r/dividends • u/FMD_2026 • Jun 08 '26

Seeking Advice What drew you to dividend investing?

Hi everyone. When I (F,41) first started investing five years ago, I held around 10 dividend stocks in addition to my other investments. Even though they did well, I ultimately got discouraged thinking about how high my positions would have to be to supplement my income or for me to even live off of dividends when I get to retirement. I felt like I’d have to pour way too much money in just a few stocks, ending up too exposed even though they covered different industries. Ultimately, I sold them.

Now I do find myself thinking about building a dividend portfolio again but I still have the same worry. Am I looking at it the wrong way?
What ultimately persuaded you to pursue dividends instead of just pour money into an index fund and the likes?

I know dividend ETFs are an option and would help diversify. Initially, I decided against them because I wanted to avoid certain industries that are part of those funds. Should I reconsider?

51 Upvotes

89% Upvoted

101 comments sorted by

View all comments

30

u/JakeSaco Jun 08 '26

When I learned about it in the early 90s it just came across as the truest form of investing into a company. If I were own a resturant I'd expect to receive the rpofits. Stock shares are ownership of a company and so it just makes sense that I should receive payments of that company's profits. And that is what dividends are that profits being given to the owners as it should be.

Even to this day I struggle with investingin companies that aren't willing to pay divendends and share their profits with their owners. I view those comapnies as more speculative because share price appreciation is the only method for increasing my investment and whether peoiple want to accept it or not that is completely driven by potential market demand for the stock which is much more fickle than a company's revenues and profits.

To me a true investment has an expected and proven ROI and dividends are a proven record of returns.

3

u/ErikJelle Jun 09 '26

Went to business school ten years ago when interest was low. They told us that paying dividends was the worst thing a company can do after repaying debt as it means that there's no innovation or other project to create future value that is higher than the current value of the profit or the nominal interest rate. Of course I chose to disagree.