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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Debt Free who wrote (3888)	2/23/2010 10:48:10 PM
From: Steve Felix	Respond to of 34328

< Thanks to all for a great thread and the healthy discussions that we have been having. > Ditto for me. I want to thank you and the others for the discussions of options. I think it is slowly sinking into this hard head. More reading / studying before I try it though. Somewhere way back on the thread I made mention of SS and the wifes pension being akin to bonds. In the original thread header I mentioned having laddered CDs to assist each year from when the wife retires ( she gets a pension, I don't ) until SS kicks in. In essence, we'll be spending our "bonds" while continuing to build stocks and dividend income. The way I look at it is that SS is just starting early, funded by the wife and I. Our combined SS, at current rates, if we both make it that long, will be 20% larger than the CDs slated for each year, so if we make it that far we'll be fine. I'm sure it isn't the way many would go about it, but it puts a whole new light on the "if you will need it in five years" rule. I'm not planning on ever needing it, but if I do, I'll have dividends to spend before I would be forced to sell stocks. Even in a worst case scenario, being forced to sell one or two positions won't stop the income stream, just make it a little smaller.

To: Debt Free who wrote (3888)	2/24/2010 9:14:43 AM
From: chowder	Respond to of 34328

I agree with you. There are better options than bonds for income. They are fixed and therefore may not even outpace inflation. This is the concept that caught my eye about dividend investing and the reason I believe people should start it a lot earlier in life. By focusing on quality stocks that pay high yields, you can build an income, never sell the stock and have that income increase year after year. Capital gains come and go if you don't sell properly. Once a dividend is paid, you don't give it back. You build something! I've talked with several people who focused on capital gains, were ready to retire this year and couldn't because the market socked it to them in 2008 and 2009. They had to put off retirement. If they had gone with the dividend investing for income approach, it wouldn't make a difference what the market did as long as the dividends keep coming in. When I look at dividend payers who have increased dividends every year for over 25 years, they have been through every up and down the market has thrown their way and they continue to earn profits and share them with shareowners. The share price may look like a roller coaster pattern, but the dividends kept increasing which in turn gave shareowners a raise every single year. What more could one want in retirement than an income that is steady, reliable, predictable and rising?