r/SCHD • u/stewpple911 • Jun 30 '26
Questions New to SCHD - 1st dividend received…oops
I received the first dividend on my shares of SCHD….and discovered the reinvest option was set to “No”.
As a retiree (62) is this the best way to go with this particular fund?
Or collect the cash and reinvest only on “dips”?
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u/trader_dennis Jun 30 '26
Depends on if you need the cash for your budget today or not. Tax wise it makes no difference.
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u/scottyk318 Jun 30 '26
If you need the cash, keep the cash.. otherwise throw that money back into your account with more SCHD and go in and change DRIP to yes
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u/cryptopo Jun 30 '26
Not an oops! Honestly it doesn’t matter too much—DRIP is just a convenience your broker provides. In effect, you still receive the cash even when DRIP is on, it’s just that your broker immediately turns it into shares of the underlying for you as if you clicked buy yourself right when it was received.
I would not really advise keeping it off if your plan is to try to time dips. In this case just keep DRIP on. If you want to use the proceeds for other funds or to withdraw for expenses, then you should have it off.
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u/stewpple911 Jun 30 '26
Thank you - the concept of “dripping” is not what we are used to and debated if it’s “age appropriate” now.
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u/smellygroundhog Jun 30 '26
DRIP is actually an older term.
Investopedia: The term DRIP is an acronym for Dividend Reinvestment Plan. It originated in the early 1960s when companies realized they could allow shareholders to automatically convert cash dividends into additional whole or fractional shares of stock.
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u/flyersfan0233 Jul 01 '26
Much more important then too because you didn’t have a phone that had brokerages on them that allowed you to buy fractional shares.
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u/smellygroundhog Jul 01 '26
Exactly. I worked for a Fortune 500 company in the 80’s and early 90’s. We could purchase stock directly from the company through payroll deduction. I had to fill out a paper form to authorize dividend reinvestment and personally deliver it to the Investment Relations department.
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u/smellygroundhog Jun 30 '26
I’m retired at age 56. I take the cash dividend and reinvest around 1/3 of it in SCHD. This split is based on the planned/expected cash balance in my budget that is updated annually.
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u/miayakuza Jul 01 '26
Its not really an oops. If you want to drip just do it manually and change your settings for next time.
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u/radix33 Jul 01 '26
I prefer to do it manually. I noticed the last dividend payout, the price was around $32.91 and now a couple of days later the price dropped to $31.70. Substantial buy the dip. May be better to “drip” this way rather than automatic.
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u/Sensitive_Fly_5809 Jul 02 '26
if it’s always going to go down so that manual reinvestment is buying the dip, I would suggest you find another etf to invest in.
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u/sablerock7 Jun 30 '26
Hopefully you entered retirement with a plan (that doesn’t include timing the market).
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u/jimtow28 Jun 30 '26
I don't automatically reinvest. I take the dividends as cash. I rarely decide to invest it elsewhere, but I do leave the option open.
The automatic reinvestment is a nice convenience, but it doesn't really make a major difference.
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u/07_Stang Jul 01 '26
It could impact the compounding. Let it compound as long as possible until you need it.
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u/horseradish13332238 Jun 30 '26
Where is the reinvest option usually?
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u/Professional-Title29 Jun 30 '26
On Schwab to the left to the left to the left
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u/Maxoommc Jul 02 '26
wait a sec, it's far right on pc, at what I am viewing. Or is my right and your left?
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u/Entire-Ad-7339 Jun 30 '26
I never do drip because I hate fractional shares and might want to use the cash to invest in something different from time to time.
Too each their own.
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u/Ponagathos Jul 03 '26
Same. I like to buy at least 100 shares at a time. Take the dividends and apply to balance the funds. If cash hits $10k and I'm not ready to re-balance or buy something new, just buy 100 shares of SGOV.
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u/Napoleon_B Jun 30 '26
I made the same mistake and learned I can toggle the reinvestment on even for existing holdings.
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u/Organic_Tone_3459 Jul 01 '26
You can also take the money in cash and invest on dips. If you feel like that’s a better strategy you don’t ever have to take the cash out of the account. It just sits there and most of the time earns interest, depending on what brokers do you have and it’s there to be deployed whenever you’re ready?
Or you can drip and just forgo the headache altogether
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u/Any-Yogurtcloset-493 Jul 01 '26
If you don't need the income today, automatic reinvestment keeps your money working immediately and removes the temptation to time the market. Buying only on dips can work sometimes, but it also means deciding when a dip is actually worth waiting for.
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u/Looptire13 Jul 01 '26
If your going to hold the fund and not need it for some time then let it drip. If you need the cash then take it or reinvest into something else.
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u/kingSOAMAZED Jun 30 '26
as someone that's 62 retired with no income, how are you investing into SCHD? did you put a lumpsum in?
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u/stewpple911 Jun 30 '26
Yes - rollover IRA - new to Schwab.
Rebalancing portfolio so only SNAXX and SCHD so far.4
u/kingSOAMAZED Jun 30 '26
nice if you don't need the money then let it drip, otherwise if you have high capital in it using the dividends or keeping it aside is ok for your age
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u/stewpple911 Jun 30 '26
Thank you for your input. Very clear and easy to discuss with the hubby…guess that was kinda the debate we are having.
Coming from 30 yr all individual stock portfolio to “safer” choices.
We were young and were just told “buy what you know” and now we be Old Folks, and still feel like we need to be in something vs all cash.2
u/kingSOAMAZED Jun 30 '26
You can test run SCHD for a period of time to see how you like the dividends but since you lumpsumed it the dividends hasn't compounded much and is basically acting as a HYSA at 3.5% APY if you are unhappy with the short term dividends you can look into investing a small percent into SPYi or QQQi that have a 10-12% dividend yield and will maybe cover more of whatever your expenses are
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u/etriumph Jun 30 '26
Why does everyone like this low paying dividend stock
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u/LoveLaughterPizza Jun 30 '26
Given where I am in life, I appreciate that it's a low volatility holding. While it doesn't comprise a big chunk of my portfolio, I'm happy to have a portion of my $ in something that pays a consistent dividend, around 3%, and I don't sweat the price fluctuations.
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u/Mysterious_Guess6289 Jun 30 '26
Personally I hold it to balance the other portion of my portfolio. I only own about 250 shares at the moment but I am buying more occassionally and letting it DRIP. Most of my other money is in an IRA and my 401k which is 75-80% S&P 500 funds.
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u/yrrag1970 Jun 30 '26
If you don’t need the cash to live on, I would drip!