DRIP

nicotine20

Very loose assumption, but compounding at ~7% annual returns, it would double every ~10 years. You’re essentially an unrealized millionaire. Set and forget, just make sure to allocate and have DRIP turned on. At 31 -> 180k At 41 -> 360k At 51 -> 720k At 61 -> 1.4mm

jeff_varszegi

If you're going for yield specifically, which is just one component of performance together with share-price growth, an IRA is a good place to collect: * higher yields of all types * non-qualified dividends, e.g. from REITs and BDCs * distributions which are taxable as ordinary income and not deferred as return of capital Dividend holdings to avoid in IRAs: * Those which generate K-1 forms, such as MLPs, may be poor choices for an IRA as they may be subject to UBTI/UBIT tax * Dividends subject to taxes in a foreign country, which could be offset by the foreign tax credit if held in a taxable account * Yield traps, i.e. where the company is unstable, has an unsafely high payout ratio, the share price and/or NAV of the asset dwindles with payouts over time (paying your own money back to you), etc. In terms of a *good* yield, there are these main considerations: * Size * Safety * Floating vs. fixed * Some dividend payers, such as certain preferred shares i.e. of banks, "float" with inflation, presenting a good target for inflation hedging. * Dividend growth rate * Ideally the dividend growth rate is above the average projected rate of inflation, or at least roughly equal to it, thus ensuring that during the income phase your income is not at high risk of dwindling. * Share price growth rate * Since this is in an inverse relationship with yield for new purchases, to grow an income stream you want to stay away from high-cap stocks like AMT where the share price has outstripped the dividend. For someone with a longer runway to retirement, it might be appropriate to choose some stocks with lower starting yield but higher dividend growth. For someone with a shorter runway, the opposite might well be true; note that at a certain point a high enough yield would outstrip inflation, provide for safe withdrawal of some income, and still be able to grow a portfolio via DRIP even with a zero growth rate of the dividend payout itself. Putting that all together, since I tend to put higher and non-qualified dividends in my IRAs, and in the current higher-rate environment, assuming dividend safety, I would think anything currently sitting at 7% or above is a quite good yield.

jf-online

Bond fund, such as BND. Most brokerages allow you to DRIP to buy more shares automatically, so your monthly income grows as you get your monthly payments.

MotoTrojan

Much easier to do it with advance notice of the reinvestment period like DRIP than with live trading all day every day. Also not all brokers even allow DRIP to have fractional shares. Interactive Brokers will round down to nearest share and give you the excess cash.

AzEkogami

If DRIP just went over 9$ I might cream.

Working_Affect_6627

Merrill Edge manually sells your fractional Shares you get from DRIP a week after you sell all your full shares

Qel_Hoth

Surely they could reuse the same system that allows for fractional shares as a result of DRIP though.

AzEkogami

Hope DRIP goes to the moon this Thursday so I can sell them before the supposed bull run Friday.

IcyAdvantage7298

$AZZ down $DRIP up. That’s the way, we like $CUK

AzEkogami

9 DRIP Calls expiring Friday my regard brain knows if SPY down Drip up.

RetiredByFourty

I won't be selling a single share. Already set it to automatically DRIP and will be leaving it alone.

Psionichawk

You turn off DRIP for that investment, so the money goes to your balance rather then reinvested. The gold fee gets deducted automatically from your brokerage account. One caveat to this process is you do need at least 2k in your normal broker account to get access to margin. That's just the base rules. Assuming you have 2k and have RH Gold. The first 1k of margin used is at no extra cost. Currently a super safe investment is SGOV with 5.3%. Though you will have to keep an eye on the return rate. You take your 1000 in margin and put it into SGOV. (though you could throw it into any stock of your choice, I'm just giving the safest example) turn off drip for SGOV. Currently your 1000k is now returning $4.3 a month and you use this to pay off most the gold fee. Just let it sit in the broker account. A small deposit of an extra dollar per month more then covers the rest. If you put in some of your own money into SGOV, say $200 extra, then the whole Gold fee would be covered at the current return rate. In full discloser, There would a very small bit of taxes owed at the end of the year because of the dividend payments but it even so still very much helps reduce the cost of Gold to a fraction of the $5 per month For me, I personally have Gold, use the above trick and find it very worthwhile.

fledgling66

Symbol Total Gain/Loss Percent Of Account SPAXX (cash) 15.38% GOOGL 43.72% 12.90% VOO 19.87% 12.47% UNH -3.82% 9.67% VTI 18.06% 8.14% QCLN -22.69% 5.76% TSM 47.95% 5.56% TMF -26.00% 4.84% PARA -3.62% 4.34% DDOG 69.98% 4.33% BRKB 8.87% 4.31% CRSP -16.88% 3.70% XLK 0.43% 1.68% RSP 12.32% 1.51% ENLV -35.97% 1.49% BAC 42.02% 1.35% EWJ 14.50% 1.32% BN 29.93% 1.29% QQQM 0.69% 0.86% GRND 101.39% 0.84% SPMD 18.15% 0.58% MRK 63.72% 0.40% AVUV 27.35% 0.34% YNDX -0.70% 0.32% JPM -0.52% 0.23% DXJ 8.19% 0.20% VXUS -0.54% 0.11% I have a little system where I let ETFs DRIP, but individual companies I manually re-allocate the dividends into VOO. It is far from the set-it-and-forget-it portfolio I wish to have one day, but here's what I have in Fidelity. Also have a Roth IRA maxed out in a target retirement fund (2050) and about $10k in the bank.

No_Communication8613

You 100% accurate. It's possible the OP hasn't chased a special dividend stock. I did my first one that finished on 4/11. I had to keep the stock until the 11th to get the dividend, and the stock price difference was much further than I anticipated. It dipped 60% in value. I made money on the pumps from the special dividend announcement earlier on but the price dropped on the last pump, so I held and paid for it. Think maybe I broke even. (I didn't account for how long it would take my broker to pay out the dividend. Also forgot I had DRIP setup for my other stocks) Looking at this one, it will probably fall to $21 or below. Getting a 0.50 dividend on a 1.60 stock wasn't worth it, so I know a $2.25 dividend on $26 would not be worth it. Did you make money a solid profit on ZIM?

Fundamentals-802

It’s good that you’re looking at this objectively. Kids these days are lucky that they can get an account as young as they can. The longer you can contribute, the more you’ll have later in life. Once you’re of age (this could vary by state) open a Roth account once you have a job on the books. Even if you’re dropping only $10-$20 a week/month, at your age, by a etf that tracks the S&P 500 and just keep adding. Or go with a security that pays a dividend and let it DRIP. By the time you are 30, you’ll have a decent account amount and really see the power of compounding.

mdatwood

If you're serious about it being long term, I would just buy an ETF and call it a day. Then keep buying more as you save more. Corrections happen, but over the long term the market trends up. Also make sure to enable DRIP.

VoiceOfSoftware

I bought Apple in early '90s and never sold. It's been on DRIP ever since.

was_der_Fall_ist

Even if you reinvest (DRIP), the dividend is still a cash payment. You’re just automatically using that cash to buy more shares.

Ill-Opinion-1754

First time investor? Investments are beyond 1yr trends, just zoom out and consider DRIP

redhill_qik

You get the full share. If you are in a tax advantaged account this doesn't matter, but in a taxable account large distributions are painful especially if you only owned the fund for a little while.  Don't think of this as "free money". The upcoming distributions are already part of the fund's Net Asset Value, so when the distribution is made the NAV drops by the same amount.  In order to realize the full performance of the fund the distributions must be reinvested automatically (DRIP).

dontcallmeyohan

I recently got into MLPs after reading this post. Got 100 shares each of EPD and MPLX and plan to put $500 between those two each month. The goal is to eventually have the dividends fund my expenses, but for now they are just on DRIP

new_anon45

Wrong. Dividends are like having $100 in your right pocket and then taking $10 out and putting it in your left pocket. Then you get to pay taxes on the $10, but you still have $100 in your right pocket at the end of the day. Eventually, you will have $100 in both pockets, and that's without setting up a DRIP or equivalent reinvestment strategy. Maybe it's a little more, maybe it's a little less, but that's the same risk with stocks in general. Then there's the psychological aspect of having to sell your shares of VOO or QQQ or VTI or whatever S&P/total market index you're holding when you "need money", vs. just having the extra cash on hand with a good premium dividend stock and not having to sell your cash cow. I'd rather keep the cows and sell the milk, then slaughter them for the beef but be down a cow in the process.

Lingweenie2

Intel’s a sleeping giant. They’re focused on building out there infrastructure and fabs. They’ve admitted it’s going to be painful for a little while. I don’t care about all the haters dismissing them and saying “they’re a boomer stock.” People are shitting on intel for the $7B loss they just announced. I don’t think people know how investing works. If you want to build multibillion fabs and R&D it’s literally going to cost money. Takes money to make money. Gotta come from somewhere. The government is helping which is nice. But that’s clearly not enough to cover it all. The fact people cream themselves over NVIDIA and AMD and makes me even more bullish on intel. I’ll take the contrarian play. We’ll see what happens. As long as intel’s strategy pays off we’ll probably see one hell of a rally. But it’ll take time. Hold, buy on major dips, and just DRIP and forget. I still have high conviction’s this company will join the trillion dollar club at some point in the next decade or so.

creemeeseason

Some stocks aren't eligible for DRIP at every brokerage. EVVTY is an ADR and traded OTC in the US. Because of the fees involved, I doubt you'll be able to do a DRIP for it.

DavidAg02

I bought a bunch of LYB during the covid dip for a cost basis of around $51, had the dividend on DRIP and have accumulated more shares over the years. Sold it all this morning at $105! I was not ever expecting to make that kind of return... but it's been a great stock and will be hard to replace in my portfolio.

rabbibernstein

10k on 100k would mean a 10% yield which is very rare in the market. I think 5% would be more reasonable but again it’s going to depend on what you invest in and if you compound your dividends through a DRIP among other factors. So to answer your question, conservatively 250k could get you around 10k but also consider that you’ll be taxed unless you invest in certain retirement accounts or midstream Lp companies that defer taxes. So you may or may not want to factor that in. Something to speak to you accountant or advisor about if you go that route. Instead of chasing super high yields, find good, solid companies that offer stability and growth that also have a history of paying dividends. Over time it’ll compound and you can sleep well at night instead of worrying over every tick. There’s even ETFs and funds that package stocks together that you can invest in if you don’t want to research specific companies.

Cheap_Date_001

I think people who think dividend investing is "bad" for younger people, don't realize there are all sorts of strategies related to dividend investing beyond trying to get a high yield. People buy dividend stocks to: * DRIP (compounding interest) * Buy quality companies that grow their dividend over time (dividend growth) * High yield (retirees or newbies) * Some combination of DRIP, dividend growth, and high yield. * Monthly payers (monthly compounding) - usually REITs * Buy high quality businesses that pay a dividend when undervalued and reinvest dividends in currently undervalued dividend investments. Strategies to start dividend investing early are usually dividend growth, monthly payers (usually in tax advantaged account), and undervalued dividend stocks (my personal approach at the moment).

Stock_Atmosphere_114

I like qqqm. Lower expense ratio then QQQ. I also hold a bit in QYLG. You get some modest appreciation with some income to DRIP/DCA.

fbalookout

No, dividends are taxable if invested in a taxable account, DRIP or not.

ButtBlock

In the US, dividends are taxable, either at the qualified rate or ordinary income rate, depending mostly on the holding period. Whether they are reinvested or not is irrelevant it’s still taxable. Each time a dividend is paid you end up with a small new stock lot. If it’s all in one company, personally I would take the tax hit and sell and buy an ETF. No company is forever, eventually they all go bankrupt, and most of them become obsolete pretty quickly. You’ll own long term capital gains on capital gains. So the stocks were bought a long time ago, and at several intervals as DRIP. The total dollar amount paid for the stocks in the *cost basis* and you owe tax on what you sell it for, minus the cost basis. Fortunately you don’t owe 15% on the total value of the stocks, unless they were acquired for almost nothing, which they probably weren’t. That said, if this stuff was from 30 years ago, probably a large portion of the total value is now capital gains at this point. 15% isn’t that much to sell and buy something properly diversified. Just remember to save money to cover the taxes, and consider making an estimated payment if you think that’s necessary.

Imok-if-Yourok

Try putting a percentage in ETF’s paying dividends. Turn on the DRIP. Let that be your long term strategy, another percentage in more volatile funds with higher yield percentages. Keep a close eye on the volatile funds and do what you’re good at. Leave the long term strategy alone.

droans

Averaged. Although if DRIP existed, he'd be correct about the Great Depression. The market was rather flat over that time period, but dividends provided a decent return.

Junior_Edge7429

You should avoid the ridiculously high and unsustainable dividend payers. Enablr DRIP on your account and focus instead on dividend aristocrats who have been paying consistently and reasonably for 20 years plus.  I don't advocate a full dividend portfolio but mixing in steady payers us a great way to diversify. I currently make around $1400 a year on my dividend payers. Only a 1-2% increase, but over time this will pay off.

Junior_Edge7429

How do you account for dividend aristocrats that have been paying (and often increasing) dividends for 20 years plus. I don't advocate a full dividend portfolio, but mixing in some high divi payers is a great idea. Especially if you have DRIP enabled on your portfolio. 

taplar

>Because from what I heard your net asset value increases but your share number doesn't? With dividend reinvesting (or DRIP), it is the opposite. The value of your holding drops the amount of the dividend, and you receive the dividend amount per share. Then if you reinvest it, you are purchasing more shares with the dividends you received. As such, as time goes on you will hold more and more shares, with the hopes that the companies/funds value continues to rebound after the distributions.

CornfieldJoe

Rising interest rates cause the face value of bonds to fall but their yields to increase. If interest rates fall the bond's face values (the fund) goes back up, but the yields go down. DRIP (dividend reinvestment) is far more important with bonds - reinvesting the bond coupons generally increases your ultimate return \*substantially\* in contrast to stocks where DRIP is nice, but (hopefully) won't be the lion's share of the return. Older folks benefit from the coupons and dividends paid by bond funds because they either spend the income or reinvest it for later fixed income. Since OP already owns a home, so long as equity in the house is growing nicely and it's being well maintained, you could probably abscond with adding bonds until much later (especially since they're investing late). Selling at a profit and downsizing should make up the gap and make for a pretty sure thing unless they're letting the house fall down or the area around is decaying rapidly.

ManicMick420

AMD. I will play devils advocate. AMD is getting new customers and what not. I own NVDA and got a dividend. the 5000 series is coming out and there is new customers for them too. I would sign up for robinhood since you can slide in up to 1000$ instantly. after that they take a while to slide money in. You can slide up to 50K in a day. I dont recommend doing options trading for now. Though someone in here said short reddit omg. If you want, diversify your portfolio and so 50$ in doge. 300$ in NVDA or AMD 100 in walmart. 50 in KO coca cola. When shit hits the fan people hit up walmart for savings. You can also get a margin account if you meet criteria. Borrowing money to play the stocks then paying it back over time is up to you. I am worried about a decline and margin call and having to sell off or payback money to get back int he black. Real shit Oct 29th 1929 the stock market shit the bed so hard they did a margin call and people had to sell off stuff pennies on the dollar and like everyone went broke. My grand ma was 16 smoking cigarettes out of a holder and dancing as a flapper. In 1931 she moved to a farm and raised chickens and homesteaded until 1945 when she moved to her house. I lived through 1989 2001 2008 and whatever is next after the AI bubble or so. Keep that in mind! If you buy a stock and 1 year plus 1 day from now you dont have to pay the taxes on it. if your portfolio is below 40K you dont have capital gains taxes. If you sell the stock for a profit before the year and day there is 24% tax and a form 1099 something. Your robinhood gives it first week of february or so feb 10th? 15th?. If you do taxes yourself get the turbo tax with capital gains. You dont need the rental properties one unless you have a house you rent out to people. Stay below the radar. Go long. and slide in an amount every pay cycle. You also want to save up 1500 to 2000 "oh shit fund". Hot water heater, or broken tooth, or? i am telling you shit happens. There is an option called DRIP Dividend re-investment program. enable it. 40 cents from 50$ KO every qaurter back into the stock plus more money as you go all the way to 65 is one hell of a retirement plan. Get a job that has 401K matching too. 5% aint much but by the time you are ready to retire it adds up. There is also ROTH and NON ROTH IRA. talk to a specialist. ​ "An investment in education pays the best interest." - Benjamin Franklin

notreallydeep

>I'm thinking of VOO and let it DRIP lol. Good thinking, do that.

big-rob512

Probably from DRIP this is how all mine look and i cant buy fractional shares on my platform

bloodhound1144

More than happy to help. Shame about that broker. A lot of companies pay a dividend. DRIP is a good way to buy into a company and not have to look at it again for years. Sort of a "set it and forget it" strategy to investing as dividends are usually paid as a percentage. Your position increases at the same rate, regardless of price. 5% = the same in terms of new shares whether the stock is $1 or $100. Buffett does this and has proven that it works. Most stocks in his portfolio pay a dividend. That's why he just holds stuff for 40+ years, even if the price doesn't move. Play around with this for a bit and you might consider another broker: [https://www.marketbeat.com/dividends/calculator/](https://www.marketbeat.com/dividends/calculator/)

Accomplished-Task561

Thank you so much for the breakdown, appreciate it. I asked my broker about DRIP a while back, but they don't support it.

bloodhound1144

They pay a cash dividend every 6 months (semi-annually). This one is $38. The smart play here is that when a stock split is coming, investors either run or buy like hell when the price drops. Capcom is avoiding all that volatility by issuing a dividend that equals the current price. To explain DRIP: When you're paid a cash dividend, you have two options; 1. take the cash and call it a day 2. reinvest that cash into more shares If you choose option 2, your broker automatically uses it buy more shares for you. When they do this, you don't pay any fees. This will increase your position as well for the next dividend payout in 6 months. In this case, you're buying two more shares at the new price of $20 (assuming it remains there until payout). You had 1 share worth $40, which will be 2 shares worth $20 each. If you reinvest your dividend, you'll have 4 shares worth about $20 each. Your investment doubled just for holding.

bloodhound1144

Adding this. That dividend is nuts! Current price is $40 USD. That dividend is currently a 6 month payout. A $38 USD dividend paid on the same day as a split is their way of providing current investors with more shares (DRIP + new $20 price). Currently own shares? Have 2 more on us to triple your position. Dilution completely avoided. Seriously wish I knew about this ahead of time. Smart play by them. ​ https://preview.redd.it/clrbyixk01rc1.png?width=1202&format=png&auto=webp&s=6e68014cc17f87ba1d985fd670b5c9778dccab70

sock_meister

You're doing great for just starting out. Leave the DRIP on and focus on the growth ETFs (VOO) for now and leave them as the majority of your portfolio.

wolfhound1793

You want a safe 400% return? I got a really good play, has like a 90% backtest record for a 400% return and it is super simple: With your $10,000, buy 162 shares of SPLG, turn on DRIP, walk away and return in 2050. I can't promise that you'll have 50,000+ in 2050, but the odds are really high that you will.

SirGlass

I would almost guarantee if you wait until tomorrow you may see it. DRIP might also affect it If you have DRIP turned off you might get your cash sooner If you have DRIP turned on well it might not show until they actually re-invest the dividends what can take time The brokerage collects the dividend, the brokerage then goes out and buy the shares with the dividend and this may take some time they just do not put a 10 million market order they may split it up throughout the day Then after they buy the shares they will then distribute those shares to the holder of the funds so if you have DRIP it may take extra time to show

Putrid_Pollution3455

Responsibly DRIP 💧 my VOO dividend back into VOO

stickman07738

$HON, been investing in them via their DRIP since the mid-1990s - excellent management and by far my largest individual holding.

Cruian

>I'm going to start investing into Fidelity's FSFAX (Total Market Index Fund) into my Roth IRA, Pick 1 from: FTIHX, FZILX, or FSGGX. There's benefits to going global as updated to the US only that FSKAX would be. >Also, I'm considering doing hand-selecting of dividend stocks and tap into the DRIP and let it compound over time. However, just wanted to know if there are those who've opted for Dividend ETFs ? The purpose is really to take care of month expenses (e.g., Rent, groceries, gas, etc.). For non-retirement accounts? First, dividends aren't free money, the share price drops by the distribution amount. Second, even dividends focused find like SCHD only distribute a small amount of the share price, so you'll need a lot of it before it makes any noticeable difference. It'll take years before the distributions even pays for itself.

httmper

After holding this stock and DRIP for 4 years. I finally sold. While the dividends were nice…it just didn’t move. Invested the money into various funds that hopefully with grow like the rest of the market has the last few. Have one more dividend coming in and will see what I will do with it……prob throw it in fidelity Magellan ETF

Suitable_Inside_7878

20% is higher than a fund like VOO but lower than others I’ve seen with ~70% turnover, I haven’t checked many to compare though. The high turnover doesn’t matter in a tax advantaged account, but if you seek to avoid tax drag in a taxable account, it is something to consider. Dividends are taxed as a “qualified” after 60 days of holding the fund which is capped at 15% tax (currently). So it doesn’t matter if you DRIP or buy something else, the taxes from the dividend will remain the same. If you think there is a better investment opportunity you can invest in another fund, if not, just DRIP

Expensive_Heat_2351

DRIP and dividend stocks.

stickman07738

I have been investing in $HON DRIP program since the mid 1990s after a work colleague would talk incessantly about them over lunch everyday. I initially contributed $100/month and switch to $500/quarter after 5 years. Today, it is by far my largest individual stock holding. I have only sold once (100 shares) during Covid to remodel our kitchen. Good Luck - slow and steady wins the race.

PAO_RT_IN_THE_KISSER

I meant difference between SPY. Including DRIP SPY is up 417% in the same time frame

pukui7

Partial shares are held directly by the broker as whole shares, divvied up in the broker's books among their customers that have partial shares. So a split would amplify the broker's whole share holdings by the 50 to 1 amount, and they can easily pass this along to the customers as exact full and partial shares.    This has been my experience.  (This was with fractional shares that came to me via DRIP.  So maybe it's different for buying fractional directly.) For reverse splits, I recall seeing the remainder liquidated.  Same for a spin off, such as when PFE yielded some Viatris.  We only received whole shares for Viatris, and the remainder was in cash.

StarWhorz00

Lackluster until rate cuts. DRIP until then. Just a little 21 share position I picked up at 162

Prestigious_Meet820

https://www.td.com/ca/en/about-td/for-investors/investor-relations/share-information/share-price-tools/investment-calculator Because it's also an excellent bank, same premise as the others. It's had excellent growth through asset acquisition over last few decades, I've been buying a mix of the 5 since the 90s, with DRIP they beat S&P by a good amount with compounding. All have similar expected total returns if you include equity, dividends, and any buybacks. Flip side is additional exposure to nations outside of Canada through expansion, that's why a basket is better, although all are tied to an entire economy of a nation that has its own fiat. These are companies that I wouldn't mind buying at any price, although that's not how I make my choice when I'm picking. I also don't really pay much attention to them outside of reading their financials each quarter.

bloodhound1144

The best I can give you is 2 safe options on this: 1 - Buy shares in lots of 100 and sell Covered Calls on a weekly basis. You can also sell come cash covered Puts. Worst case scenario is that you end up with more shares (selling Puts), or sell your shares at a good profit (Calls). You can skim premiums off of both. Don't get greedy (aim for strikes 25% off current price) and you'll be fine. 2 - Find a good company that pays a quarterly dividend above 10% annually and has done so for a long time (20 years +). Turn on DRIP and you'll be good. This won't get you to 100K in 5 years but it's a safe bet that eventually will. Option 1 will get you to $100K in 5 years if you learn about options but will require you to be active. Option 2 won't get you there in 5 years but it's a "set it and forget it" way of doing things. Dividend calculator: [https://www.marketbeat.com/dividends/calculator/](https://www.marketbeat.com/dividends/calculator/)

bro-v-wade

>Unless you're using the distributions to pay your bills, you shouldn't even be looking at distribution yield. Why not? When deployed as DRIP, it increases principal/decreases cost basis.

shikatozi

DRIP

DaegenLok

Open IRA, Find the cheapest (lowest Fee/Expense Ratio - Should be <0.15%) S&P 500 ("The Market") fund. It might be $VOO or a comparable Index Fund since it's an IRA depending on what they offer. Robinhood's IRA accounts allow you to invest in normal ETFs/Stocks. Some other IRA/401ks have mutual funds/index funds under the same name but they track the S&P 500. Then, consistently, constantly, and continually invest by dollar-cost-averaging over 20+ years. This means that pick a week once or twice a month, and have it auto-purchase or you buy fractional shares of that fund. Do it consistently. NEVER worry about where the market is (up or down). A little bit a month adds up significantly. It's the easiest and most boring way to truly become a millionaire. Also, don't forget to enable "DRIP" (Auto-Dividend Reinvestment). This will be your biggest contributor to compounding gains over time. Look at a compound interest calculator to try to plan your gains. For the CAGR or APY or whatever it ask, use 10-12% yearly return. That is the most recent historical average YoY return of the "Market" (S&P 500). You mentioned in another comment talking about trading. If you want to trade to feel good, then just look into SELLCOVERED CALL options. Those are the most simple. As long as you are trying to SELL CC's and place the strike price above your "Average Share Price", you will always win. There's an artificial "downside" but it's not a downside really. It's mainly because share price appreciation is upside capped where your strike price is. So if it moves up a lot and your shares are called away then you would lose out on the difference the shares moved up and selling. I don't look at it that way though. That's a whole other discussion.

auburnmann2

I’ll start leaning more heavily on the growth and DRIP my dividend payments back into the dividend ETFs.

beyonddisbelief

SA is apparently blacklisted here but you can Google up SCHD with DRIP vs SPY comparisons for the answer to your question. SCHD still underperforms significantly over long periods.

Murky-Attorney-3786

I started with 13K and now have 170k in DRIP. OIL, REITs, Energy and food.

ChiggaOG

Time to send OP to Wennie Hut Jr. with the r/ investing on dividend and DRIP system of 10 years slow, but works method. OP is done. Losing $20k in a trade is not an achievement in this sub post-GME.

Murky-Attorney-3786

I hit a few home runs, now I am looking at the companies that are paying a nice dividend. I buy, enroll it DRIP and then forget. I am going to retire with a nice pipeline of cash supplementing my work retirement stuff.

derdubb

Setup a diverse portfolio with large cap high yield stocks and DRIP that shit Then ride all the way to the pearly gates of tendie heaven

LilSwaggyMayne

Bruh that’s enough money to toss into something with some considerable DRIP

DiscoMarmelade

Lol why do you care? It's a squeeze play but also a dividend stock. Most of my portfolio is dividend. It's paying at 8%. If the price drops, the DRIP buys more shares. If it rips, I sell, take profits, then buy back in when the price settles. I love when my dividend stocks go down a bit. I had lending on because I also sell option premiums. One of my options was getting close to the strike price. I didn't want my options to get called so I can keep my shares. Sell the premium and keep your shares in the best case scenario.

RoninISC

Hi guys, appreciate the feedback again. I'll reply to both Greytoc and Banks in this one re. Seems you both basically skimmed the post and missed some *critical qualifications and nuances*, but that's normal today. Credit cards: Understanding and gaming the redit rating and cc's is an important thing. Five is, or at least was unless it changed, the magic number the algo 'wants' to see. I did recommend staggering the opening of them if needed. Is there much more to juggle than 1 or two cards? Just use a different card after a bit, *or dont use it at all, simply have the balance there unused.* I have a credit rating of about 850; maybe I know a little bit. Physical bullion: I stated the scenario was not highly probable, and to use a small percentage for it. Small does not mean negligibe though, and all possibiliteis must be accounted for. I assume you both understand rampant inflation due to money creation, and that gold spot is at all time highs? I suppose someone should tell all world governments holding bullion is not useful, bc they didnt get that fax. Be wary of temporal locality bias. Marriage: I guess the all caps 'LOL' after the line wasnt enough indicator that this was mostly a joke; although, frankly, *if* you are concerned with pure finance, it is not a joke. Ask any man who has gone through divorce. If you really got the right one who you love and is fiscally responsible... congratulations. Short term bonds: 'yields are not likely to be inverted indefinitely'. Very true, which is why I put that under the 'Cyclical' heading, and explicitly warned to 'keep you ear to the ground. You can buy 10yrs to lock in a higher rate' Again, did you actually read the entire post? Bonds are a *huge* part of many smart and big money portfolios today. The risk premium on stocks is still not ideal, especially given the historical portends of inversion. Options: a bit confused on the criticisms here, and there seems to actually be none. It also appears contradict between you: one says options are a 'common use case', and the other states 'the avg person doesnt know squat'. Refer to my original writing, 'If you’re at that point where you really know how it’s done, then you are not reading this anyway.' My warning was to, as a beginner, thinking you are going to jump into options and get rich quick like all these bait sites profess, is a trap. This is patent. Dividends: This looks like the only valid critique. It may be splitting hairs though and getting into technicalities on stock types vs goals. Does decent dividend necessarily imply less growth? Theoretically some, but that's far from guaranteed either way. A dividend is simply a less risky return (yes they can be cut), where growth is a bit riskier. Dividends are taxed indeed, but when you realize the 'growth', that also get taxed as capital gains. In a tax deffered, the %10 goes back into the account, and can even be automated with a DRIP, so what is the difference? Im not necessarily disagreeing w you, I think it's mostly a matter of risk tolerance and style; dividends are still quite valid in a balanced portfolio.

yolobozo

SPY, VOO, QQQ with DRIP and resist the temptation to sell.

AllShortTheRedditIPO

I wonder if OnlyFans has a mechanism to reinvest immediately into stonks? Like DRIP but instead they can call it SPLOOGE.

TheDissRapperr

#DRIP

jrfry19

I wish I never started option trading and just such with DRIP

jrothca

Vanguard allows you to look at the performance of an individual investment. It calculates your total ROI like you calculated your DRIP. But when you look at the cost basis in Vanguard it calculates it like Schwab does. Maybe Schwab has a performance view that shows the ROI like you expect to see it when reinvesting dividends.

BillPullman_Trucker

I've had this thing on DRIP since it was in the $9-10 range. Stock is up 60% but those divis have me up 250%. I'll keep holding in the end left wing government likes money just as much as right wing government.

hydrocyanide

>If you have two stocks which perform the exact same, and you use DRIP for stockA but just take the dividend for stockB, they should show the exact same gain. Not in your portfolio they shouldn't. You own a different number of shares of each stock if you reinvest dividends for one and not the other. >Dividends are not reflected in capital gains. This is a true, but irrelevant, statement. The correct measure of gain is total return, which is what OP is looking for.

userax

That sounds right to me. Dividends are not reflected in capital gains. If you have two stocks which perform the exact same, and you use DRIP for stockA but just take the dividend for stockB, they should show the exact same gain. Otherwise, it would artificially seem like stockA is doing better. An unpopular side note: DRIP is bad and you should probably turn if off. DRIP is easy and effortless but makes portfolio skews worse. If you believe in your portfolio allocation, you should not use DRIP and instead invest the dividends into the underweight parts of your portfolio to help maintain the target allocation.

DarkStorm440

I haven't bought any individual stock in over a decade. Unless you count the few NVDA shares I picked up through DRIP I suppose. Wish I had more to offer.

BillPullman_Trucker

I held through Lula, I'll hold through this. Not adding anymore yet but will continue to DRIP (just not as frequently or as much).

DarkStorm440

I don't know why posting a graphic is overwriting the text, but the overall gain is lower due to DRIP purchases over the years. Those first lots though... 😙🤌🏻

footlong24seven

Wow I just realized my stupid broker doesn't allow DRIP for my NVO shares, but I still won't go back to RH after the GME debacle.

hoodratzbiatch

I don't usually mind if my dividend stock take hits. It allows you to accumulate more on the DRIP. I have a respectable dividend portfolio. As long as they don't slash the dividend, you generally come out on top in the long run. Also, if the price takes a hit, the DRIP automatically helps you average down with no money out of your own pocket. I like this stock for the dividend payout and the potential to squeeze. If it squeezes, I'll take profits. If it doesn't, I'll probably keep it for the healthy dividend return. I'm happy I found this one with the help of these people here. This one needs volume to pop tho

AWholeBunchOfMumms

If you opt to go this route, OP, note unused funds of the 529 plan account by your daughter can be rolled over to a Roth IRA for her up to $35k. I know that’s many years down the road, but something good to be mindful of. Regarding your question: I’d say yes to a market index ETF. I would suggest setting up DRIP (Dividend ReInvestment Plan)

milmat36

Buy. Hold. Collect dividends, DRIP. Repeat.

MarcatBeach

well there are some CEF's that you can get great dividends and DRIP to some low discounted price. but they are value traps. CLM is one of them. it is popular on the youtube circuit. though if you buy on weakness you can get some nice yields on individual stocks and especially the preferreds. last years selloff in the summer I picked up some nice yields on deeply discount preferreds. but not 17% nice.

EvergreenLiveOak

Great that you are thinking about these things! Always keep learning. At your age, I think you should limit your exposure to SCHD. While it's a great ETF, it's not going to grow like VOO. You could look to start moving funds into it when you hit 50 and want to start hedging against a downturn. I would also limit your international exposure. You somewhat get exposure with the S&P500 as most companies trade international (Apple in China!). The international ETF's just have not performed in the last several year. I know that there is a strong presence on Reddit that states that VXUS is a good thing, so you will have to make your own decision on that. I currently invest in SPLG (Large Cap Blend) (50%), SCHD (Large Cap Value) (20%), QQQ (Large Cap Growth) (10%), XMMO (10%) and COWZ(10%) for mid cap exposure. You could try upping your exposure to QQQ in place of SCHD. DCA, DRIP, and time in compounding interest are also key to long term wealth. Happy Investing!

EvergreenLiveOak

I think this is the correct answer, and I like that way of thinking. I would shift the money to an index ETF, such as VOO, SPLG, or IVV (S&P500). You should see good growth in your Roth with that in place. But keep learning. There may be another idea you want to try. And if you're anything like me, you'll keep learning that the S&P500 Index fund is the most consistent way to grow wealth long term. Also, don't forget to DCA, DRIP, and compound your way forward.

EvergreenLiveOak

Yep, if there is no discount for your ESPP, I would not invest in that. Rather, setup your direct deposit to go to two places, your personal checking and your brokerage account. Start sending to your brokerage the amount that you would send to the ESPP. Then setup auto-investing into an Index based ETF, like VOO, SPLG, or IVV (S&P500). There will be more variability than your HYSA, but that will set you up for long term growth. Every time you get a pay raise, bump that direct deposit up by 1%. DCA, DRIP, and time with compounding interest will create some wealth for you.

Stock_Atmosphere_114

I don't remember where I saw it, but there's a mathematical formula for the diminishing returns on securities. I think it was something like 20 securities, are all you need to be properly diversified, by equity, if not sector. I would tax loss harvest your loosers, and keep your winners, maybe take profit in equal measure depending on your income. Then roll over half into a S&P 500 index fund, and put half into either a HYSA, Dividend appreciation fund, or maybe an intermediate Corp bond fund. Gives you income potential to either DRIP or use as a feeder fund for your other holdings, some possibly of capital appreciation, and the stability of the S&P. Not financial advice, just my two cents.

Stock_Atmosphere_114

If I were you, I'd take 50% of whatever you'd like to invest and put 50% of that into SCHD and the other 50% into QYLG, turn on DRIP and walk away. The remaining 50% either goes into HYSA or a TIPS fund to collect around 4-5% on your dry powder. That way, you've got two funds, essentially dollar cost averaging themselves, one for growth, one for stability. The remainder you can invest as you go whilst earning 5%. Not financial advice, just my two cents.

ValueEdge7

Yeah, it’s not entirely bad advice. His portfolio is likely better than what you have put together. VOO is better than SPY because of lower expense ratio. Generally just investing in the S&P is probably preferable to anything else. That portfolio he gave you though is decent. If you are interested in DRIP’ing I’d recommend doing it in a Roth because divs aren’t taxed in a Roth so it’s a very efficient compounding vehicle.

thechosen10ne

Yep. Just disabled DRIP on all my positions so I can take that cash and put it in something better. Thanks!

Stock_Atmosphere_114

Look into QQQM if your considering holding long-term, cheaper mgt fees. Or perhaps QYLG if you want a little income to help DRIP you up long term. I own this specifically because I want to capture that tech growth.

wanderingmemory

I forgot to say you could turn off DRIP for now. So you won't keep adding to the current less tax efficient portfolio and can redirect dividends to the simpler portfolio.

MattieShoes

> high dividend paying ETFs and securities Probably poor choice, because tax drag. > I also have DRIP enabled Removing the only real advantage of dividends haha :-) Dividends are fine particularly if you spend them, but dividend + DRIP is just a less tax efficient cousin of share price appreciation. > The advisor at empower said that at my age I need to be focused on growth only, and that high dividend-paying securities aren't very tax efficient at my age. Oh haha :-D Yes. Though "growth" is a loaded word here. You care about total return and would prefer share price appreciation to dividends. That doesn't mean only those deemed "growth" companies. > Of that 70%, I have roughly 8% SPY, 5% VOO, 4% VUG, 7% QQQM, 16% JEPI, 11.5% JEPQ, 10% SPYI, as well as a few other randoms here and there. JFC. Why so complicated? > I know SPY and VOO are very similar I think that's understating it. They both follow the same index, so barring weird timing issues, they are identical... except SPY has higher expense ratio. > the advisor at Empower told me I should basically sell everything May depend on what sort of CG taxes you're going to be hit with. Like if you've been holding for 15 years and are going to get hit with a huge CG bill for selling, it might make more sense to let it ride just to defer the CG bill. If this is stuff you bought recently and can sell without tax consequences, then yeah, you may want to simplify.

MissDiem

DRIP makes this deceptive. It's flat zero over the last 24 years. And with inflation considered, you'd have burnt money.

MattieShoes

Assuming DRIP... +29% since Jan 2000 -8.4% since March 2000 +85% since December 2000

captaincaveman87518

Don’t go for high yield. Go for dividend GROWTH with DRIP in tax advantaged accounts. Like SCHD.

CertifiedBlackGuy

The dividend is factored into that 7%. 7% is 7% whether a portion of it is from capital growth or capital distribution. And again, you're talking to someone who does invest in dividends, SCHD, O, and UHT make up the bulk of my dividend account. I like the money coming back to me. Currently my accounts are set to DRIP the dividends, but I'd like to get to a point where I can draw on them. But the thing is, I recognize that the dividend is part of the total return. And SCHD's total return does lag the total market, which is why I am largely in growth. Pure dividend is not a successful play in terms of total returns, and being a proud r/dividends member, I still wouldn't recommend a pure dividend play to *anyone*.