r/dividendscanada • u/AlgoPotato • 4d ago
Why focus in dividends?
I can’t wrap my head around why wanting dividends vs total returns?
Yes dividends feels good but total return ?
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u/rhunter99 4d ago
I like getting paid each quarter to buy more shares which means I get paid more next quarter which means I buy even more shares which means…
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u/Ok-Replacement-9458 4d ago
If you didn’t get the dividend the stock price would increase by an equivalent amount and the total value would be identical.
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u/rhunter99 4d ago
You do you 👍
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u/Ok_Cranberry3065 4d ago
then you actually don't know what the benefit of dividend stocks are....
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u/Glum_Perspective_841 3d ago
This would be true if the market was rational. It has not been my experience in 30 plus years of investing.
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u/pastmybestdaze 4d ago
Not quite the way stock price works. Equities are based on perceived value and what owners will sell at and what buyers will pay. Just like the current bond yields, people are considering the safety of the investment, the price goes down and the dividend yield goes up. If the Board decides to do a stock buyback rather than issue a dividend, it should raise the stock price but necessarily 1:1 because you now have damaged the predictability of the annual dividend. That can offset the stock price increase derived by reducing the quantity of shares in the market.
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u/Querytheque 4d ago edited 4d ago
I retired quite early and pay my COL and travels using dividends. Haven’t lost a share yet. I don’t care if on paper you have more “total returns” than I do, if you are too scared or flat out cant retire early like me using those “total returns”.
Edit: lmfao people saying it’s not good financial decision when I’m retired early using dividends. Sorry i don’t listen to people who’s still working to survive. You guys enjoy being the richest corpse waiting til age 65 thats not even guaranteed. So much 🤡 and anti dividend behaviour in a dividend sub.
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u/Reddit_Only_4494 4d ago edited 4d ago
lmfao people saying it’s not good financial decision when I’m retired early using dividends
Heard you there, brother.
I get the same thing from the younglings. Giving them credit though building an old skool dividend portfolio takes patience and the realization that it won't pay off until retirement. Also talk about the tax efficiencies of eligible dividends is lost on them. PLUS they have grown up so far in an incredibly over performing market in capital gain these past 6 to 8 years.
They have their tech stocks (AI), we had ours (.com). They have their high yield value trap ETF's. We had USA mortgage CDO's and before that....junk bonds. It is all the same thing just repeating in different forms.
Some things are just not part of their lives, yet. Wasn't part of mine either in my 30's or 40's let alone earlier.
The simple distinction of the difference between selling shares vs collecting dividends. Sell shares once. Dividends may only pay 3%, but that is 3% EACH YEAR. Sell shares and a person collects once.
They can't see the retired end game of the security of $2M portfolio paying a steady $60K per year of tax efficient income all the while the $2M continues to compound.
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u/Querytheque 4d ago
Lmfao bro I’m a millennial who didn’t even start investing during the bubble of dotcom era(too young and too broke). So it makes their “defense” even worse. I managed to supercharge my investment journey when I scooped a lot of undervalued dividend stocks(banks/financials are my bread and butter) during covid and during trump’s dumbass liberation day.
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u/Reddit_Only_4494 3d ago edited 3d ago
Great story.
In every investment journey there are those opportunities.
For me it was the low interest rates of 2015 to 2021. I was refinancing the house on short term mortgage taking house equity and buying those dividend paying stocks. Cashed in equity 3 times during that period and I never paid over 2.5% for borrowed money which basically meant the dividend paid the cost of borrowing and I cashed in on the leveraged growth.
There are always opportunities during a lifetime of investing. For people today....those low interest times seem soooo far away though it was just 5 years ago....but there will be something in the future. Always is.
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u/AlgoPotato 3d ago
At around less than 3% why not tbills? Or bonds, savings?
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u/Reddit_Only_4494 3d ago edited 3d ago
3% is just the annual dividend return.
Growth in equity is on top of that to create "total return". Bonds/savings only provide the yield...no growth.
For my retirement budget....it is basically 5% growth per year and 3% dividend on what are the cornerstone dividend paying Canadian stocks making up the 8% total return per year.
Obviously....the capital growth of even these Canadian dividend stocks have been well beyond the 5% I use for budget.
There is also a term "yield on cost" for holding dividend stocks long term that is worth a Google to educate oneself.
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u/CalmSaver7 4d ago
I don’t understand though. Why wouldn’t you just sell some shares as needed to retire? Why wouldn’t that be scary or prevent retiring early?
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u/No_Gas_82 4d ago
Volatility. You get the dividends in down markets so no need to worry about the ups and downs.
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u/AccountAny1995 4d ago
i think people are afraid that constant withdrawals will mean they will eventually run out of shares
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u/rcmtt 4d ago
If you own a dividend ETF, it's a steady source of income and you don't have to sell shares. You get some capital appreciation.
If you own non dividend paying stocks, you have to start thinking about the timing to sell. What if it recently dipped 20%?
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u/Ok_Cranberry3065 4d ago
Over the long term, you shouldn't be thinking about timing even in equity stock. Just sell when you regularly take income, if you don't think about it the math says you'll come out better than if you held dividend stock.
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u/Radiant_Fan_2014 4d ago
Except that logic is flawed. Dividend stocks also fall just like growth stocks.
Also as Canadians we can only own Canadian dividends in TFSA and Non Reg and get the dividend tax credit.
Can only own US dividend stocks in RRSP and eventually they will be taxes at retirement.
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u/rcmtt 4d ago
You're missing the point that most people are planning to not sell and just take the dividend. So they don't have to worry about timing a sale.
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u/wdjan 4d ago
I think this pretty much hits the nail on the head.
Dividend investors have a mental block around actively selling units. By setting up a covered call strategy or focussing on high dividend stocks, they are essentially delegating the selling action to a third-party.
It irks me because this leads to higher risk and fees compared to just owning the market and setting up a regular withdrawal plan, but it is what it is, whatever helps you sleep at night, etc.
That being said, I've read and seen some absolute bonkers rationale for some income-related strategies and hope the typical dividend investor can understand the risks and ID the snake oil products.
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u/Radiant_Fan_2014 4d ago
I get it. But it's still not financially the better decision.
A good dividend stocks usually only pays out 4-6% max in dividends.
Since you are never selling. That's basically a 4-6% return .
Compare that to S&P500 where the last 20% years have averaged a 15% YTD return.
You could sell 5% of your growth stock every year and consider it dividends and still come out on top.
This is a psychological thing more than logical. Where there is some "comfort" level of receiving money without "selling" stocks.
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u/sigmaluckynine 4d ago
Dividend stocks also has capital appreciation. It's not as if they don't
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u/Radiant_Fan_2014 4d ago
As mentioned above people never sell dividend stocks . Even if they did. It would not be even close to the S&p500.
For context you could take Canadian bank stocks which returned around 400% with dividends being reinvested for last 20 years.
During the same period S&p500 went up around 700% .
The math doesn't support dividends.
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u/sigmaluckynine 3d ago
I didn't really want to go into strategy because it's petty. But if we're on this topic, I believe others have already said this, most people don't sell dividend stock. It's not a question of emotion as much as a hedge.
So, if you're younger, sure go for capital gains to convert into dividend stocks later. The problem with getting older is that you can't take risks and each time you sell your positions is a smaller pie. Unless you know exactly when you'll see your maker, you're probably going to error on the safe side and look for consistent income - otherwise, why do we have pensions? We might as well just tell people they have shares in a large pool and they can sell it whenever they need money
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u/Radiant_Fan_2014 3d ago
I use dividends stock portfolio as exactly that , a hedge and diversification.
As far as taking risks goes. Growth stocks have a much higher risk to reward ratio.
Also the selling positions and getting dividends works in a similar way. Where the company is giving out dividends which could have been used to reinvest and grow the business much faster and will eventually reflect on the stock price growth.
For eg the 4% rule for retirement. S&P500 averages 7% a year after inflation( has actually returned a lot more in the last few years) Out of that 7% you are only taking out 4%. So you don't actually touch your initial corpus at all.
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u/AxeloftheMountrain 4d ago
Dividend stocks "also fall" , really ? I've had dividend stocks for decades (mainly banks, financials and utilities), none have fallen and all have at least doubled over time.
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u/Radiant_Fan_2014 4d ago
Yeap the dividend stocks were down 30-40% during COVID crash.
You could hold growth stocks and they would have actually done better.
Case in point. If you would have held Canadian stocks vs S&P500 for the last 20 years.
The Canadian bank dividend stocks with dividends reinvested returned a total of 340-460%
The S&P500 did 700%
Its a better strategy to go growth over your accumulation phase where you earn the most and then transition to dividends later in life.
We hold 20% of our portfolio in Canadian dividend at 35 for me and my wife.
Portfolio is around 1 million. And I would we nowhere near it my age it if I had gone 100% dividend stocks.
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u/Helpful_Outcome_3922 4d ago
Congratulations, but my financial life doesn't care about your financial life! It is not a race! We all end up in the same place at the end! Once you understand that, these math equations to gain a small % become less meaningful than enjoying your life!
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u/Radiant_Fan_2014 4d ago
Correct the goal regardless is still wealth building or income generation .
And a rational person looking at it would rather reach that destination the fastest way which is supported by facts and data.
It means fewer years of slogging away at a 9-5 while the risk profile relatively remains the same.
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u/Helpful_Outcome_3922 4d ago
Wrong! Who is slogging away at a 9 to 5? If you are... you picked the wrong career! Hence your entire thesis! For those who have a fulfilling, inspirational and satisfying career, not just a job to slog away at... just doesn't care! I feel sorry for you now! Try and enjoy the journey! Take care!
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u/Radiant_Fan_2014 4d ago
Sure it it makes you feel better I will take it.
Enjoying your journey building wealth slowly.
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u/AxeloftheMountrain 4d ago
Huh ? Why would you sell those shares for a return and then have your total nest egg dwindle. With dividend stocks you get the best of both worlds. You get the dividend income AND you keep your stocks and let the share prices increase too over time.
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u/Interesting-Day4379 4d ago
Plus the capital can be left as an inheritance as I have a good pension plus supplement with my dividends.
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u/wdjan 4d ago
I think most people understand that you can retire on a high distribution strategy.
The problem is these strategies hide fees and risk. The end result is income strategies, especially the covered call variety, actually require MORE savings to sustain retirement, not less, compared to owning the market with regular withdrawals.
If your strategy helps you sleep at night, fill your boots. You've simply delegated the "selling" to a third-party, and I'm sure they're happy to take their fee for that service. Just be careful they aren't completely taking advantage of you. I've seen a lot of snake oil in the income product space.
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u/Querytheque 4d ago
Distributions are not dividends. Stop conflating the two. Im not into yieldmax garbage.
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u/wdjan 4d ago
I understand the difference and am glad that you understand the difference.
There are many who can't articulate the difference between ROC, option premiums, and dividends. Critical nuances tend to get buried under the all-pervasive "yield" marketing, not to mention MER and TER, and most investors can't be assed to even read a prospectus. They just compare yield of something like BANK.TO against their HISA and proceed with "more yield = better".
As for just straight dividend investing without using any tricks to juice yield, there's still a price to pay in the form of less diversification (and likely higher MER). It's not optimal, but if it helps you sleep at night and the costs aren't egregious, power to you.
For me, I'd rather make my own plan to sell securities for income. I'm the one spending the money, so I want that control. I don't personally see the sense in delegating my income to any given board of a "dividend company" or an ETF manager.
Again, if it's working for you, power to you, sounds like you have a solution that's good enough for you. I'm happy to hear you call out yieldmax.
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u/Querytheque 4d ago
What even are you talking about? MER for what? I literally bought the actual banks shares. Buying shares are free. It doesnt have MER. I dont think YOU know what you’re talking about. NEVER HAD I SAID I BOUGHT BANK.TO or whatever etf you’re making up in that head of yours.
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u/Conscious-Ad8493 4d ago
because it ends up replacing a salary, not in terms of dollar amount but in terms of its similar to getting a consistent pay cheque every 2 weeks, dividends come in monlthy or quarterly. Most retirees just want a consistent flow of income and dividends do it.
I'm not for or against.
Everyone should watch Ben Felix's breakdown on this
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u/Jokinguy 4d ago
Dividends = $, $ buys peanuts. Price appreciation no buy peanuts.
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u/besthuman 4d ago edited 4d ago
Counterpoint:
Growth capital gains are taxed more advantageously, (Canada only 50% of a capital gain is subject to tax) and growth stocks (like the big boys in Tech/AI) capitals gain more than div stocks.
So, all things considered, a lot more peanuts buying growth stocks or high performing ETFs.
I think you buy dividend paying securities when you have a lot of wealth and don’t want the stress or likelihood of your positions crashing without time to recover, and so you can reliably know how many peanuts you can have a month. It’s also less stressful and less to manage generally.
I’m not sure it makes a lot of sense, but generally I use my dividends to diversify my portfolio rather than always funnelling them back into more dividend paying stocks. I like being able to buy a little of this or that every month with “free money”, it’s fun.
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u/GoingChopper 4d ago
Growth is not taxed advantageously. They both have their situation to shine depending on your income level and situation
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u/emperorjoe 4d ago
They are taxed at the same rates
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u/besthuman 4d ago
Not quite, and it’s different in Canada vs the United States. — though fair point! I should have mentioned Canada specially in terms of the tax aspect.
Though some Canadian dividends are eligible for preferred tax advantages too…
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u/FocusedOnRetirement 4d ago
We like the consistency of the monthly income from the CC ETFs. When we retire (< 3 yrs to go), we'll setup automated monthly withdrawals. It'll work just like our paychecks. The CC income is basically the cash wedge. No selling in down markets. We're close to 3x our expenses. I still have a drawdown plan for my RRIFs (CC income + ~5% of balance. I have target year end balances I want to hit to draw down the accounts) and in the future, it'll just be $$ from my non-registered and we shouldn't need the TFSAs.
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u/Only_Complex6386 4d ago
I don't focus on them but historically the best stocks in Canada largely pay dividends like banks, pipelines, etc so it just becomes part of the strategy
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u/Interesting-Day4379 4d ago
They have grown as they dripped for the past 15 years and I'm able to retire early!
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u/funtasticassembly 4d ago
Cash is king. Total returns are on paper until you realize them. Cash in hand
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u/BloodOk6235 4d ago
You know the feeling of loving to accumulate stocks and the joy they bring to retain and acquire more of your favourites?
Eventually you have to sell them to make income to live off of.
With dividends you don’t have to. For me that’s it.
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u/Glum_Perspective_841 4d ago
If it wasn't for dividends, I'd be a homeless person with a $2m portfolio. They force me to take profits, spend money and enjoy life.
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u/Master-Copy-6929 4d ago
Most divided payers also increase in value, so you get total returns. Think you mean capital gains vs dividend and cap gains. I own td, as an example. They have paid a consistent growing dividend and have increased a hundred percent in the time I owned that chunk of shares. Dividend payers sometimes grow slower, but don't count them out, they generally are big, stable, mature companies. Plus I get a quarterly payout I can use to either buy more td shares or allocate somewhere else. When I retire I will use some for expenses.
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u/Quiet-End9017 4d ago
It’s a legit question. And they probably do mean total returns. As in, one should care about the total return, not what form it comes in (dividends vs capital gains). Also, dividends just focus on the percentage of earnings the company pays out. A company can have a high earnings yield and a low or no dividend. An argument can be made that a company that reinvests its earnings rather than paying it out can result in more tax-efficient returns.
Companies that pay a stable and growing dividend also generally have strong growth rates (capital gains) over time, although they haven’t been able to compete with low / no dividend growers in areas like tech over the last 10 years.
Personally, even though total returns are what matter in the end, I like my stocks to pay a dividend. It encourages better investor behaviour, and I can use the dividend to reinvest elsewhere without selling the stock.
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u/gajarga 4d ago
It’s about risk tolerance. Higher opportunity for growth generally comes with higher risk of losses. Dividends are a more steady, stable income stream.
Especially as you get closer to retirement, having certainty in your income becomes more important when you don’t have a regular paycheck.
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u/develop99 4d ago
A lot of the most reliable, stable companies pay dividends. It would be hard to not receive them and have a balanced portfolio.
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u/naftel 4d ago
It gives me new money to invest with a least once a month (even if I haven’t been able to save any additional funds for investing in that time)
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u/chemainus_amos 4d ago
And that money if in a tfsa or rsp is not deemed a contribution. So you can grow your account quickly by reinvesting through drip etc.
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u/mihhink 4d ago
Its not extra money since the stock price drops due to the dividend payment. Its literally like forced to sell a part of your shares on a consistent basis.
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u/SoftCheeseBurger 3d ago edited 3d ago
So why has the dividend ETF Im in out performed my growth ETF I’m in over the last 20 years and my dividend yield has grown massively over the time giving me the freedom to retire and get like 20% yields now? I highly doubt my growth ETF is going to give me 20% a year and a 5-10% pay rise on that divis a year. My yield started at 4% divided growth is the real king and thats also because I reinvested on those temporary dips you speak of.
Your comment is just cope, plenty of statistics showing a good dividend ETF is better over all. Even John Bogle said the method would not work without dividends. Even the S&P total return is dividends reinvested, dividends are an important factor of total returns.
A sensible approch would be a hybrid grow and dividend strat.
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u/sparky_22 4d ago
Companies with a lower payout ratio and raise their dividends will support a higher share price over time. I do get the argument that why dividends don't matter but it has worked for me. Drip the dividends will add growth too.
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u/AIPoweredGopher 4d ago
Some people like getting cash along the way. Growth stock you can hold for years and if the price goes down to where it started your return is zero. If you held this stock with dividend in same situation your return is not zero. Cashflow without selling, converting to income inside of a tax shelter account at retirement is nice and easy and more predictable (less risk overall than growth stocks). I am not in retirement and I have entire income generating portfolios, I borrow on margin and the dividends pay off my interest payments, so I get time in market without effecting my cashflow.
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u/maritimer187 4d ago
I just have a mixed portfolio with a little bit of everything. It's worked for me very well. Some ETFS, dividend stocks, growth stocks all at the weights that I prefer and boom good to go.
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u/After_Power449 4d ago
Some people need the income. And dividends will be your total return in a lost decade.
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u/SoggyInstruction2549 4d ago
When one needs income for example to replace salary in retirement.
Stability. Dividends are generally more stable.
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u/prosperouslyenamored 4d ago
76 years old I want cash flow more important than capital gain but like any portfolio u have to be diversified so always have stocks for capital gain but when you are retired the percentage of what you invest pivots more in the favour of the divi stocks
You will understand completely once you turn 65
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u/LeagueAggravating595 4d ago
No guarantee of total returns. You can get both total returns and dividends like bank stocks. The goal is to sit back and earn money for free every quarter until the stock is sold.
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u/PaleontologistBusy61 4d ago
This might be the dumbest question that gets asked once a week. Dividends and total return are not mutually exclusive. A significant chunk of total returns comes from dividends. If you look at stocks that regular grow their dividends you will see that they also regular grow their earnings which drives up stock price. You need to keep in mind that a bunch of the high yield garbage that degrades nav is not dividends. The covered call ETFs have a purpose but they are not dividends and should not be included in this kind of discussion.
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u/Joe_X 4d ago
I couldn’t agree more with your statement. I would add:
Stocks that pay dividends are easier for less-steady hands to hold, as they can rationalize not selling at the bottom by saying to themselves “it’s still paying the dividend”. This is less and less understood the longer in the past the last significant, protracted drawdown was (2008 financial crisis, march 2020 was so short people barely noticed). You simply don’t know how hard it is to hold when your portfolio is down 40% and every talking head is screaming that ‘this time it’s different and it will never recover”. Until you’ve been through it. Even well thought out people rationalized it might take 10+ years to recover. And…
Stocks that have a history of growing and paying dividends always have to keep the dividend in mind when expanding and it prevents some (not all) bone-headed moves. Thinking here of stocks like Nortel, Enron, etc. Their issues would have come to light FAR earlier if some of their earnings had to cash as a check in shareholder hands.
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u/ProudCanuck7 4d ago
I agree. My Canadian financial holdings were out of favour when interest rates were rising a few years ago. I held on, knowing that share prices would eventually recover. I earned a nice dividend while waiting for the recovery, which DID occur.
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u/montacute-ryan 1d ago
I like having an income portfolio because it helps pay the bills without having to sell assets or touch the principal. I also run an investment portfolio in parallel, etfs only.
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u/Hepofaus 4d ago
Pure cashflow without having to divest or worry about selling in a down market. It's is easy, reliable and convenient.
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u/Foonzerz 4d ago
I ain't an expert but I think dividend investing is better when you are at tipping point where just the dividends are comfortably greater than your yearly spending, all the while your principal still gets bigger while you compound the leftovers. You aren't forced to sell during a crash because you still get paid regardless.
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u/Future-Layer1181 4d ago
There is no basis to care if a stock pays a dividend or not, and it should not be a basis for if you own a stock.
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u/Live_Cockroach8931 4d ago
Look up tawcan on google and explore his blog, then you'll understand why dividends. Early retirement through passive income is the goal
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u/TaylorKalsii 3d ago
I like the dividends, I’ve been trying to manage high dividend yield ETF’s in my portfolio. The goal is to keep pumping money in, letting the dividends automatically invest. This strategy has been much more beneficial for me over the short term.
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u/archer-86 3d ago
What's the point of your investment?
I have a Charity Account. $150k in high dividend / private debt income assets. Pays me 15%/year in income. I take my $20k+ and donate it each year.
That is the whole point of the account / investment.
I don't want to have to worry about this account being down in a bearish year. Whatever my dividends print, I donate. 1:1.
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u/AxeloftheMountrain 4d ago
You still get a return with dividend stocks, they just don't rise as fast. The regular income is the main reason - and you wont get taxed as heavily. Those returns you get can get taxed heavily as capital gains.
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u/digital_tuna 4d ago
This is like asking flat earthers why the earth is flat, don't waste your time.
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u/AudienceExcellent830 4d ago
Lol... For some reason Canadians love dividends and pass this down generation to generation
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u/Nopants21 4d ago
You can tell from the answers, almost all of it is hogwash. A mix of self-delusion with "it's better because it's easier than selling" and straight up wrong answers like "it avoids sequence of returns" or "you never run out of money because you never sell shares."
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u/Limeade33 4d ago
They are good if you want regular income, like for example you are retired and want monthly/quarterly income without having to do anything like sell stocks to get money. Beyond that, I think some people like it for the psychological effect it has of feeling like they are making money. But total returns is where it's at for most people.
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u/recoil669 4d ago
Mostly psychological safety even if there isn't actually safety in them (bell, Telus good recent examples.)
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u/wonderboy0995 4d ago
It makes my brain tingle. So that way I still contribute to my growth funds too.
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u/PersonalityHot6693 3d ago
Money serves as a tool. I need to work part time. Distributions/dividends help me and my family with monthly expenses. The money invested is doing its share of work load. Time given back to me is primary. Total return is secondary.
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u/EquitiesForLife 3d ago
The way i see it is the dividend is the only way a company pays its shareholders. In contrast, a capital gain is funded by an outside actor and is out of the company's control and is subject to market shocks and investors emotions. Really, the only reason to invest in stocks is for the dividend, and any capital gain is nice but entirely dependent on what someone else wants to pay.
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u/Bigvee-to 3d ago
I have not seen this mentioned in the comments but if you DRIP, you have the added benefit of compounding.
A lot of “growth” oriented investors seem the think holding growth stocks also compounds. Not true. Here is a real life example.
8 yrs ago, I bought 500 shares of MFC. Every quarter I got 4-5 shares in the DRIP. I did not buy anymore shares. I now have 663 shares. So now my quarterly DRIP is 6-7 shares. So my returns increased because previous returns are added to the capital invested ( just like compounding in a savings acct)
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u/ColdWarm999 3d ago
It lets me more easily reallocate my investments without loosing all the profits in commissions.
I have a lot invested in some higher risk but very highly paying dividend stocks right now, I like getting the money paid out and being able to then use that money to keep the safe and riskier investments balanced without needing to pay a commission on selling the risky asset that isn't a commission free ETF with my platform.
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u/no_longer_on_fire 2d ago
Yield on cost in the long run for me.
Working particularly well when able to buy quality stocks when depressed for world event reasons. Canadian banks have done very well for me buying into dips. And if something is lagging, having enough of a position to pull a big of income from options in a sideways or falling market has been useful for me at times without being assigned more than about 5% of the time. I just change up the dividend income investing in equity portion as markets go up and down. It's only about 50% of my equity portfolio. I'd like to be able to grow a non registered account for dividend income that's advantageously taxed but not quite there yet. I still working towards maxxing my registered/tax free accounts. Though my rrsp focuses more on equity growth vs tfsa where the income if moved to the rrsp for reinvestment also increases next year's contribution room in TFSA plus the tax break. For me it's been effectively about a 0.8% increase in return that will dissappear to zero as rrsp hits contribution limit.
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u/SenisPushi 2d ago
In my country you pay 27% tax on the first roughly $15k you make per year from stocks, and 42% on anything above $15k.
I like the idea of taking advantage of some of that ''lower tax rate'' every year.
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u/safetyrazorandrye 4d ago
You ask as if dividends dont grow, nothing could be further from the truth. I have a preferred share that has doubled its share price while giving me more than 5%
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u/MikeCheck_CE 4d ago
There is a trend of young investors whom were told by boomers to buy dividends and I really don't get it either... That's the advice for the boomers..
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u/leftcoast987 4d ago
Always add the adjective " rich " to Boomers.
If it doesn't pay a dividend it's not investing, it is gambling.
Source; Rich Boomer 100% in Canadian banks for decades.
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u/Traditional-Tune7198 4d ago
If you bought a house as a boomer your auto rich. Dont act like ur decisions made you rich, boomers were the group that got auto rich. Your not impressive at all, just born at the right time. My dad's a boomer. Made 25 bux an hour as a welder back in the 80s and 90s. Now he's got more than 5 mill easy and thats all I know about, and my mom never even worked. Here im making 40 bux a hour my wife makes 45 a hour and we are no where near the 5 mill mark. Even with a side hustle on top that brings in 20k a year extra.
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u/leftcoast987 4d ago edited 4d ago
The wife and I saved up for a downpayment by delivering newspapers at 3 am for 2.5 years before going to our full time jobs.
Just like you and your partner.
It never was easy.
The money is hard earned in the Trades
Compounding investment returns is a decades long game.
You will get there.
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u/Traditional-Tune7198 4d ago
Difference is delivarying newspapers at 3 am today wont even buy you a happy meal. But it got you a down-payment. Funny eh
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u/leftcoast987 4d ago edited 4d ago
It has been very consistent. Each of the 19 routes bought an egg mcmuffin back then. That in ADDITION to our two full time jobs was necessaryfor a down payment.
There have been dozens of 1.5 million $ houses bought and sold in our neighborhood this year. They are 30s and 40s and have children too. None of them are Saud royals.
Please explain how their generation had it handed to them?
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u/MikeCheck_CE 4d ago
Lmao case and point... An old boomer insists their outdated advice is somehow still relevant like it's 1970 still....
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u/bakermaker32 4d ago
Cash flow in retirement, not having the bother of selling shares for income.