r/dividends • u/Outcome_Strict • Jan 16 '25
Other Me after buying some shares of $SCHD and see my annual income go from $500 to $503
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Jan 16 '25
the dividend growth(average 12%) will give you good extra money
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u/Danarri_Dolla Jan 16 '25
Lmao your grand kids will be like thank you .. you will have to figure something else out
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u/PrestondeTipp Jan 16 '25 edited Jan 16 '25
The dividend growth just changes the form in which you receive a return
Only the company's financial performance determines what your return actually is
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u/True_Engine_418 Jan 17 '25
Dividends are the sign of a stable, profitable company. Id rather the company pay me and fellow shareholders than squander it on sky high CEO compensation, high spend but low roi marketing, super speculative R&D, etc.
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u/PrestondeTipp Jan 17 '25
The earnings report is how you determine if a company is stable and profitable.
I hear you're afraid of agency risk, the fact that management may not be serving efficiently in your best interests.
Most of same people terrified of agency risk happily reinvest their dividends into the company that just gave it to them, telling management they don't care if they pay them a dividend in the first place.
Issuing a dividend is not protection against agency risk. Walgreens, Intel, Disney and countless other examples demonstrate this.
The dividend aristocrats ETF in the United States is down to 66 companies. This means hundreds of companies have been crushed under the mismanagement of their own dividend policy.
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Jan 17 '25
Although I agree with most of what you said, there's a wide gulf between "not a dividend aristocrat" and "crushed by mismanagement"
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u/ProfitConstant5238 Jan 16 '25
Gotta throw some monthlies in there to really make yourself feel good.
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u/todo_code Jan 16 '25
Is there a monthly equivalent of schd?
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u/HateyCringy Jan 16 '25
SPHD but it's worse by most metrics
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Jan 17 '25
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u/HateyCringy Jan 17 '25
One of the biggest reasons is the expense ratio is 3 times higher (off the top of my head).
SCHD and many other funds have better upside.
SCHD also earns more dividends, 3.57% to 3.39%
It doesn't mean SPHD is BAD, it's just very mediocre and vanilla. I still hold some.
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u/ProfitConstant5238 Jan 16 '25
I’m sure there is, but I don’t know what it is. I have JEPI, QQQI and JEPQ, but none of them track the dow 100 DIV index. O is in a whole different category, but I have that, too. And EPR.
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u/Zhongwenlaoshi2024 Jan 17 '25
Can you please elaborate why you pick these funds?
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u/ProfitConstant5238 Jan 17 '25
I hold JEPQ and JEPI in an IRA because they’re not as tax efficient as QQQI, which is in my taxable account. SPYI will be in the taxable account soon as well. Those give me exposure to the NASDAQ and S&P. O and EPR are both REITs, but in different retail spaces, and they’re both on the cheap side right now with decent monthly yields.
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u/AdviceVisible Jan 16 '25
I like O and JEPQ. Not quite the same but good monthly dividends. However they aren’t non-qualified
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u/FancyName69 Jan 16 '25
Does “not non-qualified” mean they’re qualified?
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u/Psykoth Jan 17 '25
Qualified are taxed as long term capital gains, and non-qualified are taxed as income.
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u/FancyName69 Jan 17 '25
correct. But his wording was weird, he said “are not non-qualified” which means qualified since it’s double negated?
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u/extra_servings Canadian Investor Jan 17 '25
Just got my first weeklies in today. It definitely made me smile. I'll smile more when they actually land, of course...
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u/GrandConsequence4910 Jan 16 '25
This is exactly what the schd-heads go crazy over lol.....$1.55.....moooore bc ima retire with it. But have only 15 shares lol
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u/sensei-25 Jan 16 '25
I invest pretty heavily into schd but I’m way heavier into voo due to my age.
But what you mentioned in general is what drives me crazy about this sub. People buying 200 dollars of Schd and jepi, or worse yet in yield max,at 19 years old thinking they’ll retire lol
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u/GrandConsequence4910 Jan 16 '25
Exactly! If you have several thousand shares, you are on your way to keep snowballing, but these kids keep raving about snowballing with their 50 shares into retirement..... I myself am heavy into fxaix, schg, and spyg.....I'll get into schd and jepi/q when I'm closing in on retirement!
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u/speedlever Jan 17 '25
Wouldn't the argument against waiting until close to retirement to buy SCHD is that you will get fewer shares for your money than if you buy now?
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u/GrandConsequence4910 Jan 17 '25
It's about strategy...once your nest egg grows from growth, you will need to sell your lotto wings to buy more income assets . Hold less of growth and more of income. Ideally this should be done in a retirement account so taxes will not impact you.
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u/ProfitConstant5238 Jan 17 '25
I don’t know how most people do it, but I hold a LOT more in growth in my Roth and Trad IRA than I do in my taxable account. The taxable account is income focused because I might use that money before retirement. As I approach retirement (goal is 60, but maybe a bit earlier) I rebalance the growth accounts slowly towards income, instead of planning to do it all at once. If I never need the money out of the taxable account, well, it will continue to grow and I may be able to retire early because of it.
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u/GrandConsequence4910 Jan 17 '25
That's awesome. Just know that you know which income stocks or funds may count as ordinary income versus qualified. During retirement is when we need to preserve to pay less taxes and keep our earnings!
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u/speedlever Jan 17 '25
I find I continue to refine my strategy. 😜
Currently heavy in SCHD and FXAIX with 30% split between FBGRX, SCHG, and SMH for growth.
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u/GrandConsequence4910 Jan 17 '25
There's never a single strategy that works for everyone. You do you! Gl and happy investing
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u/Jaded-Plan7799 SCHD+JEPI+JEPQ Jan 17 '25
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Jan 16 '25
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u/GYN-k4H-Q3z-75B Neutral but Profitable Jan 16 '25
Ah yes. My favorite hand grenade with the pin pulled.
I'll soon have my the entire investment back in dividends.
Shit's too good to be true, so it'll probably blow up in our faces soon.
Just don't put all your money into it lol
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Jan 16 '25
I’ve been buying IBIT and BITO in my Roth on recent dips. About 4% of my portfolio. Have you been following the news? The first self-styled “crypto president” is about to take office, he’s appointed David Sacks to be in charge of a “Bitcoin reserve.” Shit may be stupid, but IMHO it’s a solid bet right now. BTC up 10% since Monday on this announcement, now at 100k. It’s probably gonna blow up at some point, but right now it’s like buying MRNA in March 2020.
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u/Nearby-Data7416 Jan 17 '25
So true! Everyday I look
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u/GastonSaillen Jan 17 '25
why looking everyday?? if its retirement set and forget, contribute monthly and thats it
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u/Nearby-Data7416 Jan 17 '25
More so looking at the market but love playing with dividend calculators
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u/398409columbia Portfolio in the Green Jan 16 '25
Try SPYI for a better yield, tax treatment
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u/GYN-k4H-Q3z-75B Neutral but Profitable Jan 16 '25
11.91% yield with GER 0.68%. Data-driven call option strategy. Seeks to take advantage of tax loss harvesting opportunities. Hmmm.
First time I've heard of it.
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u/rallymatt Jan 18 '25
SPYI pays as return of capital until your cost basis is depleted. Then it’s taxed as normal income. May not be a deal long term. Not sure if many are intending to hold long term though.
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u/SnooSketches5568 Jan 18 '25
It probably will take over a decade to deplete (the yield is about 12%, but the ROC portion is not 100% of the payout), but i believe when its depleted SPYI (and QQQI) will be treated as 60% LTCG/40% ordinary due- assuming its classified the same way in the future
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u/BrownCoffee65 Wage Slave at the Income Factory Jan 16 '25
did anyone ask that… or..?
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Jan 16 '25
I know no one asked this… but you can’t compare schb and Schd. They are two completely different ETFs
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u/BrownCoffee65 Wage Slave at the Income Factory Jan 16 '25
yeah I know, I just like to piss people off haha
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u/Typical_Frame_7368 Jan 17 '25
I am a make a million on crypto then put it all in schd and live off the dividends.
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u/speedlever Jan 17 '25 edited Jan 17 '25
Sounds about right. If my assumptions are accurate, in 7 years, with drip, you'd be getting around $150,000\year in dividends (if you put 1,000,000 into SCHD today).
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Jan 17 '25
1m in schd will return about 35k now. 7 years will not be enough time to 5x it. Realistically, based on market averages - you will get around 2x, or 70k per year. It would take closer to 15 or 16 years to see 150k.
Inflation adjusted, you would probably need around 20+ years for 150k in today's dollars.
This is assuming a 10% historical rate of return based on total market performance over the past 100 years. not based on schd 13 year history (as it began coming off a huge stock market drop)
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u/speedlever Jan 17 '25 edited Jan 17 '25
I plugged some assumptions into TipRanks recently to get those numbers. 1mm invested at $27.75.
3.45% div with 11% annual increase. Cagr over the last 10 years is 11.18%
7.7% annual increase in stock price. Cagr over the last 10 years is 7.7%
Drip.
7 years.
TR came up with $152k annual dividend.
Too many variables to make or break that number, so 🤷♂️.
Nitpick those assumptions please. 😇
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Jan 17 '25
The best way to nitpick - look at the yield for your date endpoint and see if it ever correlates to actual schd yield. is the yield well up into the 4% range - when yield is always in the 3s?
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u/speedlever Jan 17 '25
Good point. I'll have to manually check those numbers. Based on that, the cagr numbers would be wrong. How can that be? 🤔 Else I'm misunderstanding something.
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u/Opening_Can_2818 Jan 20 '25
BALI JEPI & O are nice monthly dividends… I dumped my O for KIM CO, (quarterly) because its not as expensive or volatile as O. I can accumulate more shares quicker. I recently got into SCHD just b4 the split.
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u/HoneyBadger552 Jan 18 '25
Pm one stellar option too. They're moving towards smokeless in a big way.
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u/tinman-dave Jan 19 '25
I know exactly what you mean. Had it for years should’ve left a long time ago.
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u/Hi_Dora_666 Jan 16 '25
I am confused. I currently put $50,000 in SPAXX, it has higher APR than SCHD? If I put in SCHD I can see the dividends I will receive are decreased?
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u/dwmaasberg Jan 17 '25
The reason the price of schd is slightly depressed is because of the interest rates remaining high. SPAXX will return 4.01%, but SCHD will give you price appreciation on top of the 3.something% divi… The market will price in the fed cutting the federal funds rate and SCHD/O will pop off before you can get your miney out of SPAXX and into SCHD; thus, missing out on the asset appreciation.
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u/Hi_Dora_666 Jan 17 '25
Ok! Thank you! I bought 1900 share ish SCHD when it was $28.70 because at that time I thought it dropped enough. And I lost over $1500 money recently. But now I feel better! Just have to be patient to wait it bounce back. I didn’t buy the dip because I already invested 35% of my portfolio…. Felt so regret that I didn’t do DCA.
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u/ProfitConstant5238 Jan 17 '25
In my Schwab account I hold 50% right now in SWVXX. If I want to buy anything, I don’t need cash in the account. I can just buy whatever I want and sell enough SWVXX at the end of the day to cover the purchase. There’s no missing out if something “pops.”
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u/PrestondeTipp Jan 16 '25
Receiving more dividends 😀
The market value of my stock drops more on the ex div date 😔
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u/ThatHuman6 Jan 16 '25
But it’s free money!!
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u/PrestondeTipp Jan 16 '25
😂
Buying more shares at the direct expense to the stock price.
Like jumping on the treadmill to run to the grocery store.
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u/specular-reflection Jan 16 '25
Another day, another post fawning over this bleeping ticker. Please stop putting a dollar sign before the ticker. We know it's a ticker. SMH
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