02-08-2022, 11:01 AM
(02-08-2022, 05:30 AM)crimsonghost747 Wrote:(02-07-2022, 04:28 PM)ken-do-nim Wrote: Remember that thanks to inflation $150k in 10 years won't be as hot as it sounds now.
This is one of my main reasons for choosing dividend growth as my main investment style. As long as my dividend growth percentage is larger than inflation, it means that I have more purchasing power every year. (excluding the effects of tax changes or sale of assets).
This is what makes it so attractive to me. As long as I can make sure that the growth rate is better than inflation then it should translate to a continuously improving lifestyle. I have no idea what I need that growing pile of spending money for but I'm sure I'll figure it out along the way.
The other option is when you have a high DIV payer, to reinvest a portion of the proceeds equal to the current rate of inflation. For instance, let's say you have an 8.5%er who rarely if ever raises the dividend. If inflation is 2.5%, you can still withdraw 6%.