Investing Experts Should your long-term goal be to live off dividends?
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Dec 3, 2024 Dividend investing offers intriguing possibilities for long-term wealth. The discussion emphasizes the importance of focusing on companies with strong free cash flow, like Visa and Meta. Myths surrounding sequence risk and tax advantages are debunked, providing clarity for investors. The podcast also sheds light on evaluating dividend growth stocks and understanding the implications of dividend changes. Historical payments reveal management's confidence, highlighting a strategic approach to building income over time.
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Benefits of Dividend Income
- Living off dividends offers attractive benefits like eliminating sequence risk and tax advantages.
- It provides financial stability and flexibility, potentially allowing for part-time work or leaving undesirable jobs.
Broadcom's Dividend Growth
- Broadcom's dividend grew significantly over the past decade.
- Its dividend payout increased from $0.19 per share quarterly in 2013 to around $21 before a stock split.
Focus on Free Cash Flow
- Focus on free cash flow when evaluating dividend stocks.
- Consider metrics like dividend yield, payout ratio, history, and growth rates, but prioritize free cash flow.