- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: Dividend stocks and DRIPs as a long term investment vehicle
Posted on 6/23/13 at 6:02 pm to ThaBigFella
Posted on 6/23/13 at 6:02 pm to ThaBigFella
quote:
Do you realize in the United States alone without tobacco taxes we would have to nearly double taxes on everyone to make up for the shortfall?
Double? The US collected $32B from tobacco sales and nearly $1.1 TRILLION from income taxes. The government relies heavily on big tobacco but your description is a bit of an exaggeration.
I'm not arguing about tobacco, I agree with you here. The only thing I disagree with is your thoughts on diversification, that's it.
quote:
Was this meant to be sarcastic?
Yes.
This post was edited on 6/23/13 at 6:37 pm
1
Posted on 6/23/13 at 6:12 pm to Chris Farley
What's so wrong or dumb about the comment?
Posted on 6/23/13 at 6:17 pm to ThaBigFella
quote:
ThaBigFella
Are DRIP's the best way/cheapest to buy a single company?
Posted on 6/23/13 at 6:51 pm to wegotdatwood
Look man, you make your points, and I've made mine. I wanna buy winners, yes bluechips for the most part are solid but unspectacular investments but over the last 13 years I want you to find me one blue chip thats returned more money than Altria
According to this calculator LINK
From 2000 until today these are the returns of 10 major companies with dividends reinvested
1.IBM - 110.40%
2.Coke - 90.51%
3.ATT - 45.44%
4.Exxon - 206%
5.Chevron - 330%
6.Pepsi - 139%
7.Johnson and Johnson - 125%
8.Procter Gamble - 277%
9.General Electric - (-34.22%)
10.Altria - 1,037%
Now Take those same companies and go back let's say 33 years to 1980
1.IBM - 2,817%
2.Coke - 13,610%
3.ATT - 2,453%
4.Exxon - 8,587%
5.Chevron - 3,851%
6.Pepsi - 13,750%
7.Johnson and Johnson - 10,566%
8.Procter Gamble - 8,316%
9.General Electric - 5,740%
10.Altria - 43,562%
Those companies are all near 100+ years old mind you when I say they weren't in their infancy in 1980.So over the last 13 years altria was the clear winner, and over the last 33 years altria was again the clear winner. Well the PM portion of altria was where all the growth was and thus they spun it off.You tell me would you rather be diversified just to say your diversified or would you rather buy the winners? Cigarettes have always been a winning investment of the highest order, the numbers back it up and this whole time smoking's been "on the decline"
Overall all 10 stocks did fantastic compared to any other investment you would've made like real estate over that same 33 year period. The laggard of the group was up 24 fold, that's incredible. I can promise you that your home won't be up 24x in 33 years. It seems to me that buying blue chips and reinvesting growing dividends is as sure a shot at building wealth as any that's out there today. You truly don't have to be a genius or financial guru to understand this concept. The numbers and brand names back it up.
According to this calculator LINK
From 2000 until today these are the returns of 10 major companies with dividends reinvested
1.IBM - 110.40%
2.Coke - 90.51%
3.ATT - 45.44%
4.Exxon - 206%
5.Chevron - 330%
6.Pepsi - 139%
7.Johnson and Johnson - 125%
8.Procter Gamble - 277%
9.General Electric - (-34.22%)
10.Altria - 1,037%
Now Take those same companies and go back let's say 33 years to 1980
1.IBM - 2,817%
2.Coke - 13,610%
3.ATT - 2,453%
4.Exxon - 8,587%
5.Chevron - 3,851%
6.Pepsi - 13,750%
7.Johnson and Johnson - 10,566%
8.Procter Gamble - 8,316%
9.General Electric - 5,740%
10.Altria - 43,562%
Those companies are all near 100+ years old mind you when I say they weren't in their infancy in 1980.So over the last 13 years altria was the clear winner, and over the last 33 years altria was again the clear winner. Well the PM portion of altria was where all the growth was and thus they spun it off.You tell me would you rather be diversified just to say your diversified or would you rather buy the winners? Cigarettes have always been a winning investment of the highest order, the numbers back it up and this whole time smoking's been "on the decline"
Overall all 10 stocks did fantastic compared to any other investment you would've made like real estate over that same 33 year period. The laggard of the group was up 24 fold, that's incredible. I can promise you that your home won't be up 24x in 33 years. It seems to me that buying blue chips and reinvesting growing dividends is as sure a shot at building wealth as any that's out there today. You truly don't have to be a genius or financial guru to understand this concept. The numbers and brand names back it up.
This post was edited on 6/23/13 at 6:57 pm
Posted on 6/23/13 at 6:58 pm to AUtigerNOLA
I guess I was just hoping for more substance. All you really said was "you're wrong". As I've said a few times, I don't disagree with all of BigFella's analysis, I just think its scary how many people will blindly follow other posters on here.
Posted on 6/23/13 at 7:12 pm to saintforlife1
quote:Good link, thanks
divdata.com
Posted on 6/23/13 at 7:13 pm to Chris Farley
Oh no man. I wasn't sayin you were wrong. I for the most part agree with your statements but I was just saying big fella offers some solid advice as well IMO. It doesn't seem like a bad idea to add this to the portfolio. Drips can work similar to compound interest. Granted its not compound interest, but it can offer the same benefits over the years given the right stocks. You just have to be more disciplined when you are considering this strategy as I'm sure you know. That's all I was saying. Obviously, it can be dangerous to only have this mindset. But I already have a couple of other investment vehicles in place. I think this is a good way to increase your wealth in addition to 401ks and Iras. You can look at this as diversification.
This post was edited on 6/23/13 at 7:22 pm
Posted on 6/23/13 at 7:14 pm to Chris Farley
quote:
Why not just set up a DRIP on a high div yield ETF
Can you give a couple of examples of such ETFs?
Posted on 6/23/13 at 7:30 pm to saintforlife1
Blindly follow? I just laid out a total return of a DRIP over a 33 year period, that wasn't a small sample size i just pulled out of my arse.
Take the "ETF" XLP someone mentioned, its a consumer staples ETF with a 2.78% dividend, its top 10 holdings equate 60% of the portfolio.
Procter & Gamble -13.59%
Coca-Cola Co- 9.93%
Philip Morris - 9.71%
Wal-Mart Stores Inc - 8.11%
CVS Caremark Corp - 4.73%
Pepsi - 4.63%
Altria Group Inc. - 4.25%
Colgate-Palmolive - 3.41%
Costco Wholesale Corp - 3.23%
Mondelez International - 3.2%
First off mondelez and PM are spinoffs of the old altria along with kraft. Secondly you physically have access to what percent of the ETF is what, why would you not mimic that for free if your looking for "ETF" exposure. Like I said for most of you today the fee looks like nothing at .18% but just wait till you get to that $3-$4M level if you ever get there which alot of people did by buying coke,MO,Xom 30 years ago. When you get to that level its silly to pay a few thousand a year to buy stuff you can buy on your own
60% of that fund is 10 stocks....why not mimic it without paying for that expert advice thats all i advocate.
Take the "ETF" XLP someone mentioned, its a consumer staples ETF with a 2.78% dividend, its top 10 holdings equate 60% of the portfolio.
Procter & Gamble -13.59%
Coca-Cola Co- 9.93%
Philip Morris - 9.71%
Wal-Mart Stores Inc - 8.11%
CVS Caremark Corp - 4.73%
Pepsi - 4.63%
Altria Group Inc. - 4.25%
Colgate-Palmolive - 3.41%
Costco Wholesale Corp - 3.23%
Mondelez International - 3.2%
First off mondelez and PM are spinoffs of the old altria along with kraft. Secondly you physically have access to what percent of the ETF is what, why would you not mimic that for free if your looking for "ETF" exposure. Like I said for most of you today the fee looks like nothing at .18% but just wait till you get to that $3-$4M level if you ever get there which alot of people did by buying coke,MO,Xom 30 years ago. When you get to that level its silly to pay a few thousand a year to buy stuff you can buy on your own
60% of that fund is 10 stocks....why not mimic it without paying for that expert advice thats all i advocate.
This post was edited on 6/23/13 at 7:31 pm
Posted on 6/23/13 at 7:32 pm to ThaBigFella
quote:
ThaBigFella
Love your posts Big Fella. But you need to reply to the right person in the thread. It has tripped me up a couple of times already.
Posted on 6/23/13 at 7:55 pm to ThaBigFella
quote:
60% of that fund is 10 stocks....why not mimic it without paying for that expert advice thats all i advocate.
Because if I want to add to each position I'm out $100. I rather just pay the fees at this point. It cheaper to me, and most other people, to utilize the ETF.
Saintforlife- SDY contains 60 stocks that have all increased their dividend every year for the last 25 years. Not necessarily a recommendation, but a good place to start.
Posted on 6/23/13 at 7:59 pm to ThaBigFella
VDC
Contains (63%)
1 Procter & Gamble Co.
2 Coca-Cola Co.
3 Philip Morris International Inc.
4 Wal-Mart Stores Inc.
5 PepsiCo Inc.
6 Altria Group Inc.
7 CVS Caremark Corp.
8 Colgate-Palmolive Co.
9 Mondelez International Inc.
10 Costco Wholesale Corp
Yearly dividend of 2.82%(last 2 yields)
I'm assuming this is not as lucrative as holding each of these funds individually, but is also less risky.
Am I on the right thinking track?
Contains (63%)
1 Procter & Gamble Co.
2 Coca-Cola Co.
3 Philip Morris International Inc.
4 Wal-Mart Stores Inc.
5 PepsiCo Inc.
6 Altria Group Inc.
7 CVS Caremark Corp.
8 Colgate-Palmolive Co.
9 Mondelez International Inc.
10 Costco Wholesale Corp
Yearly dividend of 2.82%(last 2 yields)
I'm assuming this is not as lucrative as holding each of these funds individually, but is also less risky.
Am I on the right thinking track?
Posted on 6/23/13 at 8:06 pm to saintforlife1
What about the two I mentioned? VIG & VYM?
Posted on 6/23/13 at 8:13 pm to jimbeam
quote:
Am I on the right thinking track?
how much capital invested?
Posted on 6/23/13 at 8:45 pm to LSUtoOmaha
quote:
Is there a way to get a DRIP in an IRA without having to pay $7.00 a pop for each purchase?
I use Sharebuilder.com -- they will reinvest all dividends for no commission. I believe some other brokers will do the same.
Posted on 6/24/13 at 1:10 am to LSUtigerME
quote:
How do you feel about VIG or VYM? I've started to put some funds into these ETFs in lieu of investing entirely in the company stocks directly.
FWIW, I put money into VYM and VPU for the purpose of having the option of an alternative revenue stream (they are in a taxable account).
The main arguement between VIG and VYM is that VIG will tend to do better in down markets, VYM better in bull markets.
Posted on 6/24/13 at 1:16 am to ThaBigFella
Wait....you don't have an IRA?
So your DRIPS aren't in a tax advantaged account?
So your DRIPS aren't in a tax advantaged account?
Posted on 6/24/13 at 2:09 am to Volvagia
quote:
Wait....you don't have an IRA?
So your DRIPS aren't in a tax advantaged account?
Are you saying DRIPs should only be done in an IRA account and not a regular online trading account like Fidelity or E-Trade even if they offer free DRIP option? Is the reasoning behind this tax savings? Can you explain how that works?
Posted on 6/24/13 at 6:41 am to saintforlife1
Won't have to pay taxes on the earnings
Posted on 6/24/13 at 7:00 am to saintforlife1
Pretty much its tax savings.
With a Roth: The advatange is that earnings and distributions will be tax free after 59 1/2 and you had the acct for at least 5 years. However, contributions are limited to $5k a year.
Traditional you are limited as well in the contributions each year.
In a brokerage acct you are not limited to the amount of money you can put in. You will be taxed on the gains.
With a Roth: The advatange is that earnings and distributions will be tax free after 59 1/2 and you had the acct for at least 5 years. However, contributions are limited to $5k a year.
Traditional you are limited as well in the contributions each year.
In a brokerage acct you are not limited to the amount of money you can put in. You will be taxed on the gains.
Page 3 of 11
Popular
Back to top
Follow TigerDroppings for LSU Football News