I love dividends.
As an entrepreneur, I’ve always had a concern that the irregularity of our income could be a financial risk. Normally, a younger investor (I’m in my 40s, so I’m not “young” but I’m closer to my college graduation than my “retirement”) would prefer capital gains over dividends. You want the company to keep the cash and re-invest it into the company.
But as an entrepreneur, dividends offer a bit of income insurance that I can’t get elsewhere. Plus, picking dividend stocks scratches my “stock picking itch” in a responsible way.
It will be fun, as I do enter retirement, to count on some of that cash tax free. 🙂
Dividends Provide a Tax-Efficient Form of Income [Dividend Growth Investor] – “This means that if you are single, living on your own, and only claiming yourself as a dependent, you can essentially make $52,950 in annual qualified dividend income, and pay zero taxes on that. This includes the Standard Deduction of $12,550. This calculation also assumes you have no other sources of income and no other deductions for the sake of simplicity and to illustrate the point. In order for you to generate so much in income, your portfolio would likely be worth around $1.765 million at a dividend yields of 3%. If you made your selections wisely, your dividend income should at least keep up with inflation over time. With most dividend growth stocks, I expect a 5% – 6% annual dividend increase in the long run, ahead of the long-term annual inflation rate of 3%.”
How Charlie Javice Got JPMorgan to Pay $175 Million for … What Exactly? [The New York Times] – “When JPMorgan Chase paid $175 million to acquire a college financial planning company called Frank in September 2021, it heralded the “unique opportunity for deeper engagement” with the five million students Frank worked with at more than 6,000 American institutions of higher education. Then last month, the biggest bank in the country did something extraordinary: It said it had been conned.”
Fort Walgreens [Curbed] – “The recent spike in shoplifting is both overblown and real. And almost everyone is profiting from it (including you).” Courtesy of J.D.!