Author Topic: How much in dividends do you make a month?  (Read 19732 times)

mathjak107

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Re: How much in dividends do you make a month?
« Reply #50 on: August 06, 2016, 11:24:06 AM »
nope . market action still only compounds  on the opening balance .

if you had a 100k in stock and it paid a 5% dividend you will have 95k at the opening bell working for you and 5k in pocket .

if that 95k at the opening bell grows by 4% because of market action regardless over what time frame   you have 98,800

if you reinvested that 5k you would have the same 100k compounding and would have 104k  .

the 100,000 dollar portfolio with no dividend resets  would be 104,000 if it grew by the same 4% .   
 

money does not just materialize out of the air . equal total returns always yield similar results
« Last Edit: August 06, 2016, 11:28:33 AM by mathjak107 »

mathjak107

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Re: How much in dividends do you make a month?
« Reply #51 on: August 06, 2016, 11:25:44 AM »
regardless it is the same thing .

the starting point will always be the compounding on the opening balance and the opening balance will be the same as you had the night before  if you reinvest the dividend or less if you don't .

it can't happen any other way . you may get a little variance if you reinvest but basically if you don't and you take the div then this is exactly what happens .
« Last Edit: August 06, 2016, 11:31:02 AM by mathjak107 »

mrpercentage

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Re: How much in dividends do you make a month?
« Reply #52 on: August 06, 2016, 11:30:57 AM »
nope . market action still only compounds over the quarter on the opening balance .

if you had a 100k in stock and it paid a 5% dividend you will have 95k at the opening bell working for you and 5k in pocket .

if that 95k at the opening bell grows by 4% because of market action  that end of the  next quarter  you have 98,800

if you reinvested that 5k you would have the same 100k compounding and would have 104k  .

the 100,000 dollar portfolio with no dividend resets  would be 104,000 if it grew by the same 4% .   
 

you can pull the 5k from that portfolio  and be

You are getting stuck on this.

Compounding is measurable growth over time and is not dependent on any one point other than interest over time.

You can say that my car is worth ten thousand but when I don't sell to you because I believe it's worth ten thousand five hundred--- you will still have to pay ten thousand five hundred to get it.

Now if you jump in the stock and want to jump out right after they distribute then you will sell at that lower price. Nobody else is doing that so the sellers are still selling at the original price bring the price back to where it belongs. See how reality, not theory, works?

mathjak107

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Re: How much in dividends do you make a month?
« Reply #53 on: August 06, 2016, 11:36:52 AM »
you do not grow money out of the air .

if your investment is 100k  there is no disputing you only have 95k left invested at the ring of the bell once exchange computers reset you .

you have the other 5k in pocket , if you spend it , that money is no longer there . what ever markets do from the ring of the bell  is on your 95k  . this is not hard to follow , it is a pretty straight forward concept yet so many do not understand the math that happens.
had that opening balance not paid a dividend that action would have been on 100k  not 95k  . at days end your investment would have been worth more based on 100k as a starting point  instead of the   95k after the reset  .

think about this very carefully .
« Last Edit: August 06, 2016, 11:44:52 AM by mathjak107 »

mrpercentage

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Re: How much in dividends do you make a month?
« Reply #54 on: August 06, 2016, 11:45:48 AM »
you do not grow money out of the air .

if your investment is 100k  there is no disputing you only have 95k left invested at the ring of the bell once exchange computers reset you .

you have the other 5k in pocket , if you spend it , that money is no longer there . what ever markets do from the ring of the bell  is on your 95k  . this is not hard to follow , it is a pretty straight forward concept yet so many do not understand the math that happens.
had that opening balance not paid a dividend that action would have been on 100k .

You are still stuck. Understand this:

The stock price is what people are willing to pay or sell it for. The exchange can artificially set the price but it can't make anyone sell it for that. There is probably someone willing to buy it for a price artifically set lower.

Divined come from a companies earnings. Not attached to the share equity at all. The dividends come from the companies actual cash not stock demand. The two are not directly related but are often correlated because people like buying companies that earn lots of cash.

I'm sorry but I'm going back to the olympics. Investopedia dividends for further debate

« Last Edit: August 06, 2016, 11:48:13 AM by mrpercentage »

mathjak107

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Re: How much in dividends do you make a month?
« Reply #55 on: August 06, 2016, 11:49:11 AM »
market action has nothing to do with the starting balance you have . you are confusing yourself . the market action is the market action  over any given period of time .

but that compounding is applied on top of a starting value .

companys pay dividends even when they lose money . the dividend is just an amount the board votes on and approves .

if you suck money out of the company exchange laws say you have to reduce the share price by dropping all offers by the same amount . all prices are adjusted downward so your 100k is now 95k invested and 5k in pocket  to reflect the fact that money is gone .

it is very simple , you now have only 95k invested regardless what markets do on it . you are confusing the amount you have invested vs the market action compounding on that amount .  all market action is plus or minus a percentage up or down on your balance ..

it could be a day , an hour or a year . compounding is all on your opening amount .
« Last Edit: August 06, 2016, 11:55:02 AM by mathjak107 »

mathjak107

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Re: How much in dividends do you make a month?
« Reply #56 on: August 06, 2016, 11:57:32 AM »
motley fool explains it well

Why the ex-dividend date for stocks matters
When a company pays a dividend, the market may account for that dividend in the days preceding the ex-div date by a rise in the price of the stock. This is because buyers are willing to pay a premium to receive the dividend. However, on the ex-div date, the exchange automatically reduces the price of the stock by the amount of the dividend. If the dividend is $1, and the stock had been offered at $40 and bid at $39.50 the day before, on the ex-div date the offer price and bid price will be adjusted to $39 and the bid to $38.50 to account for the fact that the dividend is not included. When this happens, the stock is said to have gone ex-dividend and is often marked with an "x" in the quote systems and newspaper stock price listings.

Most exchanges also adjust limit orders to account for the stock price going ex-dividend. If you have an order to buy stock at $39, it will be adjusted to be an order to buy at $38 to account for the fact that you had placed the order to buy when it would have included the dividend. Adjusting the limit price prevents the accidental triggering of the order when the stock price is changed on the ex-div date.

mathjak107

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Re: How much in dividends do you make a month?
« Reply #57 on: August 06, 2016, 11:59:42 AM »
so you see how your 100k you had in stock becomes 95k once the div is paid out .

now all market compounding percentage wise up or down is on 95k not 100k ..  got it?  which is more ?    if the stock rose 4% in trading ;  95k going up 4% or 100k going up 4% ?

that is why a portfolio with no dividends that goes up the same 4% and has 5% drawn off will be no different then your 5% dividend . same total returns will give similar results
« Last Edit: August 06, 2016, 12:06:05 PM by mathjak107 »

mrpercentage

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Re: How much in dividends do you make a month?
« Reply #58 on: August 06, 2016, 12:04:27 PM »
I give up. Believe what you want to. Numbers are a discription of reality-- not THE reality. Growth funds, Google, Amazon, Netflix, and Salesforce sound right for you. Too-da-loo

mathjak107

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Re: How much in dividends do you make a month?
« Reply #59 on: August 06, 2016, 12:08:28 PM »
it is just simple math .

it can't work any other way .

if i have a 100k in non dividend payers and my portfolio is up  6% as an example i can pull  the same dollars out  as your dividend and have the same balance as your stock  if it has the same  6% total  return consisting of a 2% dividend and 4% appreciation .

a 6% total return is a 6% total return regardless if it is all appreciation or appreciation and dividend . the draw does not care how the total return is made up .

this is an important concept to understand . it is also why reinvesting dividends in down markets is neutral . you get no added benefit from lower prices like you do when adding new money or rebalancing .

the value of the investment is the same both before and after reinvesting  so the dollars compounded on by the markets are the same as you had .

new money or rebalancing changes the value compounded on  so that benefits when markets fall .
« Last Edit: August 06, 2016, 12:32:23 PM by mathjak107 »

mathjak107

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Re: How much in dividends do you make a month?
« Reply #60 on: August 06, 2016, 12:23:50 PM »
some arbitrators like to play a little game where  they buy before the dividend and they hope after the reset back in price  the markets over do the upside going up more then they typically would under the same market demand . so they hope to capture a little piece more of the dividend .

study's show that playing the dividend recapture game is about as reliable as a coin toss . investors lose as many times as they gain from arbitraging . certainly nothing i would ever want to do .

if that was the case we would not own the stock . we would buy right before the payout and sell right after and keep the free money .

mrpercentage

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Re: How much in dividends do you make a month?
« Reply #61 on: August 06, 2016, 12:41:40 PM »
Oh for Gods sake. The exchange doesn't get to determine the price the traders do. The exchange gets to set up rules to discourage malicious trading and they do. Dividends and share price are not related. Your little numbers do not change the precieved value of a company to traders. Dividends come from a companies actual cash and the drop from distribution comes from rules intended to curb malicious trading. I get elementary math. I also get the process it's trying to describe. Math is only a precisely measured discription of a process. You think the math is the process and you are wrong. I have looked through a telescope and never discovered a number 1 floating around in space.

You know there was a perfect earth centered universe model that would predict exactly what the planets would do. It was right on prediction. It was wrong on what actually was. The wrong assumptions are in your model

mathjak107

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Re: How much in dividends do you make a month?
« Reply #62 on: August 06, 2016, 01:01:53 PM »
do  you know what you are talking about ? the exchanges do not set the price , they  take the opening prices and reduce your investment value by the same amount paid out  . they don't set the price but they do take the price from the last close and reduce it  at the open so it has a new reduced value  along with the dollars you have invested in it .

you do know the difference between setting the opening price and  reducing the markets already established price i hope .  by resetting the markets price they reestablish the opening prices .

i don't know why you argue this . this is nothing new . your investment is always worth less starting out  after the dividend  then it would have been with the dividend reinvested  if you keep the dividend and do not reinvest it . that diofference starting out is the amount of the dividend and your balance will always reflect that fact . .

if you believe it works any other way  then just keep believing the wrong thing and arguing .  but i am done here with this .
« Last Edit: August 06, 2016, 01:11:13 PM by mathjak107 »

mrpercentage

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Re: How much in dividends do you make a month?
« Reply #63 on: August 06, 2016, 01:10:50 PM »
Dividends come from the share price: true or false?
« Last Edit: August 06, 2016, 01:14:44 PM by mrpercentage »

mathjak107

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Re: How much in dividends do you make a month?
« Reply #64 on: August 06, 2016, 01:14:20 PM »
dividends come from the company bank accounts and are part of the company value .  once they are paid out they are subtracted off your share price . if you had a 100k in the investment and got 5% you got a 95k investment left and 5k in your pocket .

the company is worth that much less now and the exchange computers reflect that fact .

what investors think the company is worth after that  is going to be decided  by market action how much up or down in value they bid that stock . what ever percentage it goes up will be applied to your 95k left .

mrpercentage

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Re: How much in dividends do you make a month?
« Reply #65 on: August 06, 2016, 01:15:14 PM »

mathjak107

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Re: How much in dividends do you make a month?
« Reply #66 on: August 06, 2016, 01:16:23 PM »
there is more to that . look up ex div date for the rest of the story  or just read the simple explanation i posted from motley fool .

what you posted is correct . declaring a dividend has no effect on the share price . but going  ex div sure does .
« Last Edit: August 06, 2016, 01:21:05 PM by mathjak107 »

mathjak107

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Re: How much in dividends do you make a month?
« Reply #67 on: August 06, 2016, 01:18:48 PM »
here let me get that from the source you posted : INVESTOPEDIA


Ex-Dividend
     
 

What is an 'Ex-Dividend'
Ex-dividend is a classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be given ex-dividend status if a person has been confirmed by the company to receive the dividend payment.

A stock trades ex-dividend on or after the ex-dividend date (ex-date). At this point, the person who owns the security on the ex-dividend date will be awarded the payment, regardless of who currently holds the stock. After the ex-date has been declared, the stock will usually drop in price by the amount of the expected dividend.


Read more: Ex-Dividend Definition | Investopedia http://www.investopedia.com/terms/e/ex-dividend.asp#ixzz4Ga71c11v
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mrpercentage

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Re: How much in dividends do you make a month?
« Reply #68 on: August 06, 2016, 01:20:13 PM »
You think 95 is left. You are wrong. That is a suggestion by the exchange. If you choose to sell someone might buy it. But most will not and the price will go to where the sellers actually accept. The exchange opening doesn't decide that. The traders do. Your opening number is not an accurate discription of the real demand in the market. The price will go to the real demand-- not related to an artificial opening number. AKA it didn't lose value because of a distribution

mathjak107

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Re: How much in dividends do you make a month?
« Reply #69 on: August 06, 2016, 01:22:38 PM »
of course investors act on the price  but if the stock rises 4% that day it rises 4%  from the lower opening price . that lower opening price reflects the fact you now have 95k as a starting point and not 100k .

the days action gave you a  4% gain based   on the lower opening price and value of 95k . if it wasn't for the reset the 4% rise would have given you 4% on 100k and the closing price would have been 5% higher . your investment at the end of the day with a 4% gain is worth 5% less then had it not paid a div and was based on the higher opening  price .
« Last Edit: August 06, 2016, 01:27:45 PM by mathjak107 »

mrpercentage

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Re: How much in dividends do you make a month?
« Reply #70 on: August 06, 2016, 01:26:33 PM »
here let me get that from the source you posted : INVESTOPEDIA


Ex-Dividend
     
 

What is an 'Ex-Dividend'
Ex-dividend is a classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be given ex-dividend status if a person has been confirmed by the company to receive the dividend payment.

A stock trades ex-dividend on or after the ex-dividend date (ex-date). At this point, the person who owns the security on the ex-dividend date will be awarded the payment, regardless of who currently holds the stock. After the ex-date has been declared, the stock will usually drop in price by the amount of the expected dividend.


Read more: Ex-Dividend Definition | Investopedia http://www.investopedia.com/terms/e/ex-dividend.asp#ixzz4Ga71c11v
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There is nothing absolute I that (about that) statement. Traders determine the actual price and when no one sells it will go back up. End of story
« Last Edit: August 06, 2016, 05:12:55 PM by mrpercentage »

mathjak107

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Re: How much in dividends do you make a month?
« Reply #71 on: August 06, 2016, 01:28:15 PM »
then we just have to agree to disagree , the math is what it is . you do see why your posting from investopedia was incomplete i hope . declaration of dividend is different then when a stock goes ex-div .

ex div means all gains or losses percentage wise stated for the day   are on a lower opening value . you either are starting out with the same dollars as the night before if you reinvest or you are starting out with less dollars then the night before  if you don't .

none of the above has anything to do with where markets take your starting balance  that day in dollars  . it will always be greater if you were not reset back  or reinvested the money back in then if you pocket the dividend , for any given percentage up or down .

your dollars invested for a 10 buck stock going up 4% in a day will always be at a higher price  then a stock starting at 9.50 and going up 4% for the day .

all future appreciation will be better on the higher price 

« Last Edit: August 06, 2016, 01:49:48 PM by mathjak107 »

Roland of Gilead

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Re: How much in dividends do you make a month?
« Reply #72 on: August 06, 2016, 03:12:24 PM »
dividends come from the company bank accounts and are part of the company value .  once they are paid out they are subtracted off your share price . if you had a 100k in the investment and got 5% you got a 95k investment left and 5k in your pocket .

the company is worth that much less now and the exchange computers reflect that fact .

what investors think the company is worth after that  is going to be decided  by market action how much up or down in value they bid that stock . what ever percentage it goes up will be applied to your 95k left .

But company cash is not valued the same as normal cash.  A few years ago I was posting about Gencore, who had 95mil in cash, no debt, and positive earnings, but were trading at a market cap of $80mil.

How do you explain that?
« Last Edit: August 06, 2016, 03:13:56 PM by Roland of Gilead »

mathjak107

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Re: How much in dividends do you make a month?
« Reply #73 on: August 06, 2016, 06:38:12 PM »
irrelevant . whatever the payout is the exchange rules  say the share price has to be dropped by the amount paid out as a starting point . all  bids are lowered from what they were entered as  automatically

mrpercentage

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Re: How much in dividends do you make a month?
« Reply #74 on: August 06, 2016, 06:56:45 PM »
Can you say limit orders? Not to mention no one has to do anything.

The point is: price at any given time is not necessarily the value. So the value of a company doesn't change due to a temporary opening price. The market is still only going to sell it for what they deem worthy. Sure there might be a few market sell orders out there but not a never ending pool of them. As soon as those market sells are gone the price is right where it was. Demand value-- not opening price.

and did you see that guy break his leg on the vault... F&@#!!!

Roland of Gilead

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Re: How much in dividends do you make a month?
« Reply #75 on: August 06, 2016, 07:02:30 PM »
irrelevant . whatever the payout is the exchange rules  say the share price has to be dropped by the amount paid out as a starting point . all  bids are lowered from what they were entered as  automatically

That is meaningless.  The stock will follow the news and trend.  I rarely have seen a stock trade ex div for the exact difference longer than a few seconds.  Quite often I have seen stocks climb higher ex div than they were.

waltworks

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Re: How much in dividends do you make a month?
« Reply #76 on: August 06, 2016, 09:22:52 PM »
This has been discussed a billion times, jeez.

Dividends aren't free money. As long as you're not stock picking, though, going for some kind of dividend-focused index fund won't hurt you enough to matter, so by all means go for it if you sleep better at night.

Your total return is what matters in the end, and determines what you have to live on if you're retired. It doesn't matter if it's all capital appreciation, or all dividends. The end result is the same, and it doesn't matter if you "dip into the principle" if that principle is growing faster than you're dipping.

-W

mathjak107

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Re: How much in dividends do you make a month?
« Reply #77 on: August 07, 2016, 02:50:31 AM »
yep , you get it ....
this has to be one of the most mis-understood areas of investing and it is such a simple concept . it is just about compounding of gains on your total dollars .

dividends give you nothing in dollars you didn't already have the night before you received them stored in the stock price . .


actually study's have found that depending on tax situation you can do slightly better just reinvesting the dividends  and spending equal amounts from cash and bonds which have less  growth potential  in your portfolio  , while leaving the reinvested dividends to maintain the same level of investment in the equity's .

that creates a bit of a rising glide path where cash and bonds are reducing while equity allocation is growing .

this goes back to what i said before some one yelled wrong . you can create your  own dividend equivalent merely selling the same dollars from your portfolio . it is all the same for the most part .  all you need is the same total returns and things will be pretty close to equal .
« Last Edit: August 07, 2016, 03:32:09 AM by mathjak107 »

Greenpez

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Re: How much in dividends do you make a month?
« Reply #78 on: August 07, 2016, 07:06:12 AM »
 It is fun watching two people argue two different points though.

mathjak107

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Re: How much in dividends do you make a month?
« Reply #79 on: August 07, 2016, 07:32:12 AM »
that is how we all learn.

through the years i have learned the biggest obstacle to being successful is believing your own bull-sh*t and not sleeping with the enemy .

most folks tend to hang out with ,read , support  and hi five only those who support their own views .

so they only learn the other side from those who support their own view .

but when you sleep with the enemy and really learn their side you can learn things that you never knew , or even find that your view was flawed .

my opinions on so many things have changed once i switched hats . opinions on things like annuity's ,whole life , roth vs traditional , delaying ss are just some of the things where today i have different views on them as opposed to before i really learned the ins and outs .

boarder42

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Re: How much in dividends do you make a month?
« Reply #80 on: August 07, 2016, 08:13:39 AM »
Mathjak you're arguing with a guy who made a post about the market crashing in may " bc it always happens" and " the market is overvalued". You can't win with him. And this stance he's taking is much more ambiguous than his market collapsing stance which I made tens of thousands on during the run up.

Perfect path to extra working years  trying to time markets and chasing a dividend. If he isn't in the pay off your house side of the camp for a perfect trifecta of inefficient investin ideas I'd be surprised

boarder42

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Re: How much in dividends do you make a month?
« Reply #81 on: August 07, 2016, 08:17:03 AM »
that is how we all learn.

through the years i have learned the biggest obstacle to being successful is believing your own bull-sh*t and not sleeping with the enemy .

most folks tend to hang out with ,read , support  and hi five only those who support their own views .

so they only learn the other side from those who support their own view .


Yep why I love this place. But when math is involved one stance quickly becomes inferior. I used to be a pay off my house faster guy but numbers spoke for themselves. Now I'm completely annoyed by people pissing money and increasing risk by paying it down.

Disclaimer I never paid more than my mortgage just refi to decrease length. But still worse

mathjak107

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Re: How much in dividends do you make a month?
« Reply #82 on: August 07, 2016, 08:29:42 AM »
i am pretty far away  from living  the mmm way of life . but so far i do enjoy the discussions and the group here .

as far as paying off the house , tell me which side you want me to argue .  i can argue equally strong on both sides . but i hate to hijack the thread .
« Last Edit: August 07, 2016, 08:31:56 AM by mathjak107 »

boarder42

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Re: How much in dividends do you make a month?
« Reply #83 on: August 07, 2016, 08:33:57 AM »
i am pretty far away  from living  the mmm way of life . but so far i do enjoy the discussions and the group here .

as far as paying off the house , tell me which side you want me to argue .  i can argue equally strong on both sides . but i hate to hijack the thread .

We are as well but I wouldn't waste my words on mr percentage as stated above and it's also quite impossible to argue both sides if you plan to live on a 4% or some similar rule.

mathjak107

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Re: How much in dividends do you make a month?
« Reply #84 on: August 07, 2016, 08:55:00 AM »
there are definitely pro's and cons .  the problem with most american's is they suck at investing . morningstar's investor returns vs the funds returns show poor investor behavior is a major problem .

we get blinded by that fact when we are in financial forums where folks make investing a hobby or interest .

so most American' s even if they had the discipline to actually invest the money they did not tie up in the house ,  which is another problem , they  still may not actually beat the risk free return of the mortgage even though they should have  .

while they certainly could have done better leaving the house as is and investing elsewhere , left to their own devices many will fail at it . so the paid off house can be a 2nd place prize for them .

i actually sold our homes , rented and invested elsewhere and we did very well . in fact we could not have done the deals we did if the money was still tied up in the house .

 today those investments can buy multiple homes like we had even after subtracting out 15 years of rent .

but today we are interested again in buying a co-op to live in next year .  i am no longer the aggressive investor i was , i don't have to be and cutting costs down the road as well as cutting dependency on markets  is my focus .

remember , if you are retired and drawing down from your portfolio ,  any increase in expenses like having a mortgage vs not , increases  sequence risk . so unlike when you are  not spending down you just need to invest and beat an average return , now you have the added factor of not only beating that average return but it has to be in the right sequence of gains and losses .

so now you have two parameters that have to go right , not just one .

for us , the  catch 22 is that by delaying social security , even though we have multiple 7 figures in investments the banks we tried said it is a toss up as to whether we will be approved because they sell the mortgages and the guidelines about the constitution of the income stream is very strict .

so we may have to end up paying cash . if we do we cut 6k a year in expenses compared to our renting now . but conservatively we will give up 12k  income on the money we will use . so  a side from the much nicer living situation in the co-op with all the amenity's we are hoping that the rents will eventually eclipse the co-op maintenance and the appreciation will put us ahead .

in either case our draw will still hold below 4%  with or without a mortgage .

we still own investment co-ops and as an example back in 1987 we rented it out for 850 a month and maintenance was 475 .

well today it gets 1800 a month to rent and maintenance is only 600 . so there is a big savings there .

my ex wife is living there now and for only 600 a month she has an 1800 dollar a month apartment .

so we are hoping our housing costs will escalate less over time owning instead of renting .

if we can get the mortgage i rather do it  that way .

when it comes to this stuff everyone's own unique situation will be very different .



« Last Edit: August 07, 2016, 09:28:51 AM by mathjak107 »

mathjak107

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Re: How much in dividends do you make a month?
« Reply #85 on: August 07, 2016, 09:13:58 AM »
one last point is we are all very different when it comes to debt and or investing .

i was always very goal oriented . if one of my goals was to have a paid off house , then when i finally accumulated that money i paid off the house .  that money was very aggressively invested up to that point .

but once i had the money , what i did not do is put the old carrot on a stick and leave that money in the risk pool .

nope , that money met its goal and off it went to fulfill that goal .

the rest of the money that had not met its goal was still pedal to the metal  as i tried to grow it .

so that is why i say  everyone is different in what they want , their goals , ability , resources  and their  pucker factor always  play a big part . .

you can't rule all that out and only look at a dollars and cents calculation .
« Last Edit: August 07, 2016, 09:16:06 AM by mathjak107 »

ender

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Re: How much in dividends do you make a month?
« Reply #86 on: August 07, 2016, 12:41:03 PM »
Quote
How much in dividends do you make a month?

Not enough.... yet.

mrpercentage

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Re: How much in dividends do you make a month?
« Reply #87 on: August 07, 2016, 12:49:03 PM »
Mathjak you're arguing with a guy who made a post about the market crashing in may " bc it always happens" and " the market is overvalued". You can't win with him. And this stance he's taking is much more ambiguous than his market collapsing stance which I made tens of thousands on during the run up.

Perfect path to extra working years  trying to time markets and chasing a dividend. If he isn't in the pay off your house side of the camp for a perfect trifecta of inefficient investin ideas I'd be surprised

What exactly does this have to do with a dividend? Jack shit.

You are something trolling forums to learn how to index when a monkey could do that. Frugal and investing doesn't always mean index. I guess I should ignore the tech bubble, ignore the great recession, and ignore it when the most renowned bond investor says HE DOESN'T LIKE BONDS. There an inherent risk with investing. Anyone who tells you otherwise is a liar. I told you from the get go (even though it was a different thread/different subject/that shouldn't highjack every thread), I told you I might miss out on gains going to cash in my 457. I told you that I had a huge lump some coming. But, missing out on gains is not the same a losing money. A bird in the hand is worth two in the bush. If you are so damn confident leverage your whole account because if you don't and stocks go up you lost so much money.

ender

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Re: How much in dividends do you make a month?
« Reply #88 on: August 07, 2016, 12:55:50 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.


mrpercentage

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Re: How much in dividends do you make a month?
« Reply #89 on: August 07, 2016, 01:08:07 PM »
Are you toying with me Ender?

Payout has nothing to do with market cap. Companies raise or cut dividends. Chances are that if the market took a 50% hit some dividends would be cut. But hypothetically if they didn't cut your payout would be 4% of the market


My picked stocks have a 4.8% yield and I have had 3 dividend cuts. Two at 75% cut and one at 50%
« Last Edit: August 07, 2016, 01:11:29 PM by mrpercentage »

ender

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Re: How much in dividends do you make a month?
« Reply #90 on: August 07, 2016, 01:20:24 PM »
Payout has nothing to do with market cap. Companies raise or cut dividends. Chances are that if the market took a 50% hit some dividends would be cut. But hypothetically if they didn't cut your payout would be 4% of the market

This just isn't true historically, though. If you look at this chart you do see some increase in dividend percentages when significant market crashes occur, but otherwise the dividend percentages (as a percentage of the market index) are surprisingly constant, regardless of the actual value itself.

Of course hypothetically they would be 4% if the market got cut in half assuming dividends did not decrease. I'm using the data available to me, though, which suggests they would not be 4%.

mrpercentage

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Re: How much in dividends do you make a month?
« Reply #91 on: August 07, 2016, 01:30:58 PM »
That might be because it references dividends to market cap every year and does not adjust it to the investing entry point showing the dividend growth. Reality Income for example yields 3.5% but if you invested 20 years ago and didn't add anything it's yield for your original investment would be over 15% a year

seattlecyclone

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Re: How much in dividends do you make a month?
« Reply #92 on: August 07, 2016, 01:49:03 PM »
That might be because it references dividends to market cap every year and does not adjust it to the investing entry point showing the dividend growth. Reality Income for example yields 3.5% but if you invested 20 years ago and didn't add anything it's yield for your original investment would be over 15% a year

This is basically a meaningless number. It says more about how long you've invested than it does about how much money the company is paying out in dividends.

mrpercentage

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Re: How much in dividends do you make a month?
« Reply #93 on: August 07, 2016, 01:52:17 PM »
That might be because it references dividends to market cap every year and does not adjust it to the investing entry point showing the dividend growth. Reality Income for example yields 3.5% but if you invested 20 years ago and didn't add anything it's yield for your original investment would be over 15% a year

This is basically a meaningless number. It says more about how long you've invested than it does about how much money the company is paying out in dividends.

We are talking about the reliability of dividends vs equity right?
Great site Ender
Here is dividends of the the S&P


Here is reality income
« Last Edit: August 07, 2016, 02:02:51 PM by mrpercentage »

seattlecyclone

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Re: How much in dividends do you make a month?
« Reply #94 on: August 07, 2016, 03:11:06 PM »
Yep, the dividends have gone up over time. A higher dividend to cost basis ratio means you invested a while ago. Good for you! It says much more about the company's past than its present or its future.

mathjak107

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Re: How much in dividends do you make a month?
« Reply #95 on: August 07, 2016, 05:33:39 PM »
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 ..

kiwiozearlyretirement

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Re: How much in dividends do you make a month?
« Reply #96 on: August 15, 2016, 11:12:02 AM »
Wow Bigchrisb i'm impressed!

Making 95000 in dividends off 1.9million. That looks pretty good in the current market. Are you a stock picker or indexes?
I have a large proportion in VHY but it makes me anxious they only cover 39 companies and most are banks.

FIPurpose

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Re: How much in dividends do you make a month?
« Reply #97 on: August 15, 2016, 10:08:07 PM »
I'm almost hesitant to join in on this discussion, but:

dividends are a real value
capital gains are only a perceived value

You say that dividends are not a free lunch. So I guess that means you think capital gains are? That's just value created out of thin air? You're example of a $100k company that pays a $5k dividend rarely ever drops $5k in value because the value of the $100k usually didn't have much to do with the dividend in the first place. Most companies that pay dividends do so on a predictable schedule, so that $100k value represents the future cash flow of future dividends. There may be a brief period before the ex-dividend date where the stock rises then falls after, but it usually ends in a wash.

Dividends are great and the only option for large mature responsible companies that understand when they've reached saturation for growth. As cash hoarding does not seem to raise stock value by the same amount of cash hoarded.

bigchrisb

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Re: How much in dividends do you make a month?
« Reply #98 on: August 15, 2016, 10:25:05 PM »
Wow Bigchrisb i'm impressed!

Making 95000 in dividends off 1.9million. That looks pretty good in the current market. Are you a stock picker or indexes?
I have a large proportion in VHY but it makes me anxious they only cover 39 companies and most are banks.

I have a mix of stocks (direct and LICs) and ETFs, both domestic an international.  I've got a higher than market weight to REITS too.

However, I wouldn't say that getting that yield is unusual in the current Australian market - 95k off $1.9m is bang on 5%.  Note that I think in gross dividend terms (i.e. including franking credits), as that is real, pre-tax income.  Very roughly, the ASX yields about 6.15% gross (from the RBA's stats, grossed up for franking credits), international non-US stock (VEU) about 2.8% and US stocks (VTS) 1.83%.  so a 50/25/25 domestic / international / US blend of indexes gets you 4.23%, and 70/30 Australian/international gets you 5%. 

kiwiozearlyretirement

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Re: How much in dividends do you make a month?
« Reply #99 on: August 16, 2016, 05:31:38 AM »
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.