02-05-2021, 09:21 AM
(02-25-2018, 12:39 PM)Kerim Wrote: Generally I agree with Eric.
My biggest reaction is just that, while I completely understand the desire for more consistent monthly income, using that as a structuring principle for the portfolio could diminish your returns. My instinct would be to focus on the best companies that meet your general criteria and that present the best opportunities at the time of purchase, without regard to when they pay the dividend.
Instead, you can route all of the dividends to a single account, and then calculate the monthly distribution you can pay yourself out of that. You can use a simple spreadsheet to determine the current average monthly dividend payments. So your holding account will fluctuate in value (growing most in the high-dividend months like December and March, and growing least in low-dividend months like February), but you'll withdraw the same amount each month. And with luck, that monthly amount will grow incrementally as dividends grow and you add to the portfolio.
Just reading an old thread and thought I'd chime in. A thousand times what Kerim said above. When you're really into household budgeting, you'll find you have to do this anyway to cover non-monthly expenses. I have a Checking Account, and a savings account dubbed "Checking Escrow". I have a spreadsheet that tallies up my annual non-monthly expenses (water bill, life/auto insurance, excise tax, AAA membership, snow plowing, etc.) and divides it smoothly by 12. It comes out to around $550/month. So every month I transfer $550 from Checking to Checking Escrow, and then I pay Checking back when those irregular expenses come up. So this same Checking Escrow account could be your overall holding account that the dividend payments go into.