Avoid the feast or famine with dividend growth investing
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- Опубліковано 4 лют 2023
- What I love most about dividend growth investing is you generally don't get extreme volatility that comes with investing in the stock market. When I first started investing in the stock market, it was very intimidating because I stressed about buying at the perfect time and selling at the perfect time. When the market was up, I would feel like there was a feast and when the market was down, it would feel like there was a famine. With dividend growth investing, you avoid the feast and famine that comes with investing in the stock market. This allows me to control my emotions and focus on the simple path to wealth with dividend growth investing which in my opinion is to buy SCHD/DGRO, buy as much as you can whenever you can and hold them forever.
Feast or Famine Investing 4:29
Dividend Growth Investing 12:38
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#DividendGrowthInvesting
My take on the simple path to wealth with dividend growth investing is buy SCHD/DGRO, buy as much as you can whenever you can and hold them forever.
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Dividend Reinvestment Calculator:
docs.google.com/spreadsheets/d/1W8UvXLZdEpVX-UPTKiHIT1oYIkj7Omvf30FgB3FTKWY/edit?usp=sharing
What’s the difference between SCHD and DGRO? Should we buy both or just one?
@@certifiedfinest5065 This is a very good question! I'd recommend watching my last video where I talk about exactly that! ua-cam.com/video/XOZ0DRuJsME/v-deo.html
Hi jake,love Yr channel..been following for a few months..just a question for .u have suggested schd and Dgro..can I add on another sphd (monthly div) or spyd for higher dividend growth..tks and hope to hear from u soon..tks.
@@kakashikun3996 100% you can! The idea of the simple path to wealth is that is all you truly need. You can go above and beyond that, but it is not necessary (in most cases).
The peace of mind that comes with dividend investing (especially dividend growth investing) is huge! I love not having to worry about short term market fluctuations.
You hit the nail on the head! I'd love to see economicsts add a measure of emotional benefit when looking at the discounted cash flow model.
I can vouch for the thesis of this video from personal experience. In October 2021, I established a Roth IRA consisting entirely of dividend growth stocks (including some SCHD). I fully funded the 2021 tax year by last April. The 2022 tax year is on the verge of being fully funded. I have about a 5% unrealized capital loss on the value of the stocks, but with dividends (reinvested of course), to date (through February 3,2023) I am up 1%. Not a bad outcome, considering what’s happened to non-dividend payers over the same period.
Thanks Jake! Always look forward to your videos. My father's approach to investing ( for income) enabled him to live off his dividends for 30 years of retirement. Wish my father was here to show him your dividend calculator. I know it would put a smile on his face especially when I recall him using a pencil, paper and a hand held calculator!
He’s 100% correct. Especially since Im retired I only buy dividends paying stocks. My average dividend is 3.7%. When the market goes down I’m still collecting dividends. When it goes up I’m still collecting dividends. One last note dividends are always going up. The eight wonder of the world,
Truly the 8th wonder of the world!!
Excellent video and spreadsheet. This is a great reminder that slow and steady wins the race. Thank you very much for this resource and also the reminder on the long term picture. This is a perfect video for the new investor to understand compounding wealth over time, which is the goal. Let your money work for you (i.e., work smarter, not harder)
Hi Jake - here in Europe we don’t have DGRO or SCHD. What do you think of VHYL instead (FTSE All World High Dividend Yield)?
My simple portfolio is 70% SCHD, 20% SCHY, and 10% Realty income (O).
I'm a new young investor. thank you for the amazing wisdom. Your content is the best.
I always look forward to your videos on Sundays, especially during these turbulent economic times when Monday can be a blessing or a bloodbath in the stock market. Thanks for your rational and informative content!
I'm so glad that you enjoy my videos!! I really appreciate you taking the time to comment that!
Very motivating! Dividend investing in DGRO/SCHD is my future ☺️. Love the dividend calculator also.
The simple path to wealth!! Happy Sunday Troy!
That Dividend Reinvestment Calculator worth a million $$$🔥.. Have a great week Jake 🤙🏽
Thanks man!! lol I will never forget my wife's face when I showed it to her for the first time. Most motiviating thing out there if you plan to retire off of dividends!
Love the vid of you jumping in the lake 😍
These clips are gold.
Yes! My Sunday DGI Fix! Hey Jake, after we spoke last month, I decided to go back and start at the beginning of your channel. I'll have you know that I now have an M1 account based on our chat and all your early work! Besides all of the Review My Pie videos, I think I've seen nearly every other video now at least once, and the picture is becoming much clearer. I appreciate the reinforcement of "The Simple Path to Wealth" last week, and the tie-in to this week's video with the calculator. Though I also feel with all the other learnings here, that I now understand what I'm looking at/for to create some satellite holdings, too. Thanks for all you do!
Hey Robert! When I started this channel nearly four years ago, I never thought that I would be able to meet people like you. It was so great speaking with you! Thank you so much for all the kind words. At the end of the day it is all you! You are the one taking action from what you are learning!
My investing was focused on building enough cash flow to cover my minimum bills. When I reached that I was functionally retired. I am now growing my monthly cash flow to cover my wants. Because I was focused on cash flows I wasn't paying attention to gains. As an example, I was shocked to see how much my 401K, which is invested in an S&P index fund, had grown to in January.
Hey Kevin! It sounds like you are talking about fat and lean FIRE. I can only imagine how much stress went away in your life once you reached a point where your cash flow paid for your living expenses!
That first clip was HILARIOUS!!!
I prefer a very set in stone plan with a certain percentage dedicated to index funds, another piece of the pie for blue-chip dividend stocks, another for growth stocks, another for ETF’s, another for more risky small cap stocks, and a big piece dedicated to just Berkshire Hathaway. The tricky part is to be diversified and yet concentrated. I figure just having a set plan and sticking to it with the same amount every month works for me.
I really like that approach! Because there are so many different opinions and strategies, I tend to address a broad audience in my videos. I personally follow a similar approach to the one you described. I call this the core and satellite approach to investing - in fact I made entire video about it here: ua-cam.com/video/2rwM9H2-hnY/v-deo.html
Your portfolio is goals, your allocations and stock picks are *chefs kiss!*
now that I like!!
Thank you so much for the great video!! Every time I watch your video, I learned more and more. I share with my coworkers and they loved it.
Thank you so much! I really appreciate you taking the time to comment this and for sharing with your coworkers!
What dividend stock are incredibly good at is investing in "uncerain" markets. I am from Poland and I have 4 exceptional businesses (in form of stocks) from Poland, 4 of them pay dividends. This make sure that I am protected from unrational behaviour of Polish stock market, because they go to as low as 20% dividend yield (which is high, but I try to buy in cheap), on the other hand I can take advantage of that and buy in when they are so cheaply priced.
Always a great video. Any chance you have looked at EMR as a hold forever with a good dividend?
Yes I have. I like EMR. Slow and steady grower
I keep track of quarterly dividends which are reinvested. It’s nice to look back and see how the dividends have grown. Each year my investment income is going up.
I’m blessed to have these investment.
Thanks Jake for your weekly videos, I look forward to them.
The best thing is you can see them grow each month and that is really motivating! Thank you so much! I always get excited when I see your comments!
complete novice in 40s have 5k and 1k a month to invest what 3 ets should i invest in for 10yrs also am investing in individual stocks i like,thankyou great vids btw
I really love dividends.
Best thing since sliced bread!
I don't think the math adds up here. The account total would be just under $2 million at year 30, but the dividend is 250k. That's a super high yield. Your dividend growth can outpace the capital appreciation for a few years but it is not realistic over longer periods of time. Love the content though
Can you share why DRGO gets you excited ? It’s a lower volume traded fund. Moderate yield. Low share price is nice but I dunno… I’m not feeling the sizzle. But maybe that’s the point .
I don't have famine, but I do feast and fast. You should always do both. And I collect dividends!
Well as long as it is by choice and you have a plan, there is nothing wrong with it if it works for you. I do like having a balanced approach of both with a strategy across different account types like a taxable and a tax advantaged account.
Just starting here.... question. If the stock price is not really our focus. Why not invest all in a high yield ETF like JEPI??? I'm currently investing 75% SCHD - 25% JEPI
Because of the rule of 72. The rule of 72 is how quickly an investment will grow. JEPI will grow much slower than SCHD over a long period of time. Now if you had a very short term time horizon of under five years, then yes JEPI is a great option. I can recommend watching this video where I talk about how to invest based on your time horizon: ua-cam.com/video/XOZ0DRuJsME/v-deo.html
Always so excited when Jake posts! Hey Jake what type of companies are best for a 20 year investing for 20 years?
Hey Nate!! Thank you so much man! When looking at companies for a 20 year time horizon, think about companies or industries that cannot be so easily disrupted. Think about goods or services that will be in demand today and 20 years into the future regardless of what is going on in the world. If you don't want to pick the winner or loser, you could go with a market cap weighted index so you win no matter what. My favorites are SCHD and DGRO :)
What are your thoughts on investing particularly only in ETF dividend stocks versus picking your own batch of dividend stocks? I like the diversification an ETF offers, but sometimes I feel uneasy as to the funds allocation into so many different stocks at the same time, especially when weighing which ETF is heavily relying per sector. It makes me want to add just specific stocks, but then I'm more exposed to that one stock, so frustrating! Lol
You should watch his video on "The Simple Path to Wealth Through Dividends". Jake strongly supports investing into indexed ETFs, even without even a single individual company and for good reason. It removes the single company risk that comes from individual stock investing.
Hey, i have i question, do you think a 19-year-old that plans on investing throughout their entire lives needs exposure to some of the slower-growing sectors such as industrial, energy, utilities. and instead, focus on the fast-growing sectors/ companies and add the slower-growing ones later on in life.
Hey Jake what’s your opinion if your company offers ESPP when dividend investing
Participating in your company's ESPP can be very attractive - but not always. I personally would read the small details regarding what price you are getting allocated as well as what % of a discount you are getting. Without knowing anything about your program, I personally think if the plan offers at least a 10% discount, it is most likely worth it. I would consider how long you plan on staying with the company and if you believe the price will rise or go down while you are working at the company.
@@DividendGrowthInvesting I think I am planning on selling it as soon as I get the stock and reinvesting back into my dividend portfolio. But worried about stretching myself to thin as I invest in my portfolio and move the rest into a high yield savings account
@@wallyy6223 yeah you want to be careful about not spreading yourself too thin
Great video as usual! Where can I find your dividend growth spreadsheet? Thanks. 🍻
Thanks for watching! Dividend Reinvestment Calculator: docs.google.com/spreadsheets/d/1W8UvXLZdEpVX-UPTKiHIT1oYIkj7Omvf30FgB3FTKWY/edit?usp=sharing
The biggest takeaway everyone should get is the impact of savings rate. Having a high income early in life makes the difference, more than compounding, if you want to have a high enough amount of dividend income early enough in life to enjoy it.
Build marketable skills and get your income up as fast as possible. Don’t go into debt for anything other than real estate. Drive a very affordable car until you make your first $1M. Keep the big 3 expenses low relative to your income (housing, transportation, food). It’s doable, but it isn’t easy. And it’s nearly impossible on a low income without a painfully frugal existence of deprivation during the best years of your life.
Jacob- I look forward to these Sunday night video clips…
I will reach out to you shortly and connect pertaining to my retirement portfolio 📊
Hi Sean! It is so great to hear that! Thank you so much for watching!
High quality Stocks and ETFs that pay dividends = always feasting
ohhh i see what you just did there :D Dividend feasting inception
I just love you Jake
lol awww thanks
why do you prefer M1 finance over Schwab or Fidelity?
Mostly because of the dynamic rebalancing. It automates everything. I'm also a big fan of M1 Borrow.
Thanks for all your videos. Question for you: Is it reasonable to assume that 12% dividend growth can be maintained for 30 years? Keep in mind that companies will come and go from these funds. If you backtest the last 30 years (if that is even possible) have the dividends grown at 12% to today's 2.68%? I'd like to see your example with dividend growth that matches inflation as a worst case. Putting 4% div growth into your speadsheet shows capital appreciation would outpace the dividend and the yield would end up much lower over time. So that can't be right either. For the sake of argument, I extended your spreadsheet at 12% out to 100 years. In year 100 the dividend would be 48% and the portfolio value would be 293 trillion dollars. I just don't see that happening.
Hey Patrick! The answer to your question is it is impossible to know for sure. We can only use the past to guide us going forward. I didn't include taxes or inflation in this calculator, so depending on that as well, it is impossible to know for sure what the real return will be 10 years 20 years or 100 years from now. The growth of these ETFs I am talking about really depends on the United States and the global economy growing. If the world becomes less productive and earnings decline, then no a 12% will not be sustainable in some years or decades. However, I would argue that human beings are resilient and over time (whether that is decades or centuries), we will push to become more innovative and product and these two ETFs are positioned to profit from that.
I'm sure Jake will have a better reply. But if you consider a dividend paying company's stock price increasing over time, so does their dividend yield to reward their investors. If the stock price went up without a corresponding dividend increase, the dividend yield would continue to be a smaller and smaller percentage. So, when you think about dividend GROWTH, it's the 12% increase to the 2.68% - even though it may not look like an increase in yield because the capital appreciation increased as well. Take the Dividend Reinvestment Calculator and enter $10k as the Initial Investment, with no annual deposits, and a 0% Capital Appreciation, and you'll see that snowball in action with the dividends reinvested. Look at some of Jake's other videos where he shows Yield on Cost on a stock in Seeking Alpha. That's the Dividend Growth - the Yield on your initial investment over time.
Great information as usual. But it sounds like you are anti-dividend investing for someone in their 30’s. Like the tax burdens aren’t worth it if you can’t have substantial dividends? I mean you gotta start somewhere? Unless you just mean to skip over REITs and the JEPI’s of the world until you are ready for retirement and then rotate into more of those types of holdings . Please share your thoughts :)
Love the video❤
Thank you!!
Love dividend investing but I don’t think piling everything into these etfs is the best choice. None of them have been around for a long time. The last 13 years really makes them look great, but that wasn’t really normal. Low to zero interest rate environment and every stock in their portfolio was a winner. If the market trades sideways for 5-10 years I think these etfs will be dogs. Obviously I don’t know what the future holds but a lot of assumptions are based on things in the future looking like the longest bull run in history and that’s not likely to continue.
The only thing I love more than dividends is Sugar Water.
lol
Married couples can contribute $1k a month across two Roth IRAs! Actually a little more with the recent increase.
Very true! Good call out!
NEW VIDEO LETS GOOOOOOOOO
yesssssssssss!!!!!!!!!!!!!!!!!!!!!! :D
@@DividendGrowthInvesting In future videos, Could you do smaller annual deposits in your calculator? 😅Because I'm at most just trying to get the ROTH IRA Max YoY... So these calculator numbers look insanely wild.... And maybe it's also better to utilize the calculator adjusting for inflation on the capital appreciation + conservative % for divy growth? Just giving my 2 cents.. Appreciate the chill content regardless =D
@@ImxxFuZe That is the challenge with addressing a broad audience on youtube. When looking at numbers, it will always be subjective. I really appreciate the feedback and will remember to include more income brackets in future videos.
I want to subscribe but a little suspicious. No buying power? Can you post your holdings?
I have a link to the companies that I own in the video description.
What sucks, if you're in a position similar to me, is that the amount you can put into your portfolio goes down year after year since there are no pay raises and the cost of living just goes up :\
4 years for up 5k with 700k?😅 does it better put it in the bank?
Why do you recommend the SCHD/DGRO combination instead of QYLD/JEPI combination? Doesn't QYLD/JEPI offers more dividends on a yearly basis?
QYLD and JEPI with only very little growth in future….😅😅😅
@@relaxmind5773 But isn't this dividend investing? What "growth" are you talking about?
Qyld while you get dividends you also get capital erosion . News is still out on Jepi, altho recently it has started to move upwards. Remember Jepi goal is 7 to 9 percent return with normal markets.
I have low dividend yield and high growth, in ten years I plan to sell the growth and buy the higher dividend etfs and individual stocks
@@paulvardon6653 But isn't 7-9% with normal markets very substantial already?
Oh the housing crash is just beginning...
Buckle up!!!
That calc can't be right. 700k a year lmao
If you are 20, you ain't got 1000 loose dollars each month
Well investing is all subjective and $1000 or $10 will mean something different for each person.
@@DividendGrowthInvesting I appreciate your video and sharing these thoughts with us tho! 1k is ideal for me but I recognize it's a progression
Love your vids bud, but they're about three times longer than they need to be
Then go get advice on Tik tok