Author Topic: How much in dividends do you make a month?  (Read 22735 times)

starguru

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Re: How much in dividends do you make a month?
« Reply #100 on: August 16, 2016, 08:11:27 AM »
We have about \$850k in FSTVX and \$250k in various international indexes.  Assuming Im getting about 2% in dividend payments a year, thats 1.1*.02= 22k a year.  Of course, I think most of that is being automatically reinvested.

seattlecyclone

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Re: How much in dividends do you make a month?
« Reply #101 on: August 16, 2016, 03:50:40 PM »
One thing to keep in mind is that if the market spits out 2% dividends every year, the dollar amount will change as that 2% is calculated from the value of the market.

A \$1M portfolio yielding 2% would give you \$20k. But if the market drops 50%, even if dividends go up 50% to 3% yield, you're only going to get \$15k in dividends.

This is actually backwards. A Company's Board of Directors declare dividends on a dollar amount per share which is then converted to a percentage of the stock price before the information gets to the end user through a source like Yahoo Finance. So if the stock priced dropped 50% the dividend would go from 2% to 4% of the stock price. This is assuming the Board of Directors does not declare a smaller dividend per share in the future. Typically Companies do not like to decrease their dividend unless it is absolutely needed as investors view this action negatively.

They're saying if the dividends stay at a relatively constant 2%, the amount you will receive will vary with the stock price. Yes, we know that companies set their dividends to a set dollar amount. However, when you look back at an event like the 2008 crash, lots of companies cut their dividends. You can see that the dividend yield briefly shot up to 3% for 2008, but reverted to the mean next year as companies reduced their dividends in accordance with their current business outlook (which was also reflected in their stock price, just faster).

Heckler

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Re: How much in dividends do you make a month?
« Reply #102 on: August 16, 2016, 03:57:30 PM »
Average annual distributions estimated at \$7822.   So \$651/month.  We have ~\$2500/month expenses so we are 1/5 of the way there for it to last forever, although catching up quickly now that we are mortgage free.

seattlecyclone

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Re: How much in dividends do you make a month?
« Reply #103 on: August 16, 2016, 05:14:57 PM »

I also prepared a graph of dividends in dollars adjusted for consistent inflation of 3.22 (assumption made for simplicity) which shows dividends in dollars are fairly consistent on an upward trend, not dividend yield which varies widely.

This is a really bad assumption. Inflation rates have varied quite widely during the historical period you're graphing. I suspect the graph would look markedly different if you used the actual inflation rates.

bigchrisb

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Re: How much in dividends do you make a month?
« Reply #104 on: August 16, 2016, 09:57:58 PM »
Thanks a lot Bigchrisb. I have copied your discussion earlier regarding your distribution of various shares/ETFs in low tax or high tax settings. It goes in my file of financial wisdom.

Do you have a SMSF or have you found an APRA fund which allows direct investment in shares/ETFs? I spent weeks looking but have finally settled on sun super which allows 100% investment but not more than 50% in a single share ETF. If we were staying in oz forever we would have a smsf but we cannot run it from overseas. So would have to roll it over into an APRA fund and thus incur capital gains tax. I guess I was surprised with that return in the last financial year where everyone else I know has got 3% or less.
I am too scared to invest much money in REITs with all the doomsayers about bubbles etc.

I'll send you a PM.  Its probably a bit off topic for this thread.

mizzourah2006

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Re: How much in dividends do you make a month?
« Reply #105 on: August 17, 2016, 09:43:35 AM »
exactly . as i mentioned earlier ;

dividends have increased to the highest levels since 1998 with a record increase of 17.8 billion dollars in increased dividends payed out just 1st quarter. the 2nd quarter may be even bigger.

all dow stocks pay dividends and 84% of the s&p 500 does too.

but according to a study done by howard silverblatt at s&p those dividends have been coming at a price as they go up and up..

a good part of that capital from free cash flow is gone forever and no longer available for compounding.

mid-caps and small caps who pay little in dividends have been far and away providing far better compounding and use of investor money for much greater returns..

in fact one of the least efficient ways to grow investor money now is paying it out as a dividend.

as chuck akre said ,free cash flow in a company can be used to compound by buying back its own stock, investing in its own company or buying other companies . cash flow paid out as dividends loses its compounding ability and much of it is gone forever and can no longer compound.

many of the great companies in the s&p 500 have lagged behind their non dividend payers in the midcap and small cap markets who now seem to be much more efficient at generating compounding on investor money.

midcaps and small caps have compounded the last couple of  years at rate of 5-6% higher then their dividend paying cousins with few exceptions ..

This analysis really focuses on the dividends as the cause for higher or lower returns; dividends are really only a indicator of the stage of the company which is the cause of the pattern of returns. Companies that are growing typically don't pay out dividends as they are reinvesting there capital. Because your return with these companies is highly correlated with there ability to grow they out perform the market during good times and under perform the market during bad times and are more volatile then the market as a whole.

Large companies that pay a dividend are in a mature stage where the returns an investor receives are based more on the income produce by the entity rather than growth of the company. This produces a lower return to the investor on average but also has lower volatility.

A dividend strategy thus has a lower than market expected return but also lower than market expected volatility.

On a side note; DIVIDENDS ARE NOT THE SAME AS UNREALIZED CAPITAL APPRECIATION!
I agree as a practical note that an investor should focus on total return as apposed to dividends or capital appreciation. However, dividends are different then capital appreciation. These are viewed differently by the IRS, SEC, and GAAP. It is a theory that they result in the same net worth for an investor ignoring taxes; but it is practically impossible to view in the real world as the market price varies. On a practical note they affect the ownership of the company differently. If I own several shares of Target and sell several shares Target has the exact same market capitalization but I own a smaller piece of it as I sold some of my ownership to another investor(Transaction between another investor and me). If Target pays a dividend my ownership % stays the same but the value of what I own decreases(Transaction between Target and me).

What!?!?!?! Someone that actually understands value investing and that returns are more than a function of a ticker symbol growing. Seems to be an anomaly in these parts. Your post will most certainly be ignored, but I wanted to give you kudos.

sisto

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Re: How much in dividends do you make a month?
« Reply #106 on: August 17, 2016, 01:05:31 PM »
Is there an easy way to find this information out?  I'm curious how much my portfolio produces in dividends per month/quarter/year.  I have all of my investment accounts tracked inside of Personal Capital but it doesn't seem to tell me the total yield of my portfolio.

A rough guesstimate would be that the average dividend on all my investments is around 2.5%, which would be ~\$1,562/month.

I use Mint and it doesn't show taxable account investment dividends, but maybe that's because mine are set to reinvest instead of deposit into a money market account.

To view dividends, I have to login to Vanguard and check the Dividend & Capital Gains tab. Maybe someone knows an easier way?
You can actually get this data from Mint. You just need to click on investments and transactions.

ender

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Re: How much in dividends do you make a month?
« Reply #107 on: August 17, 2016, 01:25:15 PM »
One thing to keep in mind is that if the market spits out 2% dividends every year, the dollar amount will change as that 2% is calculated from the value of the market.

A \$1M portfolio yielding 2% would give you \$20k. But if the market drops 50%, even if dividends go up 50% to 3% yield, you're only going to get \$15k in dividends.

This is actually backwards. A Company's Board of Directors declare dividends on a dollar amount per share which is then converted to a percentage of the stock price before the information gets to the end user through a source like Yahoo Finance. So if the stock priced dropped 50% the dividend would go from 2% to 4% of the stock price. This is assuming the Board of Directors does not declare a smaller dividend per share in the future. Typically Companies do not like to decrease their dividend unless it is absolutely needed as investors view this action negatively.

They're saying if the dividends stay at a relatively constant 2%, the amount you will receive will vary with the stock price. Yes, we know that companies set their dividends to a set dollar amount. However, when you look back at an event like the 2008 crash, lots of companies cut their dividends. You can see that the dividend yield briefly shot up to 3% for 2008, but reverted to the mean next year as companies reduced their dividends in accordance with their current business outlook (which was also reflected in their stock price, just faster).

+1

Also this is counterintuitive. It seems likely that what Virtus is saying would be true, but data (such as both you and I linked) suggests it is not.

TheAnonOne

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Re: How much in dividends do you make a month?
« Reply #108 on: August 17, 2016, 02:40:58 PM »
Currently only own VTSAX... yield is around 2%

\$225,000 * .02 = \$4,500 yearly.

So... \$375 a month, not too bad...

Scandium

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Re: How much in dividends do you make a month?
« Reply #109 on: August 17, 2016, 09:03:37 PM »
Is there an easy way to find this information out?  I'm curious how much my portfolio produces in dividends per month/quarter/year.  I have all of my investment accounts tracked inside of Personal Capital but it doesn't seem to tell me the total yield of my portfolio.

A rough guesstimate would be that the average dividend on all my investments is around 2.5%, which would be ~\$1,562/month.
Sigfig.com is free and show dividends per quarter I believe. No idea how accurate it is tough since I don't care a whole lot

Something like this (google images, not mine):

Sent from my Nexus 5X using Tapatalk

« Last Edit: August 18, 2016, 10:36:44 AM by Scandium »