Author Topic: Monthly Paying Dividends  (Read 5264 times)

NWOutlier

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Monthly Paying Dividends
« on: April 11, 2014, 11:28:17 AM »
Hi Everyone,

Quick question; I'm a regular reader of Mr. Money Mustache and JLCollins - I'm heavy into VTSAX (Vanguards Total Stock Index) and love its performance.  I'm wondering if there are any high quality, low cost, monthly paying Vanguard dividend funds that people feel are a worthy comparison to VTSAX and VGSLX (an REIT I use for my tax advantaged account(s)).

Just looking to include something with a monthly dividend along with the qtrly.

Thanks in advance for your input,

Steve

skyrefuge

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Re: Monthly Paying Dividends
« Reply #1 on: April 11, 2014, 12:45:04 PM »
Just looking to include something with a monthly dividend along with the qtrly.

Why? Are you in retirement and need the income monthly? That implies your cash buffer can only cover up to a month's worth of expenses, which seems like an unnecessarily risky way to live. Just keep an extra couple months of expenses in your savings account, and replenish it quarterly.

A quick glance at Vanguard's dividend-focused funds showed quarterly payouts (and generally at similar levels as VTSAX), but I won't rule out the possibility that there's one I don't know about.

If monthly income is your requirement, maybe you could look at Vanguard's Managed Payout Fund (VPGDX). Of course that fund doesn't have any dividend-specific focus, since Vanguard knows that a dividend-focus is a sub-optimal way to generate income.

aclarridge

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Re: Monthly Paying Dividends
« Reply #2 on: April 11, 2014, 01:21:55 PM »
I'm heavy into VTSAX (Vanguards Total Stock Index) and love its performance.

It has been appreciating a lot lately but I hope you love it for the low management fees and tight index tracking - don't start hating it if the underlying index drops!

I'd echo skyrefuge's questions about why you need such a product, but anyway here's a list I found (doesn't seem to have much Vanguard though): http://www.bestdividendetfs.com/dividend-distribution/monthly/1.html

wtjbatman

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Re: Monthly Paying Dividends
« Reply #3 on: April 11, 2014, 08:18:03 PM »
Dividend paying stocks (or funds) are a great way to generate a growing income stream, but if possible, I wouldn't try to narrow a focus to only dividends (or dividend funds) that pay monthly. You will be missing out on too many good opportunities. Plan ahead and those stocks and funds that pay quarterly will work great.

spoonman

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Re: Monthly Paying Dividends
« Reply #4 on: April 13, 2014, 06:18:57 PM »
I get my monthly income fix by investing in the awesome REIT called Realty Income (ticker:O).

But yeah, you'd be missing out on too many good companies out there that pay quarterly dividends if you concentrate too much on monthly paying companies.

Another interesting choice is WisdomTree US Dividend Growth (DGRW).  But do your due diligence first, their monthly payments are not stable.

arebelspy

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Re: Monthly Paying Dividends
« Reply #5 on: April 14, 2014, 08:56:56 AM »
Just looking to include something with a monthly dividend along with the qtrly.

Why? Are you in retirement and need the income monthly? That implies your cash buffer can only cover up to a month's worth of expenses, which seems like an unnecessarily risky way to live. Just keep an extra couple months of expenses in your savings account, and replenish it quarterly.

This.

Investing sub-optimally to save a tiny bit of work is a really bad idea in the long run.  If your quarterly dividends will cover you, but you want it monthly, have your dividends dropped into a money market account with your broker and set up a monthly transfer out to your checking account... but don't look for ones that pay monthly just for that specific purpose.
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NWOutlier

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Re: Monthly Paying Dividends
« Reply #6 on: April 15, 2014, 04:52:43 PM »
Ah!

Thank you!  I get it; you're right.  Typically I have 3 - 6 months laying around in cash.  When I move away from 'have to work' status, I'll keep that or more in cash... I follow one of JLCollins' articles where he keeps around 3 years cash to weather any storm that may last up to 3 years.

I'll stick with my qtrly VTSAX.

Steve

diesel15

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Re: Monthly Paying Dividends
« Reply #7 on: May 12, 2014, 08:02:41 PM »
Just looking to include something with a monthly dividend along with the qtrly.

Why? Are you in retirement and need the income monthly? That implies your cash buffer can only cover up to a month's worth of expenses, which seems like an unnecessarily risky way to live. Just keep an extra couple months of expenses in your savings account, and replenish it quarterly.

This.

Investing sub-optimally to save a tiny bit of work is a really bad idea in the long run.  If your quarterly dividends will cover you, but you want it monthly, have your dividends dropped into a money market account with your broker and set up a monthly transfer out to your checking account... but don't look for ones that pay monthly just for that specific purpose.

While I agree that investing in monthly dividend paying stocks should not be done solely on the basis that they pay monthly, there is some merit to investing in monthly dividend payers vs. quarterly.  If you don't currently need the income and are reinvesting the dividends, the overall return by reinvesting monthly vs. quarterly is higher  http://hubpages.com/hub/Best-Stocks-Which-Pay-A-Monthly-Dividend

timmoney

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Re: Monthly Paying Dividends
« Reply #8 on: May 12, 2014, 11:04:18 PM »
one thing that i do is buy closed end mutual funds. many pay monthly dividends and report their net asset value regurlarly so  my goal is always to buy it at a discount to their assets.
  i have also piggy backed bill gross many times and always profited. he usually buys closed end funds that are part of pimco and i think they all pay monthly. check the insider buy lists. they are all over the internet. the problem with piggy backing is you dont know when he's going to sell. for myself i have an eye on a percentage gain at which i'll see a portion of it just as a way of protecting some profits. when gross buys he usually holds for a signifcant period of time.
  just an idea that has worked for me.