The Mystery of Dividend Preference

Not the model presented at the start of the post. With DSSP you buy at market (or slight discount) and would be paying the 125% of assets.

When you can sell every dollar for $1.25 on the market, well...

 

@dunno didn’t your mum teach you that it’s rude to ruin some elderly folk’s good stories regardless of the facts. Disrespectful to geriatrics and surely deserving of a good spanking:

 

I'm saying nuffen - which I just have.

 

He he. Well if you saw 99% of the other images I found when searching.

 

Sorry, I'm not sure where the 125% came from. DSSP is more effective in high tax environments.

 

Some light reading

The Dividend Disconnect

Samuel M. Hartzmark and David H. Solomon

 

3rd post in by dunno, Berkshire's 2012 letter.

 

I watch the total number of shares. Unfortunately after reading a comment somewhere about buying shares in round numbers I have become obsessive compulsive in trying to round up the share numbers to the next 1,000, 5,000 or 10,000

 

Good Lord, selling shares? It’s been such a long time I’ve sold shares that I’ve forgotten how to do it.

Laziness is bliss. For the last few years as I routinely go away for long periods of time I’ve probably checked my portfolio less than a dozen times. Nothing to report, all dividends normal, sleep well.

Only irritation: my platform has changed its layout while I was away. Damn, can’t find my usual numbers, where have all the shares gone, ahh… dividends still hitting the account, must be OK then.

 

More blasphemy from the dark side. Came out about the same time @dunno created this thread. It’s a conspiracy I tell you. Be afraid, very afraid:

Dividends Don’t Matter As Much As They Used To

 

I keep telling others retirement can be damn stressful at times.

Howdy @truong. Good to hear from you again. Given we haven’t heard from you for awhile I assume you been hanging out in the hut again?

 

Thanks mate. Very quiet days spent in my hut. No mobile, the only distraction being the dog next door coming everyday to eat with me.

Back in Oz now, I can see the forum is going well, this section in particular. Good spirit, knowledgeable commentary… a special community.

 

https://www.google.com/url?sa=t&sou...FjAAegQIBBAB&usg=AOvVaw331G8Tdbr-ctHl4mBWQ8bx

New podcast from choose FI, interesting to get your thoughts @Falcon, @Nodrog among others....... listened to it around 1.5 x speed.

 

From the link

 

Always great to have you back. Been enjoying more serenity myself nowadays. Getting back into the habit. Even a little of the secret sauce for 20 minutes or so twice a day can have an amazing effect. So much so that my wife says I’m a totally different person (for the better) when on the secret sauce. And no that’s not the home brew. I think the home brew is still important though in helping to achieve that magnificent Buddha like body shape.

Not sure if you know about him but I have been a fan of Ainslie Meares teachings for decades which Ian Gawler practiced early on and is still taught by Pauline McKinnon. No mantra / breathing / concentration techniques, no striving, no religion but simply stillness of mind.

I’m a rank amateur compared to you but even the smallest amount of time spent on “naturally” achieving peace of mind is time very well spent. Just like share dividends the accumulated benefits will be there when you need them the most.

 

Thanks for the tip. Our local library has a 2013 book by Ian Gawler, I have just ordered it.
Marg

 

Key point is:

I’m sure some here think us geriatrics are too silly to understand total return vs dividend investing. Loose use of terminology often confuses and I’m as guilty of this as anyone. Then again our arguments are lost on others at times. But doesn’t matter, whatever gets the job done.

I only skimmed the linked article. Appears to be aimed at direct shares for dividends. Not for me, all too hard. The older style LICs achieve this objective for little cost. Their investment philosophy is generally along these lines taken from AFI:

Personally I’m happy to own low cost dividend focused LICs as they have met my objectives over a very long time. Couldn’t care less if they underperform the market or not.

I suppose I’m one of those who takes Bogle’s approach of investing in broad index ETFs for income but choose to also invest in older style LICs which tend to hold dividend paying companies. Bogle suggest this increases overall portfolio risk. Perhaps so but can’t say I’ve noticed it. Can’t complain about the end result.

 

Some very interesting discussion during the podcast about investing in divs and whether you are beating or at least matching market returns. I know you dont give a rats what the market return is as you want income. Very interesting podcast for sure regarding total return v dividend income.

 

Funny @Nodrog that in the same post you mention both serenity and share investing.

Teachers of meditation often say a serene mind is like being the ocean, undisturbed by the waves that agitate its surface.

Well, dividend investing is a bit like that. Whatever the market does on the surface on a daily basis is the least concern to you as you get your nourishment from long term undercurrents.

Not saying that action isn’t necessary at times, just that there is a balance to be achieved between peak performance and peak inner comfort.

 

Fantastic stuff as usual. Having you here is like having our own teacher in “Zen and the Art of Investing”.

As per your above comment this is why I’m such a huge fan of dividend investing as it significantly helps the investor to ignore the scariest aspect of the sharemarket being capital volatility.

You’ve managed to distill into a single sentence what I’ve spent hundreds of posts here trying to convey to readers over time.

Another wonderful aspect of investing for dividends.

Not only laziness but for anyone who has experienced a long period of severe ill health having the dividends coming in without any action required is huge peace of mind.

Finally don’t forget your partner if you’re no longer around or incapable of dealing with the investments. Selling decisions and using an online broker might seem easy for us here but for one’s partner this could be totally foreign and very worrisome. Grieving for the loss of a partner can take some people a terribly long time to deal with. Continuing to have those dividends magically appear in the bank account with no action / decision making required, especially in terrible times, offers peace of mind that words can’t describe.

This is how I’ve planned our investments so that should something happen to me, my wife who has no interest in investing can get on with her life knowing that the income will continue up to flow into her account without her needing to do a thing! Priceless!!