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Anonymous
Retiring early/high dividend yield ETF's 2017-03-27 12:42:59 Post No. 1902868
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Retiring early/high dividend yield ETF's 2017-03-27 12:42:59 Post No. 1902868
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Are high dividend (~15%) yield ETF's decent? I've been looking at some and they seem fine. I'm pretty young and my expenses come to $400 a month with about $800 left over to save. Because I'm younger, I feel like investing aggressively in them early on would be a good idea because I can afford the risk. My goal isn't to be filthy rich, I just want to have dividends be at least a supplemental income or even my total income.
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Until you can get significant income from a 3-4% dividend you've got no business purposely seeking out dividends. If an investment has dividends that's fine but they're a tax liability until you actually retire.
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sounds like pretty simple etfs, can you post one?
15% is pretty high, I'd be worried if they have some oil royalty that's declining in output, or discounted junk bonds
there's a benefit in that you don't have to pay multiple trading fees, but a drawback in that what the etf holds you might not want to
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>>1902887
https://finance.yahoo.com/quote/ORC?p=ORC this is just one I saw that looked interesting
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>>1902880
I thought If I reinvested the dividends through DRIP or something the taxes weren't too bad, am I wrong?
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>>1902899
>orc is a specialty finance company that invests in residential mortgage-backed securities
shit like that can go right to zero
real high dividends usually means the stocks price has crashed, or there's very little growth and the board of directors needs to keep the price high
>>1902880
is a good point, if you just want a boring consistent tax friendly return buy brk.b
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>>1902868
Dividends are bad. You don't want them. Growth stocks are objectively better.
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>>1902904
Doing a DRIP on any incidental dividends you get is a fine strategy but it should be because the underlying security is a good one. For example I've had Boeing for like 30 years now on a DRIP and it's been great but their little dividend back in the day wasn't why I bought in.
Plus having all your money in dividend stocks makes tax planning harder down the road as far as minimizing taxes go.
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>>1902899
ORC is not a high yield ETF. It is a mortgage real estate investment trust. I own the stock myself, but I wouldn't pay $10.10 for it. MREITS make money on an interest rate spread, don't buy a stock like this unless you understand their business model.
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>>1902868
just buy SPY and hold for years, youll get plenty of divies and growth boot
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>>1902929
says the retard
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>>1902904
>I thought If I reinvested the dividends through DRIP or something the taxes weren't too bad, am I wrong?
You are wrong. Reinvesting dividends has ZERO effect on their taxability.
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