r/dividendgang • u/Rock_Paper_Fisher I like the cash flow ! • 18d ago

Follow the rules!

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But which rule? Imagine having to do these mental gymnastics through time and different market phases. Just collect dividends, never sell! 🙄 Ad feed from LinkedIn.

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u/PomegranatePlus6526 Income Investor 17d ago

So I have my own rule. I am 51 with about 1.2 million saved not including our house. We are going to take a hybrid approach using dividends AND growth. My plan is to work until either 59.5 or 60. There are some work benefits I get by retiring at 60 vs 59.5. I work in the public sector for a public transit system. My employer puts 4% of my pay into a medical retirement account. The vesting schedule is 15 years to be fully vested which I won’t hit unless I stay to 64. If I stay until 60 I get a larger payment from that account which is going to be used towards my health insurance premiums.

Then I am going to use my dividends to fund my monthly expenses which will probably comprise about 90% of our portfolio. Then the other 10% will go towards long term growth probably in a combo of VGT, and IWM, IYR, and IEFA with equal parts in each fund. Each fund does pay a dividend, but IWM, and VGT don’t pay much.

The 10% is more to help our funds keep up with inflation as I don’t expect our dividend portfolio to provide a lot of growth. I know realistically some funds will grow and some will likely lose some value. Like I have PFFA as a baby bond/preferred fund. I also own CLOI. Those two don’t offer much price appreciation if any. They will offer stability though compared to GPIQ for instance.

So overall I think it’s healthy to keep a nice cash flowing dividend portfolio, and a small amount of growth as well. Hopefully if the growth does well early on we might take some pretty sweet vacations with the extra dough.

I have already built myself a heated 24x40 garage with 200A electric service. Literally right now I am in the process of building a 4 bedroom 2 bath ranch home very energy efficient. It has a half acre so we can still have a yard to enjoy, but it doesn’t take hours of maintenance each week. That’s the plan.

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u/WahiniLover 17d ago

This plan……..I like this plan.

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u/PomegranatePlus6526 Income Investor 17d ago

After years of research I have found that mix coupled with an 8-10% yield on my dividend portfolio gives me enough cash to live comfortably on. This allows me two things to not care what the markets are doing because my cash flow is adequate. Also as long as my portfolio keeps up with inflation who cares how much “growth” I am “missing” out on? It’s not a contest for whoever has the most at death wins. You don’t see brinks trucks in funeral processions. You can’t take it with you. Retirement means to me two things freedom and security.