A loyal reader, Chereen, asked me the following question via email: “I would like to retire with a yearly income of $39,000. I wonder how much I need to put aside in order to receive this amount in dividends each year”. A blunt answer would be the following:
Since the economic crash of 2008, Wall Street is still looking for more stimulus. Not only have they asked for low interest rates but also got a promise from the FED that they will be low for several years. They also asked for the FED to help in terms of economic stimulus which led to QE1 and QE2 (and are now anxiously waiting for a hypothetical QE3). They were not entirely satisfied so the FED also danced for them (Operation Twist with bonds). And now… Wall Street is seeking another kind of stimulus. At least, this time, it won’t come from the Government.
A few months ago, I had put together a list of the top international stocks that did prove to be very popular. I believe very strongly in adding international stocks to any dividend portfolio. That does not however require opening accounts in foreign countries and trying to trade in all kinds of exotic currencies. In fact, most of the largest companies around the world, no matter where they are based, do hhave their stocks trading on US markets. Some are only available through pink sheets which is a whole other story. In most cases though, companies such as Credit Suisse (CS), France Telecom (FTE), GlaxoSmithKline (GSK) and Vodafone (VOD) which we reviewed recently are very easy to trade in the US.
In my four years as a dividend blogger, I have written hundreds of articles on dividend investing and weekly dividend increases. One common question that I receive from readers relates to companies raising distributions for a long period of time, yet their shares have a pretty low yield. It is obvious to long-term readers, which these comments come from visitors that have recently stumbled upon the idea of dividend investing, and therefore have plenty of reading to do before catching up.
I often receive email from readers asking what I think about a specific stock or an industry. I usually try to analyse these companies in the upcoming month as I think that it could be interesting for most of you to have a deeper look into these stocks.
A couple of weeks ago I wrote what turned out to be a very popular and very controversial post about how the 4% retirement rule applies to dividend investing. I received a lot of interesting feedback that I will certainly be looking into in the next few weeks. Today, I wanted to discuss one part that I was highly criticized on; my inflation assumptions. As a reminder, I wrote the post assuming a 2% long term inflation rate.
As it stands currently, the tax rate on dividends that companies pay to shareholders will rise significantly at the start of 2013. The current tax rate on the vast majority of dividends (those that fit the definition of a qualified dividend) will jump from 15% to ordinary tax income rates. To add insult to injury, personal tax rates are also set to increase and that means the dividend tax rate
Who likes paying more taxes? You? I don’t! But sometimes, raising taxes is a very good move… Back in February, President Obama deposited his 2013 budget proposal. Included in this “pre-electoral” budget, 2 major tax changes for investors:
Posting has been a bit light this week because I’ve been putting together some background stuff. I collected some evergreen content from the archives, and produced many new pages, and organized it under a centralized guide: Dividend Stocks: The Essential Guide
Last year I did some in-depth research to find long term sustainable dividend stocks and have been doing updates on this Ultimate Sustainable dividend portfolio since then in the attempt to show how well such a portfolio can perform over the long term but also show how I would manage such a portfolio. I have said it before, I do not believe in stocks that you can hold “forever”.