01-24-2014, 12:04 AM
Kerim, I swear you are controlling my webcam and watching what I'm working on. 
You seem to always jump in ahead of me on the same topic when I'm thinking of something lately. 
I just started working on a spreadsheet a couple nights ago of our expenses currently and what I expect will change by retirement. Then plug in projected SS and the projected dividends on our current portfolio. So far, we'll only need less than 1% of our portfolio (obviously dividends) for the first few years unless we do something extravagant but I'm still thinking out some expenses we may have to incur. Of course, our expenses are much lower. If we had to spend $50K per year, I don't know what we'd do.
I tend to think many DGI'ers won't reach the goal of living off the dividends alone. I reached the conclusion that we probably won't make it about a year into DGI. That's still a goal and keeps me disciplined to search for fairly valued companies that pay a growing dividend. It's not that it's not possible, I just don't think too many are that disciplined early enough to reach that goal.
I agree with Alex, either capital or dividends are about the same in theory. The danger lies when withdrawing during a large or prolonged market downturn -- especially over several business cycles.
You seem to always jump in ahead of me on the same topic when I'm thinking of something lately. I just started working on a spreadsheet a couple nights ago of our expenses currently and what I expect will change by retirement. Then plug in projected SS and the projected dividends on our current portfolio. So far, we'll only need less than 1% of our portfolio (obviously dividends) for the first few years unless we do something extravagant but I'm still thinking out some expenses we may have to incur. Of course, our expenses are much lower. If we had to spend $50K per year, I don't know what we'd do.
I tend to think many DGI'ers won't reach the goal of living off the dividends alone. I reached the conclusion that we probably won't make it about a year into DGI. That's still a goal and keeps me disciplined to search for fairly valued companies that pay a growing dividend. It's not that it's not possible, I just don't think too many are that disciplined early enough to reach that goal.
I agree with Alex, either capital or dividends are about the same in theory. The danger lies when withdrawing during a large or prolonged market downturn -- especially over several business cycles.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan