My favorite dividend investing methodology
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- Опубліковано 2 жов 2024
- The core and satellite investing methodology is widely known when it comes to index investing. I personally really like this investing methodology because it takes away a lot of the risk that comes with individual stock picking. I strongly believe most people should consider the core & satellite investing approach or something similar. I subscribe to the notion that simpler is better.
My recommendation is pick an index in which you believe in and dollar cost average each week and month. My favorite indexes are the Dow Jones U.S. Dividend 100 Index (SCHD), FTSE High Dividend Yield Index (VYM), and Morningstar® US Dividend Growth IndexSM (DGRO). If you have a very long-term time horizon, for example 40+ years, I would suggest considering having the S&P 500 (VOO) or Total US Stock Market (VTI) as your largest core holding.
(1) Vanguard's guide to Core & Satellite investing 3:05
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(2) Sample Portfolio ideas based on time horizon 8:43
Core & Satellite 5+ Years: m1finance.8bxp...
Core & Satellite 20+ Years: m1finance.8bxp...
(3) How I use the Core & Satellite investing approach with my portfolio 16:33
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I'm not a financial advisor and the content discussed today is merely my opinion and intended only for your entertainment. The content expressed in this video should not be considered as professional financial advice. Some of the links above are affiliate links and come at no cost to you.
#DividendGrowthInvesting
The Core & Satellite investing approach makes investing so much easier and most of all less stressful.
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Dividend Reinvestment Calculator:
docs.google.com/spreadsheets/d/1W8UvXLZdEpVX-UPTKiHIT1oYIkj7Omvf30FgB3FTKWY/edit?usp=sharing
Hi from Slovakia 🇸🇰 👋 I would like to send you my portfolio and see what do you think about it. Really curious, what's your opinion. Where I can send it to you please? Do you have any email address or FB? (I do not have Instagram 😂) thanks
Having a process is so important. That's the only way of being consistent over time.
Jake good stuff here. You are a teacher and explains things well. Thanks.
I’ve always like dividend stocks for the simple reason as I control the Capital Gain. As CPA I see clients that have mutual funds, they have to pay out the C/G at the end of the year. In ‘21 those distributions were high and most have them reinvested. I do drip my dividends and invest monthly in my Simple IRA and most of those are in index funds.
I do keep stats on my portfolio and it’s nice to see the dividends and portfolio grow.
Hey! Thank you! Yeah the capital gains can be insane with some funds. One of my favorite parts about dividend investing is seeing it growth each month.
I really like how you present information Jake. Thanks for sharing!
thanks man!!
Quick question. If I want to build a dividend portfolio in a brokerage, how does this affect my taxes as I'm investing but not taking dividends yet because I'm just trying to grow it over the next 15 years.
I learned a lot in this video.
I live in Austin, would love to grab a coffee and pick your brain sometime on where I should start. I binge your videos, pretty sure I have a base grasp on it all (or core and satellite approach).
Thank you, hope you see this.
Hello Jake. I am new to dividend investing. I just started to watch your video about a month ago. I try to watch your video as much as i can. There are a lot of great information in your channel. Thank for your efforts and time for sharing such great information with us for free.
hey there!! So glad you found the channel!
My dividend investing methodology: Passively manage my active portfolio and actively manage my passive portfolio.🤣
Why not adjust the amount in each holding so that you get nearly the same amount each month on your returns? I run a spreadsheet that has color codes in each cell depending on the type and month of the dividends. Light grey for monthly, Blue for Jan-Apr-Jul-Oct, Orange for Feb-May-Aug-Nov and Green for Mar-June-Sept-Dec Red for Annual and pink for Semi Annual. I can see how much I'll be paid each month and can adjust my holdings to even out the projected income. I'm getting very close to retirement so this method works great for those on fixed incomes in retirement.
As soon as I turn off the DRIP, i'm looking at between $1,200-$1,500 each month. If I so desired, I could sell a few from the $1,500 month holdings and buy more of the $1,200 month positions to even it out more.
This Core/Satellite concept is how I have my portfolio setup for retirement in 11 years. While it provides a decent dividend (~2.2%), it also has a good amount of growth and blue chips.
Core: 50% of portfolio
-SCHD 50%
-SPYG 25%
-VOO 25%
Satellite: 50% of portfolio
-AAPL 11%
-MSFT 11%
-SBUX 10%
-TGT 10%
-KO 10%
-COST 10%
-HD 10%
-BAC 7%
-WMT 7%
-WM 7%
-MCD 7%
look at that!!
Huh, seems I've been doing this approach since I started investing without knowing that there was a school of thought behind it. My "core" is actually a pie of the S&P500, Nasdaq, VYM, and the JEPQ income ETF that have an equal weighing. Then I have a few (major) satellite pies which include individual companies and REITs, followed by (minor) satellites which are thematic ETFs. Honestly, I really need to look at condensing the thematic ETFs into just a few individual holdings since there is a ton of overlap, not too mention I could avoid paying the fees too.
Great video Jake 👍👍👍
Thanks, Jed!
Honest question here, would you still hold schd even if you held the individual stocks at the same weight? Essentially, if you made a proxy schd by setting the allocation of individual stocks the same as schd's criteria? I never really saw the point of adding a fund when i already hold the majority of the companies individually. I'm not personally trying to match schd exactly, but it's similar, and it feels redundant to also invest in schd.
I would never hold 100 stocks and it would be a pain to always rebalance the portfolio to have it track the SCHD index. I'd much rather focus on SCHD/DGRO as my core and have other individual stocks at a lower percentage.
I love this strategy. I like the idea of my satellite holdings as individual stocks focusing on higher income/ div growth. And my core being (SCHD + DGRO)
currently I have PEP, ABBV, EPD & MO. Open to any suggestions!
Just keep the satellites at less than 5% each for individual stocks and you are doing great!
His “funny gif memes” are how you know he is both a millennial and a dad
SCHD and VTI are my core
Same here!!
How do you escape the matrix?
Dang it Jake, I bought O and VNQ on my SEP but im at the 20 yr horizon. You recommend o for 5 years. Would much rather add voo now
Welcome to the everything is on sale time in the market :)
@@DividendGrowthInvesting lol, it did hit a 52 with low when I bought it
Great video
Thanks for the visit
Hi Jake
What are your thoughts on VTV as a core holding? It can be considered as part of an dividend portfolio.
Hey! I like VTV as a core holding. You could look at ETFs like VUG, SPYG, VGT to add additional growth.
spreadsheet? might already be in the comments...searching...
What I don't understand is your advice for JEPI don't hold it more than 5 years? This seems like bad advice for any divided income strategy.
If the company is solid and stable and paying solid divided hold it 4 life if you want.
Also I'd add prices may not move as much as traditional investing but they still swing $5.00 or more dollars a year and because of this you can dollar cost average just by buying the deeps.
Hey Steven! What I am saying is in my opinion don't invest into JEPI if you have 5 or more years before you plan to live off the dividend income. The reason for this is primarly around the growth rate of JEPI vs other equity ETFs like VOO, VTI, SCHD, DGRO etc. Also the taxes play a role as well but not as much as the total return aspect of what I am talking about here.
Ok I think I understand better now. What if a person is generating $2,000 a month from it? Those numbers aren't difficult to reach with plays like this. And for the majority that is almost a monthly NET Paycheck.
Would you still advise against?
Some of my risky satellite positions announced to cut their dividends, so I exited those positions. Was able to average down some core positions.
SUBSCRIBED. Thanks for keeping it real
So glad you enjoyed it!!
Would something like this work in a roth ira since $6000 is the max contribution a year? I have a roth 401k through my job and using the 3 fund portfolio approach for that but I wanted to open a roth ira through fidelity and use it to try to get a dividend income from it. By the way I'm 37 so I'd be 38 before I would be able to start maxing out the fidelity roth ira.
Since I'm a lunatic I'm building my satellites which will fund my core, theory being that I'm rounding out my income with higher yield stocks then switching to etf's which generally pay less to stay under problematic tax burdens.
yeah that tax burden is what is high on my mind as well. I need to be careful how much I add to my REIT portfolio and those CC ETFs.
@@DividendGrowthInvesting i have a LONG way to go before it's an issue, but it's nice to have a plan and options to make sure it doesn't become an issue
That’s awesome that you can get that spreadsheet with SA. That’s a great tool. Thanks for the video!
Thanks for watching Ethan!
Hi Jake - I plan to reach early retirement at 55. I’m 34 and am setting up an account. Should I set this up in an after tax account or IRA? Between my wife and I, we have a little over 400k thus far saved for retirement. Our savings rate and return will let us retire comfortably between 60-65 and would use this new account for potentially retiring earlier. Thanks for your help
Hey Justin! Well if you go with the IRA, you wouldn't be able to access it until 59.5. You may want to do a combination in a taxable account and a portion in your IRA. My wife and I are 36 and we funded our Roth IRA early and will have it on auto pilot and are now only funding our taxable account.
Thanks for the advice Jake!
And why would you NOT have a Roth IRA, LOL.
I love the video. You should make a discord!
Hey Chris!! Thanks man!
Excellent video and analisys.
Glad you liked it!
Let’s Go!!!!!!
There she is!!!!!!!!!!!
love this idea.
mine is currently set up with four cour
qqq
spy
schd
vym .
can't wait to see it grow over the years
some great ETFs!! Dollar cost average and enjoy the journey!
I've watched a few of your videos, and I've enjoyed the content, but I was finally moved to subscribe based on one thing: you properly used "indices" instead of "indexes".
Yeah it sounds weird saying it, but is correct :)
Woooo sub 700 view.
early bird!
Jake, the elephant in the room for me is, how do you plan on utilizing your dividend income? In other words, if you project to make $150,000 per year from dividends, what % do you project or will you target to reinvest?
I will be living my life paying my bills with the money. At that point, once we reach our goal, we will no longer reinvest the dividends.
If you are making 150K a year off dividends, congrats, youve already won the game :)
@@brucecampbell208 based on his projections it's not far fetched
Thanks Jake from UK ✌
hey!! Cheers from Texas!
Come on!!!!!!
:D
Jake! We love you, keep up the GREAT work brother!
Hey Michael!! Thanks man! Hope you are doing well!
Hello my man, I am planning my Portfolio and I am still debating about whether I want to use VTI or VOO together with SCHD in my Portfolio. What do you think? :)
I really like that I personally have VTI in my roth IRA as my largest holding and SCHD as my largest holding in my taxable account
Appreciate all the time u put into this a great video.
Really glad you enjoyed it! Thanks for watching!
SCHD is performing like gas station viaagra
lol
Do not miss Balmer. Not one bit.
Lol yeah he was something else
You need to keep these videos ten minutes or less. Break them into multiple videos!
Hello sir. Do you think it's possible for an etf like divo to dissolve in 30 or 40 yrs when the founder of cwp passes away. Since they're a way smaller player than say schwab, what happens to funds like that?
Way too hard to say. The only way is if the NAV of the fund go to 0 which is almost impossible.. If it does, you will be looking for food and water not what your investments are doing.
Jake what is your website or email to connect with you thanks Jake your hardwork