Appreciate all the time and effort you put into your videos to educate investors young and old. Surprised to hear you speak about dividends on a positive note!
I print 3 months of dividend history from monthly statements, then I keep track by pencil looking at the history page. I don't really add them up but I can see at a glance if any get cut, or raised. Simple but works. I am a dividend growth investor. Not a dividend chaser though.
So, what is the purpose of tracking one's dividends? Do you take the data and make decisions on which stock to sell? Unless I missed something, not hard to do for me, I don't understand what the data is going to do for me. What should I do with this data?
@4:42 and @7:28 Maybe help explain why. TBH the value is still not 100% clear to me but I like to keep it as simple/maint free as possible incl some books and videos for trends and learning. Many others do like to track and analyze more moving parts more often. Whatever works for you.
I had the same question after watching the video. Neither of the two benefits Rob cites seem like they generate actionable or useful data to me - so as to make spending time tracking this worthwhile. Perhaps I missed his point.
Thanks for the video, Rob. Been tracking my dividends via excel since the beginning. I look at my stock values regularly, not that I would typically do anything, but I love the excitement of a dividend being paid.
The channels i like are starting to converge 😁. The dividend investing channels i like give a lot of time talking about not just chasing yield and total return matters. Now a channel i like that talks a lot about total returns is talking about dividends mattering. All good stuff. Thanks for another great video.
15:58 i would have thought looking at the steady progress of dividends would give reassurance if the markets were in the doldrums. the more fundamental measure of progress would not be falling as much as the market or possibly still rising with new contributions. i think it could help people stay the course to see dividends still ploughing on.
Thanks Rob, another excellent video, as always. For the first time, I looked at my dividends and interest in my Schwab accounts, YTD and projected until year end. Very interesting!
I tend to pull three reports, a dividend on my brokerage account, advisory and platforn fees (expenses) on all accounts and total returns Commonwealth has many tools but these are what I use most.
This is interesting. I’m in UK, close to retirement and looking at how to build my portfolio for drawdown. I’ve been comparing growth v income funds and looking at what companies they hold, and noticed the stability and, importantly, diversification that income funds bring. Probably because the holdings that pay dividends are generally older, more established companies in sectors like finance, energy, mining and consumables. Growth funds tend to be more tech heavy. I’m tending towards a mix of growth and income funds.
I don't incorporate all tax offsets but I do reduce my net worth by estimated taxes due on Roth conversions between retirement and receiving social security.
This makes sense with your often used example of pretending you own the company. If I owned a company, I would not pay myself by selling small portions of the company (like a retiree holding non-dividend stocks and selling some for income). I would pay myself from the profits (like a retiree holding dividend stocks and using dividends for income). I have been tracking dividends for a long time.
I heard recently that stock buybacks are a more tax-efficient way of giving a return to investors. So do you think we should track the total of dividends and stock buybacks?
The dark side of stock buybacks can also be when CEOs buy back stocks to boost their price and sell on their way out of the company. Closely tracking the fundamentals of companies with moats along with positive profitability, liquidity and solvency can keep you on the right track. Several dividend ETFs to consider are SCHD, DGRW, VYM, VYMI and SCHY. Also, Vanguard and Schwab money market (I.e. SNSXX) are paying over 5%. Lots to consider. Best of luck fellow investor.
When a corporation buys back outstanding shares of its stock, there are fewer share outstanding and the price of the stock may (or may not) go up because with fewer shares of stock outstanding (I.e. smaller supply of stock) to be owned the price of fewer shares for sale in the market may increase the price of the stock outstanding. Apple is one example of a company that pays a relatively modest dividend but over the last several years has bought back lots of it stock and the price of Apple stock has increased - in part because earnings continued to do very well and there were fewer shares outstanding. I think if you owned Apple stock, you could look on your brokerage statements, the IRS Form 1099-DIVD you get every year or go online and see in lots of places tepee dividends paid. Where should an investor go to see how many shares of Apple stock Apple bought back AND if an investor could find that amount, how much of future prices of Apple stock is properly attributed to the buyback? Given the investor has the control of when to take a capital gain (e.g. in year when they are in a lower tax bracket) but has no control when dividends will be paid (perhaps during a year the dividends push them into a higher marginal tax bracket) it is often the case that stock buybacks are a more tax efficient way of providing a return to investors than dividends are. With buybacks the investor decided not only how much capital gains they want to realize, they also decide when they want to realize the capital gain. With dividends, they corporation decides how big the dividends will be and when dividends will be paid. No guarantees share prices go up or dividend get paid. Tracking stock buy backs is not only much more difficult than tracking dividends paid, the consequences of stock buy backs, while important in the price of the stock, is not the only (or even the most important component in share price). Just because a corporation buys back some of its outstanding stock does not mean stock prices go up and even if they do, it doesn’t mean you sell shares and realize a capital gain. I think Rob is onto something by tracking actual dividends paid but I don’t see the benefit in tracking stock buy backs. Corporations decided if and when they pay dividends, investors don’t. Generally, in brokerage accounts (and not IRAs or 401(k)s) qualified dividends are taxed at the same rate as long term capital gains (while interest paid on bonds and CDs are taxed as ordinary income. Learning how many shares of Apple stock Apple bought in 2020 is a bit more difficult (I think) than learning the dividends Apple paid in 2020. And, I don’t know how I would determine the impact fewer outstanding share of Apple after a stock buyback had directly on the price of a share of Apple stock. Do you think it would be beneficial to track stock buy backs?
I would love to know if someone actively taking their RMD's would say their earlier Roth conversions accomplished what they expected in regards to RMD amounts
I've been trying this strategy last year and this one. I hope it's worth it. Besides the taxes to pay, there's the increase in Medicare premiums (IRMAA). If tax rates go up dramatically in the next ten years, I'll feel like a genius. Otherwise, maybe I'm just reducing the hassle for my heirs.
We done Roth conversions for the past four years. We have converted all my wife’s IRA to Roth and after 2023, we will have converted about a third of my IRA to Roth. I have several more years until I need to take RMDs and plan to continue to do Roth conversions until then, being cognizant of IRMAA and also more importantly how much cash I want to pay in taxes now rather than later. But we will wait and see what claiming Social Security does and may do less Roth conversions as a result. Our hope is that a significant amount of our qualified assets will be Roth, which are way better to leave to our children. Also, as I am older than my wife so the odds are pretty good she may have years as a single taxpayer so the more we get into Roth and then more we take out of my traditional IRA, even more than the RMD and pay tax as married filing jointly, the better off the survivor will be as a single taxpayer. We hope to spread out income taxes sort of evenly over our lifetimes and to the extent we leave assets to our children, Roth IRAs will be great and the ETFs in our brokerage account will, hopefully, still get a step up in basis. Time will tell. There are way way too many unknowns including what will be the tax law in 2026 and beyond and when will Congress pass SECURE Act 3.0, 4.0, and 5.0. To me, given Roths are widely available today - Roth IRA, Roth 401(k), Roth 403(b), and even Roth employer matching contributions - the time to think about Roth is when you’re 30 or 35, not 60 or 65. In retirement in addition to Social Security, it seems prudent to have maybe 25-33 percent of retirement assets in a traditional IRA given the standard deduction and progressive income fax brackets and rates. You will be little to no federal income tax up to the Standard Deduction and then a pretty low first couple of tax brackets. An argument for more in traditional is if you’re paying for assisted living care, lots of that cost is deductible and having taxable income from a traditional IRA would be better than tax free Roth if you end up paying for assisted living care. And maybe 33-50 percent of assets in retirement in Roth so that you can stay in low brackets both when you’re married filing jointly and if/when there is a surviving spouse but have income tax free money for consumption. The balance would be in a non qualified brokerage account. Seems to me investing is easy compared to income tax planning while working and in retirement. But if one has this complex problem it is a great problem to have as one has been fortunate enough to have accumulated a significant retirement nest egg.
What is the rationale for replacing part of one’s bond portfolio with an ETF the holds about 100 stocks that pay dividends and holds no bonds at all? Are you investing in an IRA or in a non qualified brokerage account? Granted SCDH has been less volatile than many or most large cap US stock market index funds but how does SCHD’s volatility compare to your current bond portfolio?
@@davearey4922 1. The rationale is to reduce volatility. Since inception SCHD has been less volatile than the S&P 500. 2. I would never put SCHD in a taxable account. I was thinking Roth IRA. 3. Bonds are less volatile than SCHD. However, they also have a much lower rate of return. 4. I would not replace Bonds with SCHD but use SCHD as a partial replacement for them. SCHD could be used to reduce volatility within a portfolio while maintaining a higher rate of return than just holding Bonds would. 5. That is my thinking on the matter as of now. Was wondering what others opinion on this is?
What do you mean the dividends go down? You mean they are cut, or is this just that they are eaten up by inflation but you still get then...mostly dividends are increased over time
I am 69 and doing Roth conversion as I have not been taking ss and fully retired. If I live past 80 I’ll let you know if it was worth it. I have 2.7M in ira and want to reduce that.
Wow, you just discovered this now?! Here in Canada, for my retirement next year, I will live off my dividends alone and never touch the principle/capital!!
Hey Rob, always enjoy your webcasts and always learn something new. However, was surprised to hear you say that you believe you are an owner of a company merely by owning shares of stock. Legally, that doesn’t make you an owner. The “owner” of a publicly traded company is the corporation itself, which is why the company doesn’t really owe you, the shareholder, anything, including dividends as you noted. The good news is that as a mere owner of shares in the corporation you would not be legally or financially liable for anything (bad) the corporation does! 😅
Hi Rob, I'm a big fan of your content and sense of humor :). Wondering if you could find a way to position your microphone away from your keyboard or get a quieter keyboard? It's like fingernails on a chalkboard to me! Thanks!
I like the dividend growth trends in current times more as an easy way to show shareholdings that business is growing. Forget ebitda. Show me the dividend growth!
Appreciate all the time and effort you put into your videos to educate investors young and old. Surprised to hear you speak about dividends on a positive note!
I print 3 months of dividend history from monthly statements, then I keep track by pencil looking at the history page. I don't really add them up but I can see at a glance if any get cut, or raised. Simple but works. I am a dividend growth investor. Not a dividend chaser though.
Great idea. Simple and effective.
You need so much to get useful dividends to live on it's a bit unreal.
So, what is the purpose of tracking one's dividends? Do you take the data and make decisions on which stock to sell? Unless I missed something, not hard to do for me, I don't understand what the data is going to do for me. What should I do with this data?
@4:42 and @7:28 Maybe help explain why. TBH the value is still not 100% clear to me but I like to keep it as simple/maint free as possible incl some books and videos for trends and learning. Many others do like to track and analyze more moving parts more often. Whatever works for you.
I had the same question after watching the video. Neither of the two benefits Rob cites seem like they generate actionable or useful data to me - so as to make spending time tracking this worthwhile. Perhaps I missed his point.
Was wondering how long it was going to take to start a more in-depth discussion about income investing. Well done. Nice evolution.
Thanks for the video, Rob. Been tracking my dividends via excel since the beginning. I look at my stock values regularly, not that I would typically do anything, but I love the excitement of a dividend being paid.
Reducing RMDs by Roth IRA conversions. Retired at 59. Started conversion this year at 60...up to 12% tax bracket. 89K. Will do them until SS at~68
We are using same approach just delayed the larger Roth conversions until we are 65 so we maximize the tax credit for Obama care.
@@oriewall Wife just was accepted SSDI...I am disabled Vet.
The channels i like are starting to converge 😁. The dividend investing channels i like give a lot of time talking about not just chasing yield and total return matters. Now a channel i like that talks a lot about total returns is talking about dividends mattering. All good stuff. Thanks for another great video.
15:58 i would have thought looking at the steady progress of dividends would give reassurance if the markets were in the doldrums. the more fundamental measure of progress would not be falling as much as the market or possibly still rising with new contributions. i think it could help people stay the course to see dividends still ploughing on.
Rob is always dismissing dividend stocks, so it's quite surprising to see this video!
Thanks Rob, another excellent video, as always. For the first time, I looked at my dividends and interest in my Schwab accounts, YTD and projected until year end. Very interesting!
Good to see you talking about dividends. Learned allot from your previous videos on the subject.
I tend to pull three reports, a dividend on my brokerage account, advisory and platforn fees (expenses) on all accounts and total returns
Commonwealth has many tools but these are what I use most.
This is interesting. I’m in UK, close to retirement and looking at how to build my portfolio for drawdown. I’ve been comparing growth v income funds and looking at what companies they hold, and noticed the stability and, importantly, diversification that income funds bring. Probably because the holdings that pay dividends are generally older, more established companies in sectors like finance, energy, mining and consumables. Growth funds tend to be more tech heavy. I’m tending towards a mix of growth and income funds.
TD Ameritrade has Income Estimator...shows portfolio Yield, securities yield...estimated monthly dividend payments...I hope Schwab adopts it.
Schwab has it also.
@SueTNguyen Schwabs not as in depth...shows no Yield on portfolio.
All the houses in my neighborhood are being bought with overseas money, guess I'm dependent on the state of the international economy.
@@rockycodyjesse So Cal
Silicon Valley, too.
I don't incorporate all tax offsets but I do reduce my net worth by estimated taxes due on Roth conversions between retirement and receiving social security.
This makes sense with your often used example of pretending you own the company. If I owned a company, I would not pay myself by selling small portions of the company (like a retiree holding non-dividend stocks and selling some for income). I would pay myself from the profits (like a retiree holding dividend stocks and using dividends for income). I have been tracking dividends for a long time.
I heard recently that stock buybacks are a more tax-efficient way of giving a return to investors. So do you think we should track the total of dividends and stock buybacks?
The dark side of stock buybacks can also be when CEOs buy back stocks to boost their price and sell on their way out of the company.
Closely tracking the fundamentals of companies with moats along with positive profitability, liquidity and solvency can keep you on the right track.
Several dividend ETFs to consider are SCHD, DGRW, VYM, VYMI and SCHY. Also, Vanguard and Schwab money market (I.e. SNSXX) are paying over 5%.
Lots to consider. Best of luck fellow investor.
When a corporation buys back outstanding shares of its stock, there are fewer share outstanding and the price of the stock may (or may not) go up because with fewer shares of stock outstanding (I.e. smaller supply of stock) to be owned the price of fewer shares for sale in the market may increase the price of the stock outstanding.
Apple is one example of a company that pays a relatively modest dividend but over the last several years has bought back lots of it stock and the price of Apple stock has increased - in part because earnings continued to do very well and there were fewer shares outstanding. I think if you owned Apple stock, you could look on your brokerage statements, the IRS Form 1099-DIVD you get every year or go online and see in lots of places tepee dividends paid. Where should an investor go to see how many shares of Apple stock Apple bought back AND if an investor could find that amount, how much of future prices of Apple stock is properly attributed to the buyback?
Given the investor has the control of when to take a capital gain (e.g. in year when they are in a lower tax bracket) but has no control when dividends will be paid (perhaps during a year the dividends push them into a higher marginal tax bracket) it is often the case that stock buybacks are a more tax efficient way of providing a return to investors than dividends are. With buybacks the investor decided not only how much capital gains they want to realize, they also decide when they want to realize the capital gain. With dividends, they corporation decides how big the dividends will be and when dividends will be paid. No guarantees share prices go up or dividend get paid.
Tracking stock buy backs is not only much more difficult than tracking dividends paid, the consequences of stock buy backs, while important in the price of the stock, is not the only (or even the most important component in share price). Just because a corporation buys back some of its outstanding stock does not mean stock prices go up and even if they do, it doesn’t mean you sell shares and realize a capital gain.
I think Rob is onto something by tracking actual dividends paid but I don’t see the benefit in tracking stock buy backs.
Corporations decided if and when they pay dividends, investors don’t. Generally, in brokerage accounts (and not IRAs or 401(k)s) qualified dividends are taxed at the same rate as long term capital gains (while interest paid on bonds and CDs are taxed as ordinary income. Learning how many shares of Apple stock Apple bought in 2020 is a bit more difficult (I think) than learning the dividends Apple paid in 2020. And, I don’t know how I would determine the impact fewer outstanding share of Apple after a stock buyback had directly on the price of a share of Apple stock.
Do you think it would be beneficial to track stock buy backs?
There is a metric called shareholder return that gives insight into this.
Stock buybacks would be accounted for in stock appreciation. So just track the price changes in the stock.
Hi Rob...would you include tracking returns on individual T-bills?
I would love to know if someone actively taking their RMD's would say their earlier Roth conversions accomplished what they expected in regards to RMD amounts
My retired friends were not even informed of roths before retirement. Sad.
I've been trying this strategy last year and this one. I hope it's worth it. Besides the taxes to pay, there's the increase in Medicare premiums (IRMAA). If tax rates go up dramatically in the next ten years, I'll feel like a genius. Otherwise, maybe I'm just reducing the hassle for my heirs.
We done Roth conversions for the past four years. We have converted all my wife’s IRA to Roth and after 2023, we will have converted about a third of my IRA to Roth. I have several more years until I need to take RMDs and plan to continue to do Roth conversions until then, being cognizant of IRMAA and also more importantly how much cash I want to pay in taxes now rather than later. But we will wait and see what claiming Social Security does and may do less Roth conversions as a result.
Our hope is that a significant amount of our qualified assets will be Roth, which are way better to leave to our children. Also, as I am older than my wife so the odds are pretty good she may have years as a single taxpayer so the more we get into Roth and then more we take out of my traditional IRA, even more than the RMD and pay tax as married filing jointly, the better off the survivor will be as a single taxpayer.
We hope to spread out income taxes sort of evenly over our lifetimes and to the extent we leave assets to our children, Roth IRAs will be great and the ETFs in our brokerage account will, hopefully, still get a step up in basis. Time will tell.
There are way way too many unknowns including what will be the tax law in 2026 and beyond and when will Congress pass SECURE Act 3.0, 4.0, and 5.0.
To me, given Roths are widely available today - Roth IRA, Roth 401(k), Roth 403(b), and even Roth employer matching contributions - the time to think about Roth is when you’re 30 or 35, not 60 or 65.
In retirement in addition to Social Security, it seems prudent to have maybe 25-33 percent of retirement assets in a traditional IRA given the standard deduction and progressive income fax brackets and rates. You will be little to no federal income tax up to the Standard Deduction and then a pretty low first couple of tax brackets.
An argument for more in traditional is if you’re paying for assisted living care, lots of that cost is deductible and having taxable income from a traditional IRA would be better than tax free Roth if you end up paying for assisted living care.
And maybe 33-50 percent of assets in retirement in Roth so that you can stay in low brackets both when you’re married filing jointly and if/when there is a surviving spouse but have income tax free money for consumption.
The balance would be in a non qualified brokerage account.
Seems to me investing is easy compared to income tax planning while working and in retirement. But if one has this complex problem it is a great problem to have as one has been fortunate enough to have accumulated a significant retirement nest egg.
@@davearey4922Well written and with great insights. Very much enjoyed and agreed.
How do I determine the new basis with earned dividend that was always reinvested.
I noticed SCHD is less volatile than most Index Funds. Could SCHD be used as a replacement for part of ones Bond portfolio?
I have been using vig and schd as my bond
@@joy2world97 So I'm not the only one that thinks this. Good to know. I would like to know what Rob thinks about this?
There is a book called the single best investment by Lowell Miller that you might find interesting on this subject
What is the rationale for replacing part of one’s bond portfolio with an ETF the holds about 100 stocks that pay dividends and holds no bonds at all? Are you investing in an IRA or in a non qualified brokerage account? Granted SCDH has been less volatile than many or most large cap US stock market index funds but how does SCHD’s volatility compare to your current bond portfolio?
@@davearey4922 1. The rationale is to reduce volatility. Since inception SCHD has been less volatile than the S&P 500.
2. I would never put SCHD in a taxable account. I was thinking Roth IRA.
3. Bonds are less volatile than SCHD. However, they also have a much lower rate of return.
4. I would not replace Bonds with SCHD but use SCHD as a partial replacement for them. SCHD could be used to reduce volatility within a portfolio while maintaining a higher rate of return than just holding Bonds would.
5. That is my thinking on the matter as of now. Was wondering what others opinion on this is?
Regarding RMD optimizations: @Rob, have you ever done a vid on I-ORP?
What do you mean the dividends go down? You mean they are cut, or is this just that they are eaten up by inflation but you still get then...mostly dividends are increased over time
Is interest earned in a bond fund reflected in the total return amount when looking at its performance chart?
Hi Rob, hopefully the live went well.
I remember a comment earlier where you said dividends just dropped the share price. Do you still think the same?
It's a "zero sum game", when dividends are paid out the share price drops. You do not get something for nothing!
Really appreciate you and your insights! I'm much sharper in the am than eve's, so signing off now.
Good video and an interesting approach. Always good food for thought.
Love the research Rob. Keep up the good work.
I am 69 and doing Roth conversion as I have not been taking ss and fully retired. If I live past 80 I’ll let you know if it was worth it. I have 2.7M in ira and want to reduce that.
Wow, you just discovered this now?! Here in Canada, for my retirement next year, I will live off my dividends alone and never touch the principle/capital!!
Hey Rob, always enjoy your webcasts and always learn something new. However, was surprised to hear you say that you believe you are an owner of a company merely by owning shares of stock. Legally, that doesn’t make you an owner. The “owner” of a publicly traded company is the corporation itself, which is why the company doesn’t really owe you, the shareholder, anything, including dividends as you noted. The good news is that as a mere owner of shares in the corporation you would not be legally or financially liable for anything (bad) the corporation does! 😅
Hi Rob, I'm a big fan of your content and sense of humor :). Wondering if you could find a way to position your microphone away from your keyboard or get a quieter keyboard? It's like fingernails on a chalkboard to me! Thanks!
Too slow
Oh boy. I can already see the dividend bros recontextualizing this to mean “dividends are free cash flow”. Ugh.
Dividends are irrelevant
I like the dividend growth trends in current times more as an easy way to show shareholdings that business is growing. Forget ebitda. Show me the dividend growth!
Free cash flow is the rule. Divs should only be paid from that.
Do you invest in the NOBL ETF?
@@davearey4922 No expense ratio is too high I prefer below 0.1 then even if it doesnt beat an index I didnt lose extra money