Comments on: Review: The Little Book of Big Dividends

By: Wade1066

Wade1066 — Wed, 25 Aug 2010 14:13:32 +0000

Nicole’s comment made me hard. Yes, dividends are very exciting because it’s money and you don’t do anything extra… the work was already done.

Yay for Nicole!

By: Mike

Mike — Fri, 18 Jun 2010 19:22:07 +0000

I love individual dividend paying stocks! I frequently read the Dividend Growth Investor Blog. If you want to learn more about dividend stocks this is a great start. I hope to achieve my financial independence by growing my dividends ehough to cover my frugal lifestyle. Here is the web address if you are interested: http://www.dividendgrowthinvestor.com/
Full Disclosure: Long dividend paying stocks and no tie in to the blog (I just really like it).

By: Nicole

Nicole — Fri, 16 Apr 2010 02:21:55 +0000

Yes, I know that there’s a trade-off between dividends and stock prices, and it’s good to drip so long as you rebalance.

But today is April 15th. Yesterday and today I got all the dividends from individual stocks (from back when I was a naive young investor and my only ETF was QQQ — I don’t drip them because I don’t want to unbalance things) that put out… I just have to say I LOVE dividends. Love love love getting money that I didn’t have to do anything to get except save money and put it somewhere. It makes you think… if I can get ~$700/quarter (when times are relatively good) from the not so huge amount I have invested currently, how long would it take me to get enough that I could live on it without working?

Yay profit sharing! Yay dividends!

Thank you. There’s not many people I can share that with without people getting annoyed. I hope you all understand. :)

By: Lexi

Lexi — Tue, 13 Apr 2010 01:30:21 +0000

Trent it seems I could really use a vocabulary lesson. I know that most of your readers probably don’t, so could you (or any readers) suggest a good source for investing terms?

For example, I didn’t know what a growth company was (I did a search and found a definition, which led to more questions)and although I haven’t done an exhaustive search just yet, the sites that I have found have more terms that I’m not familiar with, which leads me on quite a long road for answers.

Any suggestions are greatly appreciated, thank you!

By: DiscoApu

DiscoApu — Tue, 13 Apr 2010 00:18:19 +0000

Look at DVY, you will see what chasing yield gets you. Also using a DRIP eliminates your free lunch(diversification) Most of the comments above are spot on. George also forgot to mention CEFs, Prefs, and munis. If you absolutely wanted dividend yield, look at funds/etfs that dont overweight in one sector.

Finally, be very careful with international stocks, they have different tax rules then the US. For example, for german companies you have the tax removed from the dividend before you receive the payment. Then you get taxed again by the US for the remainder of the div. Each country is different.

By: GayleRN

GayleRN — Mon, 12 Apr 2010 15:19:43 +0000

“Let’s dig in”

I am pretty sure every book review Trent has ever done contains this phrase. Maybe he uses a template. It has become a game to me to find it. He never fails me.

By: Beth

Beth — Mon, 12 Apr 2010 12:09:18 +0000

“some common traits that companies that offer dividends have in common”–I wish all ‘professional’ bloggers would pair off and trade proofing services.

By: Daniel

Daniel — Mon, 12 Apr 2010 10:47:14 +0000

I definitely would emphasize the advice to not get blinded by yield. And don’t let the idea of patiently collecting dividends distract you from the basics of carefully reading a company’s financial statements and thinking about a company’s future prospects before you buy the stock.

There’s a famous old saw in the investing world: “More money has been lost by investors reaching for yield than at the point of a gun.”

It’s pointless to get excited about a stock with a seemingly high yield if that industry is about to go through a downcycle and the company cuts the dividend. One thing we learned from the banking crisis, for example, is that those seemingly rich bank dividends can disappear AND the stock can plummet.

That being said, there is nothing cooler than collecting a bunch of dividend checks from a portfolio of stocks. It’s a great way to earn passive income.

Dan
Casual Kitchen

By: deRuiter

deRuiter — Mon, 12 Apr 2010 10:23:22 +0000

I forgot! Buying DRIPS direct through a company OFTEN involves a fee each time, which is not the case with a discount brokerage. The company fee eats into your profit each month or each quarter the dividend is reinvested. Plus the ability to sell immediately vs the cumbersome dealing with the company to sell does not allow you to maximize profit by timing your sale of the stock. I don’t care if you’re a “buy and hold” person. When stocks get to a dizzying height, sell and take your profit. Stocks are cyclical, they go up, they go down, buy low, sell high. I’m not suggesting day trading, merely stating the obvious.

By: David/yourfinances101

David/yourfinances101 — Mon, 12 Apr 2010 09:10:50 +0000

This book looks like it would be a very good read. I especially like the decription “tight and informative”. This kinda tells me it gets right to the point.

I am fairly knowledgeable on the subject, but it sounds like it would be useful to me as well.

By: IASSOS

IASSOS — Mon, 12 Apr 2010 03:19:40 +0000

Suppose you buy a stock that pays a 6 percent dividend. Now suppose that stock goes up 30 percent. Do you sell? After all, you can immediately gain 5 years equivalent dividends!

By: George

George — Sun, 11 Apr 2010 23:52:58 +0000

There are many paths to income investing with publicly traded securities and one should explore them all since they have different capabilities and tax consequences: stock dividends, master limited partnerships (MLPs), royalty trusts, real estate investment trusts (REITs), business development corporations (BDCs), bond funds, and individual bonds. Most books only cover stock dividends and ignore the rest of the publicly traded possibilities, to the greater detriment of our financial knowledge.

Also, few if any, books cover evaluating whether a stock that pays a 3% dividend and increases that dividend by 3% annually is a better choice than a stock that pays an 8% dividend which never is increased… which should you choose and under what circumstances?

These are the things that investors should know rather than the generic advice “buy shares in a DRIP and cost average your way to riches”.

By: Kirk Bond

Kirk Bond — Sun, 11 Apr 2010 22:05:01 +0000

I love dividends! So does our government and one concern going forward is that increases in dividend taxation rates in the near future make these stocks potentially less valuable as time goes on to many investors. This has the possibility of decreasing the sale price of the stock. Caution is in order unless Congress realizes the detriment such policies have on stock prices.