Topic: What balance is required to earn $636.75 in monthly dividends - page 2. (Read 266 times)

The dividend can sometimes be misleading, and as Tytanowy Janusz has pointed out


However, dividend investing usually pays off if you know what you are doing. It is about choosing solid companies that you understand their business model and that have a long history of paying dividends and a minimum of 10 years of dividend increases. If you pick 20 companies like JNJ, P&G, O and others like that, maybe after 20 years some of them will have stopped dividend growth or even suspended it but you will easily have 18 that will not only have continued to increase the dividend payment every year but also the share price will have risen considerably as well.

1- these days, a 7% APY can barely break even with high inflation eating up all that profit. But you have to pay tax from 7% profit anyway  XD
2- high dividend stocks are not always good. NOBL (most popular ETF with SP500 dividend aristocrats) pay 1.9% in dividend. If some stocks can pay 7%, 10%, most often there is a reason why investors avoid it. It may be irregular payments or the current high dividend is caused, for example, by a temporary increase in the price of raw materials. It will come back down together with company profits. Perhaps the company is located in a country threatened by its neighbors. Meybe there is a corruption and high crime in the country. Maybe the new tax rules that insiders know about will drive margins down in the future. Maybe there is a thriving competition in the area, quite by chance related to the government of the country. We don't know it but mostly there is a reason for too high apy.
3- there are many examples of companies paying dividends and not making profits. these companies go into debt to keep their payments going (to become a dividend aristocrat or stay in this group). If it doesn't work out well, you can invest a future bankrupt.
4- too high dividend in relation to profits may indicate that the company has nothing to invest in. Which may lead to a collapse of profits in the future and an outflow of capital (decrease in the price) and a real loss. (and you will pay tax on each dividend anyway )

So be carrefour. 2% dividend on good stock is better than 7% on future bankrupt but both will give you a real loss when inflation is at 10%. So now the game is to keep the purchasing power of your money for as long as possible, not to "retire early".

Compound interest or in general collecting money from money is a good idea, but the easier it is to collect money in this way and for a short period of time, the worse it is for the economy. High interest stifles innovation and makes capital cowardly. Instead of investing in development, agricultural or economic projects, you freeze your money and aspire Others default on payments, and thus you earn more, but you will reach a stage where individuals are unable to pay, and the economy will stop.

So increasing it is not a good thing.

Crypto staking gives you a fixed IRR but investing in dividend stocks give you varied returns over a period of time. I am always in favor of getting the best of both worlds. That's why my monthly investments are divided between crypto, stocks, mutual funds, Paper gold and insurance payments. So when one sector goes down, the other sectors can support my investment.

There is a trick to pick up good dividend paying stocks. From the exchange data, see the companies where they have stakes from government. Government invests in companies for dividend income. So when you will see investment from government, go ahead and buy them. Dividends will be guaranteed!

Investing in dividend-yielding stocks can definitely be a great move, but people forget that they need to actually pick ones that will end up performing well business-wise. Having stocks that give great dividend yield doesn't mean crap if the stock price is on a downtrend and if the business is slowly but surely dying.

This is something that Warren Buffett did pretty well with Coca-Cola: https://twitter.com/DividendGrowth/status/1630613809839718400

I like your conclusion on this topic, people should not use a certain stock/shares to judge what a dividend would be in the long run. A lot can change, and as you have rightly concluded, those that had almost-certain plans about some shares and their dividends on it are changing it now because there are many factors to consider which are beyond the companies themselves.

The old/present performance of any company can't be the indication of future performance, so everyone holding a share is taking a risk, with no guaranteed dividend whatsoever.

Good content.   ^

This type of stock dividend strategy could be the closest thing to crypto staking in equity investments.

IMO its an excellent method of earning passive income. Which relies heavily upon compounding interest. The catch is, like most investment strategies it performs best under bull market conditions when averages are rising. The opposite of our current bear market.



Image link:  https://i.imgur.com/kgzTlED.jpg

The chart he displays @ timestamp 13:37 (above image) illustrates the long term earning potential of long term compounding interest with dividend stocks.

In previous years of low inflation and economic stability, many americans were able to leverage this type of long term compounding interest to retire early. Unfortunately things are much harder now.