I really hope it never comes to that.

It's nice how you outline all these mitigating factors and then assume everyone's got 30 more years before retirement. I also see you got blown the fuck out by that engineer who decided to retire early. You can stop at any time.

LAND

>Son, you can't waltz into the middle of a thread and start cherry-picking comments. Try reading more, and shitposting less.
You made a platitude yourself about money making life easier. Just pointing out your hypocrisy.

>I also see you got blown the fuck out by that engineer who decided to retire early.
Blown the fuck out? Hmm, let's see.

I pointed out the financial risks of serious illness. He cited some cheap third-world health plan. I assure you that if he had any serious condition, he would rather have American doctors and American hospitals, rather than whatever his third-world options might be. BTFO? No.

I cited political and financial risks. He acknowledged the political risks, and is also making the mistake of keeping him money in the US, subject to IRS jurisdiction. BTFO? No.

I cited the difficulty of repatriation. He says he could get a job. While that might or might not be true, if he does repatriate he's going to be massively behind his peers financially. He doesn't have enough savings to have a U.S. standard of living, and it would be unlikely that he could ever catch up. BTFO? No.

I get that you're triggered and butthurt. Your posts reek of desperation for attention and validation from me, since you apparently recognize that I'm significantly smarter than you. But I'm sorry, that's not going to happen. You're an idiot, and I'm not going to coddle or pamper you, kid. If you want a safespace, head elsewhere.

>You made a platitude yourself about money making life easier.
I responded to a platitude and expounded on the aspects of it that are and are not true. Your reading comprehension is shit. Again, you'll get no validation from me, retard, no matter how many times you beg for my attention.

Dividend stocks are for dumb goys who want to give more money to the government than necessary. Investing in companies who choose to reinvest their profits instead of paying out dividends will always be the smarter choice.

>I responded to a platitude and expounded on the aspects of it that are and are not true.
No you did not expound on it because not everyone is out to get mad gains or live like a hermit to rack a high score. Sorry that not everyone is obsessed with money.

...

so what's a good alternative to any of the dividend stocks mentioned in this thread?

>I think it's a good idea for companies to funnel their earnings into assets with lower returns than their cost of capital and dilute shareholder value because I think dividends are greedy

VTSAX

okay

The only reason why people invest in passive income stocks is because they don't know how to invest. There is a fundamental problem with dividend stocks, which is the double-taxation of your investment.

When dividend-paying companies earn a profit, they pay taxes on that profit to the government. Then they take the remainder...and give it out to shareholders, which is again taxed.

Non-dividend paying equities will always outshine those that pay out, when comparing companies in the same sector. You're not "earning" anything from dividends, you are just reducing your potential gain.

Re-investing dividends is equally stupid, because you're taxed on it, and give it back to the company. Why not let them keep it in the first place with a non-dividend paying company until you're ready to cash out.

Out of interest, where do you reside?

MGC, nigga