07-26-2015, 01:05 PM
(07-26-2015, 09:49 AM)KenBob Wrote: I am now 59. I have come to realize that investing for retirement is a worthy goal; however, life does happen. Having gone through several lay-offs and furloughs during the great recession (I am an engineer in the construction industry), I found that an income stream is needed prior to retirement to compensate for life's setbacks.
This has directly affected my investing. The goal must be developing an income stream that can used as required, not going for capital gains that would be converted to income at retirement. For the same reason, investing is now done in a taxable account rather than the tax deferred account. I had to pay a penalty when I needed to withdraw money from a retirement account during one lay-off.
KB,
Seeing my industry drastically change within the last few years has also made me think about this subject. I would think and ponder different investment ideas in order to prep for whatever situation might creep into my life. It took me a while and the light bulb kind of went off in my head, "Hey, what about dividend investing?!?" I did research and came to conclusion that was the way to go, that I would have been better off if I was doing this 20 years ago. However, in my experience this is not what I was told to do, by friends, family or even financial experts. I was told to stay with solid well managed mutual funds or cash. Well, I should have realized that one of my best investments was that Exxon drip plan, that light bulb should have gone off when I was in my early to mid 20's. Now, having said all this, I did not do terrible in the stock market and I do have a nice padding between my 401k, ROTH and a brokerage account. The problem is that capital gains are inconsistent where dividends are more reliable. I really did not have a clue what my investments were going to bring in--when the stock market was great so were capital gains but when the market was bad...Well, I don't have to tell you what happens to those capital gains. Some of the worse advice I got were from the so-called financial pro's, does the word salesman come to mind? Now, I'm not knocking financial advisers and I will see one, when the time comes, but at least I'm being pro-active in my investment earnings. Since I've been slowly moving towards a dividend growth portfolio I am seeing what my investments bring in on a consistent schedule, it makes me feel more secure. I never saw the full picture in what dividend stocks do and how they compound your dollars. The funny thing is that it's not as hard or complicated as it seems.