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Anybody into Dividend stocks?

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6:04 am
November 23, 2011


Aaron Hung

Member

posts 254

What are your thoughts on these stocks? are they good investments? Are you receiving good passive income from them? I have a 'few' shares in my brokerage account but haven't really been into it because been so busy. I like the fact that they are more buy and hold for long term. However I know I still have to keep an eye out too.

I just started getting into it this year so I have another tax question(last one, promise). Does Uncle Sam take a big bite out of your tax for having these stocks or any other kind of stock investments? I know they have raised the percentage they take out for 2011 if I'm not mistaken?

6:31 am
November 24, 2011


101 Centavos

Member

posts 216

I have a few dividend stocks, but they're all for now in my 401K. I don't look to them for passive income, merely as a way to reinvest dividends and grow the principal.

5:30 am
November 28, 2011


JP

Member

posts 45

Dividend stocks can be a great investment  for passive income or to build a nest egg.  It requires a bit more leg work staying updated on all the company news, but worth it imho. 

As far as taxes go in 2011, dividend income is taxed as normal income or if it meets the Qualified Dividend requirements it'll be taxed at 0% (if you're in the 10-15% tax bracket) or 15% (if you're in the 25% or higher tax bracket) depending on your current tax bracket.

This IRS page discusses the qualified dividend requirements.

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6:54 am
November 28, 2011


Hunter @financiallyc

Virginia Beach

Member

posts 707

I'm a BIG fan of dividend stocks. There's a few good ETF's that make diversification a little easier for the smaller investor: SDY is highly rated. Consistent dividen payers demonstrate excellent cash flow, and that is the best sign of a healthy investment.

7:35 am
November 28, 2011


Dr Dean

Member

posts 241

I like Dividend stocks in DRIP plans, I dollar cost average on the ones I like over time till I buy what I want.  Then I forget about them-not really, but certainly don't "trade" in and out.  Low cost way to build up legacy stocks.

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1:26 pm
November 28, 2011


Jeff @ Sustainable Life Blog

Member

posts 964

I live dividend stocks – I just dont own any because i'm trying to get out of debt right now.  I did ask for some for christmas though!

Jeff 

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1:28 pm
November 28, 2011


Miss T @ Prairie Eco-Thrifter

Member

posts 2213

We tend to use index funds but we try to find ones that pay dividends.

Miss T

"Helping you save money, go green, and have fun"

 

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1:33 pm
November 29, 2011


TightFistedMiser

Member

posts 361

I own some dividend stocks and get a few hundred dollars in dividends a year.  My ultimate plan is to have enough dividend stocks that I can live off the dividends.  It will be a while before I can make that happen though.

4:40 pm
November 29, 2011


retireby40

USA

Member

posts 1381

Dividend stock is a great passive income stream. I'm trying to move more of my investments into dividend stocks to help with my early retirement. I think dividend stocks outperform other stocks over the last 10 years or so too.

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10:15 pm
December 4, 2011


Larry @ The Skilled Investor

Member

posts 53

Valuations depend upon expected earnings not how those earnings are retained or distributed. The markets tend not to differentiate between dividend paying stocks, capital appreciation stocks, or stocks doing buy-backs, which is another way, in effect, to distribute a dividend without running it through a tax return. With the build up of corporate cash balances there have been a lot of buy-backs since the crisis and recovery.

 

Note that if you are going to skew your portfolio toward dividend paying stocks this will tend to skew somewhat toward larger companies. Also, think mutual funds or ETFs instead of individual securities, but don't overpay just because the fund is focused on dividends. If you are going to skew toward dividends, get and read the prospectus beforehand. Excessive costs are the major factor that drags down investor's net returns. If you can get index mutual funds and ETFs for under .25% per year, is it worth it to pay a significantly higher management to skew toward dividend stocks?

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2:11 pm
December 7, 2011


Sei Kitajima

Member

posts 7

Those are the ones that pay out money right?

6:25 pm
December 7, 2011


Mike – Saving Money Today

Member

posts 520

I love dividend stocks because they generate income without having to sell them off.  I just started a small account with Sharebuilder a couple months ago and set up automatic investments.  It's tiny right now but I'm just reinvesting the dividends and letting it grow for the long term.

Evan from My Journey to Millions has a lot of good posts on dividend investing, you should check out his blog.

6:06 am
December 9, 2011


Aaron Hung

Member

posts 254

I have mine at Scottrade, they don't have automatic dividend re-invest, that's what I don't like about them.

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