Yoda2000675 t1_j690lq3 wrote on January 28, 2023 at 4:45 PM

Reply to comment by hbkx5 in I'M FUCKING BACK BOYS $TSLA by iefhno

It’s a decent strategy, but you’ll miss out on a lot of growth. Dividends are better used for retirees that will rely on their holdings for income

hbkx5 t1_j6beuoh wrote on January 29, 2023 at 3:09 AM

Yes and no, dividends are great to live off of and invest with. They would still have extra money from the amount they listed to invest and grow with if they pleased. If they live cheaply for the next 10 years of their life they could pay off a home and a car from the dividend. The remainder of their life could just be passive dividend money they mostly invest with.

Over the course of their life time (if they are somewhat young) It is a much better investment than most, however I do agree they should diversify. A mix between stocks for dividend, some stocks for growth, a small business with little to no maintenance / rental property, high interest hedge fund, alternative investments (something collectable that goes up in value over time, comics, lego's ect.), personal checking /savings / cash and finally a small amount of crypto (about 1% of total wealth) would be ideal IMO.

I am also big on generational wealth and building a better tomorrow for your descendants so that hopefully they can live a better life and in turn pass that wealth and tutelage on to their kids, so on and so forth.

Yoda2000675 t1_j6bm8zd wrote on January 29, 2023 at 4:10 AM

I just meant that they’d average out to get better returns by focusing on growth stocks and ETFs long term.

Dividend stocks tend to underperform just slightly because they generally aren’t going to grow much. Having dividends auto buy partial shares is by far the best way to use them and ends up avoiding the issue of dividend cash income being taxed at the rate of income tax rather than capital gains.

codemonkey14 t1_j6bot4i wrote on January 29, 2023 at 4:31 AM

Theoretically, if I have an investment that provides me a middle class income for 0 work consistently for the rest of my life, why the hell would I care if I “missed out on a lot of growth”? That basically gives you “fuck you” money.

Yoda2000675 t1_j6brbem wrote on January 29, 2023 at 4:53 AM

Not with inflation. If you pocket your dividends every time instead of reinvesting; then you will end up making less as those stocks wont grow to keep up with it.

Companies only pay big dividends when they’re effectively done growing.