r/dividendgang

So I have been wondering this for a while. Is it really tax efficient to go all growth then convert to dividends or build up your dividends and not convert?

So here are the numbers assuming $250,000 initial with $1000 monthly contributions over 10 years, I used a 20% capital gains rate since that is what I pay and will pay:

All growth VTI (80%) and VXUS (20%), Selling Half of the portfolio and buying dividends:

Total capital Gains/taxes= $85,791

Total Real Returns (returns-taxes): $1,027,389.90

All Dividend Growth SCHD (80%) and VYMI (20%):

Total capital Gains/taxes= $46,873

Total Real Returns (returns-taxes): $1,086,520

Mix growth+dividend VTI(40%)+VXUS(10%)+SCHD(40%)+VYMI(10%):

Total capital Gains/taxes= $29,172

Total Real Returns (returns-taxes): $1,094,114.2

Looks like it is better and more tax efficient to add dividends from the beginning and not going 100% growth then selling, since you end up paying more taxes. It also surprised me that the total returns are actually almost the same after taxes!!! It's true you get to delay taxes in the growth funds but it will take time for the dividends to build up and be substantial as well so in my opinion it is better to spread the tax burden over multiple years.

Note: Used dripcalc.com for the projections. VYMI (and SCHY) suggested dividend growth rate was crazy and threw off the numbers so I used SCHD's dividend growth rate.

Note 2: It would be the most tax efficient to go all growth in a 401K or IRA then transfer to dividend since you do not pay capital gains. This is assuming the funds are in a taxable account!

Hello everyone!
I look at this subreddit every day, learn a lot, discuss common questions and see other people’s portfolios. What caught my attention is how many posts are asking about advice for retiring with dividends. In my opinion retiring with dividends is the ultimate goal, but it shouldn’t be everyone’s goal right of the bat

Dividend compounding is a slow process and it requires a lot of discipline. Because of this dividend investing looks like it is not worth it in the long, but I disagree. I think the bigger issue for us, is setting up unrealistic goals for unrealistic time frames. Rather than having retirement goals from the get go, how about you start with small goals, like 1$ a day from dividends, then 2$, 5$, 10$

You can have a goal that one dinner a month will be bought with dividend income, one tank of gas is from dividends and so on. These small, but realistic goals will keep you going, will make you feel proud of yourself and will show you that all the investments and discipline is paying off. This will motivate you to keep going and enjoying the process

Another thing we don’t think about when it comes to retirement, is that maybe we won’t be able to replace work with dividend income, but maybe we won’t need to work as hard/long as before, maybe it will open doors for jobs that you would love to do, but can’t because of the offered salary and so on. This obsession that if we don’t go for the max, we aren’t doing anything is wrong in my opinion. Retirement also look very different for everyone, for some 40k a year is more than enough, for others 80k is not worth leaving work.

A great book I recommend is “The psychology of money”, it changed my view on investing completely. Happy 4th of July and have a great weekend! Remember, we all start somewhere, but how far we go depends on us

I have been 100% in SWPPX for over 11 years now and was thinking of doing a 80/20 split SCHD/SWPPX going forward while reinvesting the dividends but was told I would be missing out on growth, but my understanding is the quarterly dividend payouts would make up for that by providing income without having to sell shares in the future. I also plan on divesting out of SWPPX into SCHD just before age 62. Any thoughts, input appreciated.

Today, My dividend growth Account is up 0.81% while the market is down.
I also received seven dividends the last three days.
Disappointing having such cash flow 😂

I obviously should sell all of my holdings for VT and BND. BND is currently at 0.2%, I’m sure it’ll be along any minute to show us how great of a hedge it is.

Focus on growth fellas so you don’t get owned by the BogleHacks and LeanFired club!

I’m somewhat active in leanFIRE subs (got banned from FIRE sub for arguing against the 4% rule LOL) and recently made a post about retiring, not about investing and just wrote that I’ll be getting ~5.5% of dividends from my brokerage.

The first comment I get is a guy telling me that “maybe you could do it if you got rid of your dividend stocks and put it in VT.”

The best part of it was the super snarky “although you don’t have enough assets to do so”

So tell me, my consistent, reliable 5.5% dividend portfolio (no cuts from any holdings EVER save for I think ARCC that lowered their divs by a small amount during the GFC) pays me enough to retire comfortable. Why in the FUCK would I sell that, pay cap gains, and sell off 4% a year to make LESS income AND be told I dont have enough assets?

Am I retarded? Or is this guy retarded? I’m pretty drunk but I’m pretty sure he’s a dumbass

As you can see the accounts value has outperformed all the benchmarks while I use the dividends to fund my early retirement.

Hello, I was looking over one of my accounts and though I would share what 6 months YTD forced dividend selling has done. $35,000 of dividends YTD $70,000 yearly (forced sells aka dividends)

I don't understand how is my dividend account growing and beating the market 6 out of 6 years while I live on dividends in retirement. Whats going on? Everyone says dividends are forced sells and its impossible for so many on reddit to be wrong right?

They are trying to hard to crash posts on dividends sub and here that is it hilarious. It reeks of jealousy and coping.

Well time to go back to Door Dash and Amazon Warehouse sweatshops, they are calling for you !

Just one market crash and you get laid off then these Boogertards will be back at zero ! LMAO.

🤡🤡

Looking to create a income portfolio to hopefully start paying some of my bills one day. Something to complement my other investments. Would love to start working part time and spend more time with family. I have about 200k to allocate towards income but I need something I can be confident in long term 30+ years. I already have some schd, dgro, and vymi. I was thinking maybe some adx, utg or divo/idvo or O. I was also looking at pff, and jaaa. I’m trying to get to somewhere around 6% yield. That would pay a lot of my smaller bills after taxes. I’m just wondering if anyone had any advice for a sleep easy at night income portfolio.

TLDR: looking for 6% yield on 200k that I could feel good about for a 30+ year timeframe

THANK YOU!

Hello all! Now that I have a better paying job, I’m willing to try dividend investing again.

What’s the best dividend stocks to invest in at this time? Also what apps to use since Schwab only lets you buy whole stocks not part of a stock and slowly build it up?

What's with the sudden surge in BDCs? Planning to add tomorrow with my divs from today and they all went up a ton. My TRIN
position went way past its 52 week high. I almost want to trim some to buy more MAIN and ARCC at lower prices.

What is going on in the BDC space right now?