# At What Age Should A person Get Out Of Investing In Stocks?



## fmdog44 (Jan 10, 2019)

Has anyone set a date when you will pull out a lot or all of your money in stocks or other investments and go for strictly cash to live out the remaining years? Second question where do you get your advice from?
     I am 71 and have about 45% of my money in fairly "safe" stocks/bonds (alot of dividend stocks). I have been through all the sharp downturns as well as the up swings. The latest downturn cost me money but it appears it could have seen the bottom and I did not move any money through this down turn. But I have always pondered when to sell off 100% and just live off CDs especially now that the rates are higher. I know I will not out live my money so it is looking more that I will get out in the next year or so. My only problem is I love investing so even if I don't need the money it will be nasty to watch stocks go up that I owned. Way too many "pros" are saying the bull market is a long way from over even though Jim Cramer is saying CDs are a nice place for cash right now.


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## C'est Moi (Jan 10, 2019)

We don't ever plan to get out of stocks; they are a majority of our holdings and overall have done quite well.


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## Oldguy (Jan 10, 2019)

> I know I will not out live my money





> My only problem is I love investing so even if I don't need the money


Sounds like if you won't out live your money, and you love investing, keep it where it's at and enjoy the interest (interest made and interest in investing)

As far as my plan...if the wife and I make it to 70, then SS will pay for normal living, and the 401Ks will pay for taxes/travel/unknown expenses.  2 CDs will pay for anything after 90.  No real advice...just seeing what my Mom & Dad did and 2 Aunts (both of them lived alone).


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## Camper6 (Jan 10, 2019)

Holdings in stocks give you no return unless you get dividends.

In order to get liquid assets you have to sell them.


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## Aunt Bea (Jan 10, 2019)

I'm basically a mutual fund investor at this point.

I plan to stick with a balanced portfolio of 60/40 or 50/50 stocks/bonds until I croak.

I am considering consolidating my investments into one or two mutual fund accounts and having a predetermined monthly draw deposited into my checking account if my health begins to fail, sort of an autopilot plan to keep things simple in my declining years.

As far as advice I don't need much, I read and listen to folks in a similar situation then I pretty much do what I've always done.


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## mathjak107 (Jan 10, 2019)

Never ... even at 65 you have long term money you won’t be eating with for 20 to 30 years .

unless you intend to draw a sub 3% income from your portfolio , which would be very inefficient use of your money ,you need at least 40% equities to pull 4% inflation adjusted. I am 50/50

it all depends what you want to draw ... trying to draw 4% inflation adjusted for a 30 year retirement time frame with out equities has failed to last so many times it is considered unsafe


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## mathjak107 (Jan 10, 2019)

Camper6 said:


> Holdings in stocks give you no return unless you get dividends.
> 
> In order to get liquid assets you have to sell them.


nonesense ... that dividend is a return of your invested capital which comes right off the share price. You may not have sold a thing but they did . They effectively off sold a piece of your share price .. all exchanges are required to reduce your value by an equal amount .

THERE IS NO DIFFERENT BETWEEN A 4% DIVIDEND AND DRAWING EQUAL DOLLARS FROM A PORTFOLIO OF NON DIVIDEND PAYER..ASSUMING THE SAME TOTAL RETURN .. YOUR INCOME AND BALANCE WILL BE THE SAME AND LAST JUST AS LONG .

retirees have been creating income streams via rebalancing their portfolios forever . The portfolios contain appreciation , dividends and interest  and all parts are adjusted yearly back to original allocations while producing cash to live on.

actually dividends are the least tax efficient method of drawing income . You are taxed on the entire dividend.when the same dollars come from appreciation you are only taxed on the gain portion


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## OneEyedDiva (Jan 10, 2019)

The only way I'll ever stop investing is if I have to go into a nursing home and all my money winds up paying the cost. Because we're living longer, the advice for seniors and equities has changed a bit. That's because the thought is to keep up with inflation one needs to remain invested in stocks (mutual funds, ETFs, etc.) and the percentage of stocks to fixed income vehicles based upon age has also changed. I'm pretty aggressive for my age but that's because in addition to my SS I also get a pension which means I don't have to take distributions except for my RMDs (a negligible amount since most of my investments are in a Roth). Therefore I do not have to worry about market swings


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## OneEyedDiva (Jan 10, 2019)

mathjak107 said:


> nonesense ... that dividend is a return of your invested capital which comes right off the share price. You may not have sold a thing but they did . They effectively off sold a piece of your share price .. all exchanges are required to reduce your value by an equal amount .
> 
> THERE IS NO DIFFERENT BETWEEN A 4% DIVIDEND AND DRAWING EQUAL DOLLARS FROM A PORTFOLIO OF NON DIVIDEND PAYER..ASSUMING THE SAME TOTAL RETURN .. YOUR INCOME AND BALANCE WILL BE THE SAME AND LAST JUST AS LONG .
> 
> ...



Once again I disagree with you on this subject.  You "speak" as if once the dividend lowers the share price, the share price stays the same. It does not (not if it's a good equity anyway). I have a fund that pays hefty capital gains (which also reduces share price upon distribution).  I purchased that fund for between $17 & $19 a share.  Now the share price is $46 and change. So all the shares I purchased plus several years worth of capital gains purchased via reinvesting of those distributions are worth much more than their original purchase price.  My portfolio has more examples of this kind of growth on both divs and caps. 

Next, dividends are only less tax efficient if they are held in non-Roth accounts.  When one has a Roth, as you know, all dividends and capital gains are tax free. I've read that it's better to hold capital gains paying investments in non-Roth accounts and dividend paying ones in a Roth because dividends are taxes as regular income and capital gains are not.  Of course I'm talking about buying and holding here, not jumping in and out of equities every time there's a market swing.


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## mathjak107 (Jan 11, 2019)

you are confusing the  fact your stock goes up with the mechanics and actual benefit of the dividend .


 dividends have to lower the share price , it is mandatory....... that does not mean your stock does not go up... you are confusing  issues .  follow carefully here so you can be one of the few who actually get it .

1000 shares of a 100 dollar stock  is 100k invested . lets pretend it pays  4%  , so it is  MANDATORY by the exchanges that it is to   to be reduced when it goes ex div so they drop your value automatically  ... so you get 4k and have 96k left for markets to work on . ... now the  markets act on  96k   which is made up of your  1000 shares at  96 bucks when the bell rings  and you have 4k in pocket as a return of investment in that dividend . ..

so you give them back the 4k and buy 41.666 shares  effectively returning the same 4k back to them albeit construed differently ....  now you have 1041.666 shares at 96 a share which is the exact same 100k you had before it went ex div .  it is just arraigned differently .

so lets suppose the market doubled your stock ...so your 1041.666 shares at 96 a share worth 100k  grew to  200k if you reinvested   , which  if you notice is the same as the 100k  you were at before it went ex div. in both cases it is the same 100k   that had doubled   . but if you did not reinvest the dividend you would have had only 96k left for the markets to double  so you would only have   192k  if you kept the dividend ..  see how that works .   

your stock went up from whatever you paid  for it originally to 100k in value . they gave you back 4k of it , knocked your value to 96k  by reducing the price automatically before it can trade , you then hand them back the 4k and say no thanks , keep it invested  , so they buy you 4k in more shares at the lowered price and you have the same 100k you had the night before it went ex div ....  they merely handed you a piece of your gain back and you returned it .

pre div you had 100k and 1000 shares  at 100 a share equaling 100k  , after the div and reinvestment you have 1041.666 shares at 96 a share worth the same 100k . markets open and go up 100%  , you picked a fabulous stock and it soared . in both cases you have the same exact 200k ...



no different than a portfolio  of non div stocks ...  if you have a portfolio of non div payers worth 100k  and you take out 4% you have the same 96k left and 4k in hand .  if your stocks double you have the same 192k left and 4k in hand ,,, if  you  reinvest the 4k back in  you have the same 200k .

both the dividend payers   and non payers are both redistributing the exact same gains ...   it is not how many shares you have that make up those dollars , it is the total dollars you have that is compounded on . that is why a stock split is a wash .


you can learn  more about how it works here

https://finance.zacks.com/dont-investors-buy-stock-just-before-dividend-date-then-sell-9577.html


https://www.investopedia.com/ask/answers/buy-before-dividend-then-sell/


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## mathjak107 (Jan 11, 2019)

now lets talk about the roth . follow closely .


to get 5k in a roth 401k as an example or in a conversion you need to take 6666 in pre tax dollars   to clear 5k in the 25% bracket to randomly pick one  , it can be any bracket you just need to adjust the pretax dollars ..

so lets say you put the 5k in  the roth and all your reinvested dividends and appreciation doubled your stock over time  . so now you have 10k tax free ....

well the same 6666 in pretax dollars in the traditional is 13,332 .000 if it doubles ... less the same 25% tax is the same 10k ...

so both cases got taxed the same . one got taxed up front , one at the end , but both saw the same 25% tax rate ...so effectively , yes , those dividends were pretaxed at regular tax rates  IN ADVANCE .

THAT IS WHY IN BOTH CASES THE BALANCE WOULD BE 10K NET .

so roth or not that income is taxed the same way .

now if that were a brokerage account of  dividend payers you would be taxed on 15% of the whole 4k or possibly zero if in the zero % capital gains bracket  ...

but if that was a brokerage account  in   non div payers and you pulled out 4k you are not taxed on 4k you are taxed  at 15% on just the gains or zero if in the zero capital gains bracket.

so nooooooooooo , dividends when spent are not tax efficient compared to the same draw  rate off of a portfolio of non div payers assuming the same total returns .


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## mathjak107 (Jan 11, 2019)

All performance is based on total return... your draw does not care how that return is made up . It can be distributed in a dividend , it can be all appreciation, or a comb of all ...

a 4% dividend is going to be no different than a 4% draw from a portfolio .... they both need the same total return to grow and be solvent as they absorb the payouts... they both are effected the same way when you keep the payout and don’t put it back in as a reinvestment . If you do put it back in then they both act the same way...only differences may be taxes and transactional costs ..


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## Camper6 (Jan 11, 2019)

mathjak107 said:


> nonesense ... that dividend is a return of your invested capital which comes right off the share price. You may not have sold a thing but they did . They effectively off sold a piece of your share price .. all exchanges are required to reduce your value by an equal amount .



No sir.  That dividend does not come off your share price.  If a company is profitable it will pay a dividend to the shareholders from the profits depending how may shaes you own and not from selling off a piece of the share price.  The share price stays the same or it may go up and down on the market.





> THERE IS NO DIFFERENT BETWEEN A 4% DIVIDEND AND DRAWING EQUAL DOLLARS FROM A PORTFOLIO OF NON DIVIDEND PAYER..ASSUMING THE SAME TOTAL RETURN .. YOUR INCOME AND BALANCE WILL BE THE SAME AND LAST JUST AS LONG .



I'm not sure what you are talking about.  If you own shares you don't have any income until you sell the shares or a portion of them. 



> retirees have been creating income streams via rebalancing their portfolios forever . The portfolios contain appreciation , dividends and interest  and all parts are adjusted yearly back to original allocations while producing cash to live on.



That too I don't understand 





> actually dividends are the least tax efficient method of drawing income . You are taxed on the entire dividend.when the same dollars come from appreciation you are only taxed on the gain portion



That too depends on the country or possibly the state on how they treat dividends when filing an income tax return.  There may be such a thing called a dividend tax credit applied.


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## mathjak107 (Jan 11, 2019)

Camper6 said:


> No sir.  That dividend does not come off your share price.  If a company is profitable it will pay a dividend to the shareholders from the profits depending how may shaes you own and not from selling off a piece of the share price.  The share price stays the same or it may go up and down on the market.
> 
> That too depends on the country or possibly the state on how they treat dividends when filing an income tax return.  There may be such a thing called a dividend tax credit applied.



you sir are very wrong and really do need to  start to learn about this stuff if you are going to comment . .  dividends are subtracted off the share price and mandated  by  exchange rules  to be done that way ., see  the mandated rules below  or better yet , learn from the links above ...

market action going forward is on a reduced value when the market opens . like i said if you had 100k before it went ex div , in the morning you have 96k invested at the ring of the bell and 4k in hand .

if you give back the 4k and reinvest it , you have the same 100k compounding that you had pre div . just more shares at a lower price making up the 100k .

if the stock doubles and you reinvested you have the same 200k  you would have had if it did not go ex div ...if you did not reinvest the dividend and the stock doubles  you only have 192k ...

what part of the reduction being mandatory don't you get ?


companies don't pay dividends profit or not  ,. dividends are voted on by the board quarterly and paid even when companies  have a foot in the grave ... many dividend payers have gone bankrupt and paid right up to the end .  ever hear of gm , ge , kodak ? to name a few .

sorry wrong again on the taxes . unless you are in the zero capital gains bracket in a brokerage account  that entire dividend is taxed unless it is a return of capital as reits do . 

you are taxed on the entire 4% in my example . drawing 4%  out of a portfolio of non dividend payers is only taxed on the gain portion not the whole 4% .

to be in the zero capital gains bracket your total taxable income plus the dividend or capital gain has to all fit in the lowest bracket . but that applies to all capital gains and dividends that qualify not just dividends .



FINRA MANUAL :

5330. Adjustment of Orders

(a) A member holding an open order from a customer or another broker-dealer shall, prior to executing or permitting the order to be executed, reduce, increase, or adjust the price and/or number of shares of such order by an amount equal to the dividend, payment, or distribution on the day that the security is quoted ex-dividend, ex-rights, ex-distribution, or ex-interest, except where a cash dividend or distribution is less than one cent ($0.01)


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## mathjak107 (Jan 11, 2019)

Camper6 said:


> I'm not sure what you are talking about.  If you own shares you don't have any income until you sell the shares or a portion of them.
> 
> 
> That too I don't understand
> ...




obviously there is a lot you don't understand .

as retirees we have lots of ways of creating income . it is all based on total return .

there is no difference selling some shares in a 100k portfolio that had a 4% total return  then a 4% dividend ...

the dividend stock needs to see at least a 4% capital appreciation to offset the dividend subtraction and still have 100k left ,  the portfolio needs at least a 4% total return to sell some shares and have the same 100k left 

whether the company sells of a piece of your share price or you sell a piece of your shares is identical .

so this year i had to rebalance  back to my 50/50 mix since equities fell to 40%  plus i need my years cash .

i sell off enough bonds to do both . i added to stocks and i put my years money in the checking account .

all year dividends , interest and appreciation all add up to the total return and it is the total return that matters when spending down , not what the total return is comprised of .  unless you want your stock allocation to go higher and higher at some point in a bull you need to rebalance back to your preferred allocation ..

in down years bonds get sold to fill the gap in your income and in bull markets equities get sold to fill the gap in income .   but in the end it does not matter how you raise your spending money .

having dividends just makes it easier because the company gives you a piece of your investment back and takes it off your investment balance just like selling shares does in a portfolio .  of course markets can pull things back up but in both cases you have less dollars invested unless total return brings you back up .


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## Bullie76 (Jan 11, 2019)

mathjak107 said:


> unless you intend to draw a sub 3% income from your portfolio , which would be very inefficient use of your money ,you need at least 40% equities to pull 4% inflation adjusted. I am 50/50



How can you say drawing less than 3% is an inefficient use of your money? Many don't need it and want to leave a legacy(not me). Or have plenty stockpiled for nursing homes and end of life issues. 

As far as AA goes as we age, it's a personal decision. No one size fits all. One conservative method is the 100 rule. 100 less your age = stocks....the rest goes in fixed income. I'm actually more conservative than that but many use it as a guideline. Many are more aggressive.


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## mathjak107 (Jan 11, 2019)

Bullie76 said:


> How can you say drawing less than 3% is an inefficient use of your money? Many don't need it and want to leave a legacy(not me). Or have plenty stockpiled for nursing homes and end of life issues.
> 
> As far as AA goes as we age, it's a personal decision. No one size fits all. One conservative method is the 100 rule. 100 less your age = stocks....the rest goes in fixed income. I'm actually more conservative than that but many use it as a guideline. Many are more aggressive.



because if it is legacy money then it is not for you correct ???? so having it not in assets that grow over decades then would still be inefficient use of your money if it was in only  fixed income .

the point being that if you are going to draw an income off of your portfolio 4% is so conservative that 90% of the time you die at the end of 30 years  with more than you started .. 70% of the time you die with 2x what you started and 50% of the time you die with 3x what you started .

so why not use at least 40% equities and even if you don't want 4%  to spend why not let it accumulate for heirs or give them some now while you can see them enjoy it or give to the causes you support.

in my opinion not using at least 40% equities seems to make inefficient use of what you worked a life time for . either for yourself or heirs . just because you have allocated to be able to take 4% does not mean you have to .

we certainly don't spend more than 3-1/2%  a year but we know we could . if it was all fixed income we would not only not be able to safely take 4%  but the legacy money would not grow to its potential .

yeah , i get it not everyone wants to be in equities . but " feeling good " does not always go hand in hand with what makes good financial sense.

 fixed income has not only grown legacy money  barely above the rate of inflation but for those living on it why take a 25% pay cut from what you could draw with as little as 40% equities 

does that reason make sense to you ?


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## mathjak107 (Jan 11, 2019)

Camper6 said:


> No sir.  That dividend does not come off your share price.  If a company is profitable it will pay a dividend to the shareholders from the profits depending how may shaes you own and not from selling off a piece of the share price.  The share price stays the same or it may go up and down on the market.
> 
> 
> .



just ask yourself , if it wasn't for the fact the exchanges have to roll the price back by the payout , why would someone pay the same price for a stock that just paid out tens of millions of dollars in their value the next morning ? no one would ever pay the pre-div price and not get the dividend ... let the profits replace the millions for  next quarter and then the stock would be worth the same . so exchanges  have to take whatever the closing price was and execute all the waiting orders at the lower prices .  ..the exchange lowers the offers automatically reducing the price before the open so all market action is on the lower price .  in this case if you don't give it back  as a reinvestment you had a 100k in the stock , now you have 96k .... 

reinvesting gives you back your 100k at the open .


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## Bullie76 (Jan 11, 2019)

mathjak107 said:


> because if it is legacy money then it is not for you correct ???? so having it not in assets that grow over decades then would still be inefficient use of your money if it was in only  fixed income .
> 
> the point being that if you are going to draw an income off of your portfolio 4% is so conservative that 90% of the time you die at the end of 30 years  with more than you started .. 70% of the time you die with 2x what you started and 50% of the time you die with 3x what you started .
> 
> ...



I really don't give a rats ass how you would invest your money. If you want to be aggressive....fine. I don't and I'm fine with it. 

I don't think I have ever seen a poster so full of himself.


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## mathjak107 (Jan 11, 2019)

aggressive ???/ 50/50 ain't aggressive ..


i spent a lot of years learning what i needed to learn and put in a whole lot of time learning the basics    . so if knowing what i am talking about is full of myself , then yeah , i will go with that .


 i  disprove the bull shit and myths that constantly get posted so those who want to learn can learn . obviously you are not one of them . ..so don't read my posts


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## KingsX (Jan 11, 2019)

.

Thank God,  I have been a conservative saver all my life which enabled me to retire comfortably early [age 55] and totally out of debt [including my house.]  I was able to do that [as a single mom with a modest salary] without one cent profit from the stock market.  In fact, the one and only time decades ago I had invested in a stock mutual fund, I lost money [thank you, God, for that valuable life lesson.]   

.


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## mathjak107 (Jan 11, 2019)

people make due with whatever they have . everyone backs in to a lifestyle that works around what they have ,. but some could have had a lot more,  or led  better less stressful lives  with more choices  with little  long term risk  ...


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## Camper6 (Jan 11, 2019)

mathjak107 said:


> you sir are very wrong and really do need to  start to learn about this stuff if you are going to comment . .  dividends are subtracted off the share price and mandated  by  exchange rules  to be done that way ., see  the mandated rules below  or better yet , learn from the links above ...
> 
> market action going forward is on a reduced value when the market opens . like i said if you had 100k before it went ex div , in the morning you have 96k invested at the ring of the bell and 4k in hand .
> 
> ...



You don't know what you are talking about.  A dividend does nothing to the share price of the stock you hold. It's a dividend at the option of the company that you hold the stock in.  They can issue a cash dividend and it does not change the value of the stock you hold unless it might be traded.  That's the only thing that changes a share price.  Bid and ask.

I'm not going to bother with your comments anymore.  Sorry.

Regular cash *dividends* are those *paid out* of a company's profits to *the* owners of*the* business (i.e., *the* shareholders). A company *that* has preferred stock issued must make *the dividend payment on* those shares before a single penny can be *paid out*to *the* common stockholders.Feb 25, 2015

*What are Dividend Stocks? - Dividend.com*


https://www.dividend.com/dividend-investing-101/what-are-dividend-stocks/


If the stock is trading at $20.00 it stays at $20.00 regardless of whether a dividend is issued except if it is traded on the market.

The dividends come from the retained earnings of the company.


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## mathjak107 (Jan 11, 2019)

nonsense . go learn about what you are talking about . if you can understand english it is right in the finra rules  i posted above . you could not be more wrong . exchange computers AUTOMATICALLY LOWER THE SHARE PRICE 

---------------------------------------------------------------------------------------------------------------------------------------
Here is your first lesson 

"*Effects on Stock Price*

Because paying a dividend lowers the amount of money a company is worth, the stock market responds by lowering the price of the company's shares . Finra rules mandate all prices are lowered by the exchanges.

  For example, say a company is worth $50 million and has 2.5 million shares outstanding. Based on that valuation, an investor would be willing to pay $20 per share. If the company pays a $1 million dividend, or 40 cents per share, the company would still have 2.5 million shares outstanding, but only be worth $49 million. So, after the dividend the market would only value the stock at $19.60 per share. All trading begins at 19.60


*No Loss for Current Shareholders*

Even though the price of the stock goes down after a dividend, current shareholders don't lose out. Instead, their wealth just takes a slightly different form -- it's split between the reduced share value and the dividend payment. For example, say you owned shares worth $20 each before a 40-cent per share dividend. After the dividend, your stock is only worth $19.60. However, you now have 40 cents in your pocket from the dividend payment. Adding that 40 cent dividend to your share value of $19.60 puts your total worth at $20 -- right where you were before the dividend.
 

https://finance.zacks.com/dont-investors-buy-stock-just-before-dividend-date-then-sell-9577.html


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## bingo (Jan 11, 2019)

we just closed it all out before the recent drops....we wanted to pay off everything completely. ..totally out of debt....we are 65 &64...it'll be enough for what we need from social security. ...best to you


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## hollydolly (Jan 11, 2019)

Apologies for taking this off topic for a second, but I don't know if I'm the only  lurker to find this thread fascinating, and confusingly informative!!!


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## mathjak107 (Jan 11, 2019)

It is only confusing because people parrot what they hear from other misinformed people instead of researching things from proper sources . So they don’t understand how things work And end up believing their own bull spreading more misinformation


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## bingo (Jan 12, 2019)

mathjak107 said:


> It is only confusing because people parrot what they hear from other misinformed people instead of researching things from proper sources . So they don’t understand how things work And end up believing their own bull spreading more misinformation



i luv that!!


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## RadishRose (Jan 12, 2019)

I don't have enough money to know what anyone is talking about here.


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## mathjak107 (Jan 13, 2019)

actually the less you have the more important making efficient use of it  and developing a safe draw rate becomes . those in that position would likely have done better if they did understand..

do you know here in america  you can take a mere 1000 dollars out of an ira for a vacation or expense and see the marginal effective tax rate  on that 1k cost you 47% in taxes . that is because of the two moving targets as to how social security is taxed and once it is it gets added to income which creates more tax on the social security and around and around we go .

so the less you have the more important it becomes to get things right . that includes investing efficiently to meet your goals and controlling taxes in an efficient manner .. knowledge is power as they say.

we don't know about all the things we don't know .. so we only judge how we are doing by what we have and what we know ... the fact that we could have had more as well as a better plan is something we don't consider .  money may not buy happiness but it can certainly buy choices . so the more we have available to us the more choices we can have when things come up .

i know many retirees who sweat every unexpected expense . their  lives are so stressful .  if they could have done some things differently they  might have been able to give themselves a bigger cushion .

heck , before i got close to retirement i thought because i was doing well as an investor ,what else do i need to know ?     boy was i wrong !    by the time i learned all the things i did not know  tax wise my situation sucked . it could have been so much  better  had i known all the things i first learned to late .

i could have had an aca subsidy from 62-65 ,  i could have had tax free ss for a while , i could have taken up to 42k a year out of future rmd money at as little as 4% tax  but it all required setting the building blocks up many many years earlier . now  was to late.

somethings to consider when your assets and income are lower .


the tax gods give us all a tax gift . if we can keep our taxable income low enough  , a couple can pull 24k out of an ira tax free  using just the standard deduction .


they can pull over 40k out at as little as 4% effective tax ...  that is an insane deal compared to rmd's later ..


so the question now is ,  if you take ss early  how will not being able to take that nice juicy tax free or low tax money effect you long term . if you delay ss longer  can you take advantage of that money ?


how will spending down invested assets effect you if you delay ?  what about any aca subsidy you may need from 62-65 ?  what about roth conversions if you delay and income is lower ?


what about lower rmd's vs  higher ss check and the effect on your wife as a widow now that she files single ?


further more how you invest may effect your ability to control your income . dividends are something you can't control or turn off and on . if taxable income is critical wold you be better off drawing money from appreciation where only the gain is taxed and not the entire dividend ?


i can give you so many questions that come up once you try to integrate ss with your situation  and have lower resources where every dollar additional  counts ..


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## fmdog44 (Jan 14, 2019)

I am thinking bout closing my Merrill Lynch SEP IRA because they have made some dumb mistakes with my money. Can I ask SOC Sec. how much tax they will take out before I move on it. My income is my Soc Sec check and stock dividends most of which I reinvest. I don't want to get hammered with tax if I do this.


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## mathjak107 (Jan 14, 2019)

you lost me .... what does ss have to do with your personal income tax . you tell ss what to withhold if anything  out of your ss check if you want .  why not just roll it over to fidelity or vanguard ?


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## Oldguy (Feb 26, 2019)

Mathjak107 wrote 





> what about lower rmd's vs higher ss check and the effect on your wife as a widow *now that she files single* ?



So glad I re-read this whole thing...was still using married tax rate on my spreadsheet for "Retirement plan for one person"...updated my spreadsheet and had to re-figure some calculations to check that everything 'should' work out.


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## mathjak107 (Feb 26, 2019)

yep filing single and having rmd's can be pretty painful


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## fmdog44 (Feb 27, 2019)

mathjak107 said:


> you lost me .... what does ss have to do with your personal income tax . you tell ss what to withhold if anything  out of your ss check if you want .  why not just roll it over to fidelity or vanguard ?



Because I pay most or all of my bills with my SS$.


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## mathjak107 (Feb 27, 2019)

fmdog44 said:


> Because I pay most or all of my bills with my SS$.


I still have no idea what you are getting at


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## Nihil (Feb 27, 2019)

I'm not a capitalist. However, if I were to play the game, I'd use this strategy, which seems obvious to me, until I think no more...


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## mathjak107 (Feb 28, 2019)

i rather go to vegas and get dinner and a show then these silly trading systems ....


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## Butterfly (Feb 28, 2019)

fmdog44 said:


> I am thinking bout closing my Merrill Lynch SEP IRA because they have made some dumb mistakes with my money. Can I ask SOC Sec. how much tax they will take out before I move on it. My income is my Soc Sec check and stock dividends most of which I reinvest. I don't want to get hammered with tax if I do this.



I don't think SS would have that answer -- they withhold what you  tell them to.  IRS is the one who says what the tax hit will be, not SS.  Can't you just use one of the online worksheets to see what the tax hit might be?  I used the IRS worksheet when trying to decide how to pay for the roof I'm going to need.  I know it might be a little off, but you could enter this year's numbers, along with the amount you'd be withdrawing and I think you'd get a pretty good idea.

If it were I, I'd roll that Merrill Lynch account over into something else, rather than just take it out, because I wouldn't want to take the tax hit.


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## Nihil (Feb 28, 2019)

mathjak107 said:


> i rather go to vegas and get dinner and a show then these silly trading systems ....



I don't like Vegas either, but I'd learn to count cards before I went.


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## Knight (Mar 1, 2019)

mathjak107 said:


> i rather go to vegas and get dinner and a show then these silly trading systems ....


Living in Vegas & using our soc. sec. for fun money beats living where they roll up the streets at 7 p/m. For those not familiar with "rolling up the streets" that's when  you live where there is nothing to do after 7 p/m.


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## Aunt Bea (Mar 1, 2019)

Knight said:


> Living in Vegas & using our soc. sec. for fun money beats living where they roll up the streets at 7 p/m. For those not familiar with "rolling up the streets" that's when you live where there is nothing to do after 7 p/m.



Enjoy Vegas, if you come to see me better get here before 7:00 pm!


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## Knight (Mar 1, 2019)

Aunt Bea said:


> Enjoy Vegas, if you come to see me better get here before 7:00 pm!



Lucky for us never stopping investing makes it possible to enjoy things like Sunday brunch at Bally's Sterling Buffet. To each their own because tolerating risk is not or everyone. Great pic. reminds me of driving across Kansas


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## mathjak107 (Mar 1, 2019)

Yep ,we are retired 3-1/2  years drawing 6 figures a year from our portfolio and we are still higher then the day we retired ...we run 40-50% equities in a risk parity type portfolio that while not swinging for the fences in the up markets , it makes money as well in the down markets


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## Aunt Bea (Mar 1, 2019)

Knight said:


> Lucky for us never stopping investing makes it possible to enjoy things like Sunday brunch at Bally's Sterling Buffet. To each their own because tolerating risk is not or everyone. Great pic. reminds me of driving across Kansas



I wasn't talking about income or investing I was talking about my preference for living a quiet life!

Imagine your Aunt Bea on the Vegas strip!


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## Nihil (Mar 1, 2019)

Knight said:


> To each their own because tolerating risk is not or everyone.



It's that I don't want to be a part of or support capitalism. It's inefficient, neurotic, and slavery.

Yes, I've been this way all my life.


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## Butterfly (Mar 1, 2019)

As to the original poster's question about what age should you get out of investing -- I guess I don't see the point in the question.  Why would you get out of investing just because you are older?  What would a person do then, keep all their money under their mattress?  Put it into a savings account or money market paying almost nothing?  It doesn't make sense to me.

I certainly wouldn't want to liquidate now that markets are down, and I don't really see any good reason to liquidate when the markets are down, either.


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## mathjak107 (Mar 2, 2019)

Butterfly said:


> As to the original poster's question about what age should you get out of investing -- I guess I don't see the point in the question.  Why would you get out of investing just because you are older?  What would a person do then, keep all their money under their mattress?  Put it into a savings account or money market paying almost nothing?  It doesn't make sense to me.
> 
> I certainly wouldn't want to liquidate now that markets are down, and I don't really see any good reason to liquidate when the markets are down, either.



over long periods of time avoiding investing has been the riskiest choice .. it has the highest failure rate and pay cuts were needed most often ... there are enough ways to invest today and control volatility  so avoiding investing really is not a great choice unless you are so wealthy money you can live on low draw rates..

the difference in draw between a 50/50 mix and using fixed income alone  is almost 2x .


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## rkunsaw (Mar 2, 2019)

Butterfly said:


> As to the original poster's question about what age should you get out of investing -- I guess I don't see the point in the question.  Why would you get out of investing just because you are older?  What would a person do then, keep all their money under their mattress?  Put it into a savings account or money market paying almost nothing?  It doesn't make sense to me.
> 
> I certainly wouldn't want to liquidate now that markets are down, and I don't really see any good reason to liquidate when the markets are down, either.


I agree.


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## retiredtraveler (Mar 2, 2019)

rkunsaw said:


> I agree.



There is a reason for the question. The basic 'truth' about stocks is that they go up and they go down. As Suze Orman likes to point out, one needs to have a 5+ year horizon, where the money in stocks are not needed, in order to recover from a major downturn. That's really the major issue about stocks. What happens to a 75 year old invested in stocks, and a recession hits?


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## mathjak107 (Mar 2, 2019)

retiredtraveler said:


> There is a reason for the question. The basic 'truth' about stocks is that they go up and they go down. As Suze Orman likes to point out, one needs to have a 5+ year horizon, where the money in stocks are not needed, in order to recover from a major downturn. That's really the major issue about stocks. What happens to a 75 year old invested in stocks, and a recession hits?



more nonsense ...

   why would a 75 year old  be invested in 100% stocks unless it was for legacy money for heirs ?  if that is the case they are investing based on the heirs time frame not theirs ... if he maintained a 40-60% equity portfolio stocks would likely never be sold when down in their lifetime , bonds would be sold when rebalancing.  think about it , if stocks are down , bonds would be sold to raise cash as well as likely buying more equities , not selling equities .

in fact hypothetically if he was 100% equities all those years , his balance would be so much higher over decades of time that even some equities being sold at a loss would still leave them just fine ...

this  example you gave of that 75 year old is what  happens if you don't left facts get in the way of a good story line


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## Aunt Bea (Mar 2, 2019)

IMO the 5+ year rule makes sense if you are really saving and not actually investing.

If you are *saving* for a house, automobile, vacation, etc... then I would follow the 5+ year rule.

If you are a senior with a guaranteed income stream and a cash cushion to cover emergencies then I would not be concerned about the 5+year rule.

IMO we should always listen to the conventional wisdom and then see how it actually applies to our own situation.


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## Knight (Mar 2, 2019)

Aunt Bea said:


> IMO the 5+ year rule makes sense if you are really saving and not actually investing.
> 
> If you are *saving* for a house, automobile, vacation, etc... then I would follow the 5+ year rule.
> 
> ...



I think this  by Aunt Bea really sums it up  

Quote from quote
"how it actually applies to our own situation"


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## mathjak107 (Mar 2, 2019)

Knight said:


> I think this  by Aunt Bea really sums it up
> 
> Quote from quote
> "how it actually applies to our own situation"



you need to match money to the time frame ..but remember ,even at 65 you have long term money you won’t eat with for 25 to 30 years .. that can all be aggressively invested ....

even bond funds need to be matched to needs .. I would never use a total bond fund for money I need in less than 6 years since the fund has a 6 year duration .. I would use a short term bond fund


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## fmdog44 (Mar 2, 2019)

Butterfly said:


> As to the original poster's question about what age should you get out of investing -- I guess I don't see the point in the question.  Why would you get out of investing just because you are older?  What would a person do then, keep all their money under their mattress?  Put it into a savings account or money market paying almost nothing?  It doesn't make sense to me.
> 
> I certainly wouldn't want to liquidate now that markets are down, and I don't really see any good reason to liquidate when the markets are down, either.



Why invest if you no longer have to? I started 40 years ago and still have about 35% in the market but I don't need to be there. I invested when I started with the idea I would build a sum that would be my holdings until I die. Is that not the reason to invest? To live without worrying about money? We invest to increase our holdings so we can afford to live a we please. The only, and I mean only reason I am still in is because I love the challenge of winning.


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## mathjak107 (Mar 2, 2019)

fmdog44 said:


> Why invest if you no longer have to? I started 40 years ago and still have about 35% in the market but I don't need to be there. I invested when I started with the idea I would build a sum that would be my holdings until I die. Is that not the reason to invest? To live without worrying about money? We invest to increase our holdings so we can afford to live a we please. The only, and I mean only reason I am still in is because I love the challenge of winning.




why not invest ?  do you know what your money needs will be health wise down the road ?   we are hit with all kinds of unexpected unplanned expenses .. my wife and i have been hit with tens of thousands  in dental ..we also have no clue as to future inflation ..  for those who retired in 1965/1966 inflation was 2.50% -3.50% . who would have guessed in 3 years time it would have doubled and by 1974 it would be 11%. it was crushing to a retiree. but with inflation so low who ever expected a 4x increase coming . 

so resting on one's laurels is not a good idea ... it is quite safe investing at 40% equities in broad based funds . something like the permanent portfolio from harry brown can be so boring it's volatility can be like watching paint dry , yet it will keep you well a head of inflation  .

there are always things not even on the radar yet just waiting to whack us with major expenses .


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## Knight (Mar 3, 2019)

mathjak107 said:


> you need to match money to the time frame ..but remember ,even at 65 you have long term money you won’t eat with for 25 to 30 years .. that can all be aggressively invested ....
> 
> even bond funds need to be matched to needs .. I would never use a total bond fund for money I need in less than 6 years since the fund has a 6 year duration .. I would use a short term bond fund


I'm not sure what you intend by this post of yours. Are you agreeing with Aunt Bea  when it comes to investing people will think about  "how it actually applies to our own situation"?


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## mathjak107 (Mar 3, 2019)

yes , i agree with her ...it is important to match the investment to the time frame ... so even someone using fixed income should not be buying a total bond fund for money they need in less than 5 years ...they should be using a very short term bond fund for money today , a 1-3 year bond fund for those  years , etc .  while a 50/50 mix works well you still need to put the bond side investments  together so the time frames work .


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## Butterfly (Mar 3, 2019)

fmdog44 said:


> Why invest if you no longer have to? I started 40 years ago and still have about 35% in the market but I don't need to be there. I invested when I started with the idea I would build a sum that would be my holdings until I die. Is that not the reason to invest? To live without worrying about money? We invest to increase our holdings so we can afford to live a we please. The only, and I mean only reason I am still in is because I love the challenge of winning.



I just don't see the point of keeping your money in a sock or something if it can work for you and at least offset inflation.


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## retiredtraveler (Mar 3, 2019)

> I just don't see the point of keeping your money in a sock or something if it can work for you and at least offset inflation.



I agree. The least one can do (and some will only call this saving, not investing), is to put money into CD's or a money market where they make something with virtually no risk. No one should be sitting on a bunch of cash unless it's intended to purchase stocks at some time or is to be used for an anticipated expense.


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## WhatInThe (Mar 3, 2019)

With a longer life span I'd continue to actively invest as long as possible. Nothing big but steady. There income producing income mutual funds out there along with bonds. You'll need money until the day you leave this earth so why stop producing it. Some can stop well before their senior years and others will struggle for income until it's check out time. If nothing else I regret not working much harder or starting serious many more years prior to retiring.

Traditional thinking ie retire don't do poop for a decade or two is all but extinct. I'd love to be in a position to wonder what to do with my time but it gets more used up the older I get. To stay sharp you need to do things like think about investing , closely follow news etc. In other words continue to invest it until it's financially not favorable or you are incapable. That goes for other things as well.

And this brings up another point. Not only should saving/investing continue in their senior years the young need to work harder on it as well. In other words just like learning etc investing, saving for the future is on going process as is the need. If you can live off social security and a pension go for it. But I've found there too many unexpected events that require financial solutions. I will say to that I can make more off investing as a senior than going to work in Walmart or the library. Why should I put myself through the hiring process, subject myself to management and employee shenanigans, work rules, goals, quotas and scheduling issues when I can make just as much if not more from own business of investing.


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## mathjak107 (Mar 4, 2019)

people just have a tendency to do the wrong thing financially  .. it is rare that what feels good mentally is the right thing financially ... whether it is hiding under a rock avoiding anything volatile or accelerating mortgage payments  dumping way to much money in to their home as opposed to other  more liquid , greater growth potential investments .

they also do not understand the difference between risk and just volatility


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## Knight (Mar 4, 2019)

Nihil said:


> It's that I don't want to be a part of or support capitalism. It's inefficient, neurotic, and slavery.
> 
> Yes, I've been this way all my life.


I'm curious. Do you think socialism is a better system to live under? If you do then maybe you can explain why people are not trying to enter & live illegally in Venezuela.

I'm really curious about the slavery part. Long time ago I had a conversation with a fellow employee that expressed that same thought. I asked him why he didn't take all his ability & start a business so that he was not a slave to our employer. He didn't have an answer he just parroted something he had heard.


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## fmdog44 (Mar 11, 2019)

Butterfly said:


> As to the original poster's question about what age should you get out of investing -- I guess I don't see the point in the question.  Why would you get out of investing just because you are older?  What would a person do then, keep all their money under their mattress?  Put it into a savings account or money market paying almost nothing?  It doesn't make sense to me.
> 
> I certainly wouldn't want to liquidate now that markets are down, and I don't really see any good reason to liquidate when the markets are down, either.



I never meant to include income investments. I have maybe 10 CDs, an annuity, savings, a large position in a dividend mutual fund and a stock portfolio. I stopped investing in the mutual fund and my stock portfolio years ago and take the yields off the CDs if I feel I need it. If, not I simply roll them over.  Age alone is not the issue rather, the safe dollars factored in with age. In 2008 the Dow fell 54% and at the time that was acceptable but today it is not. "Will I outlive my money"? is the point of retirement/investing. If your answer is yes then why throw money in to an aggressive fund or stock? Inflation is 2% and my CDs pay more so I am making money while minimizing risk. I think my OP was misleading and I apologize for that.


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## mathjak107 (Mar 11, 2019)

fmdog44 said:


> I never meant to include income investments. I have maybe 10 CDs, an annuity, savings, a large position in a dividend mutual fund and a stock portfolio. I stopped investing in the mutual fund and my stock portfolio years ago and take the yields off the CDs if I feel I need it. If, not I simply roll them over.  Age alone is not the issue rather, the safe dollars factored in with age. In 2008 the Dow fell 54% and at the time that was acceptable but today it is not. "Will I outlive my money"? is the point of retirement/investing. If your answer is yes then why throw money in to an aggressive fund or stock? Inflation is 2% and my CDs pay more so I am making money while minimizing risk. I think my OP was misleading and I apologize for that.



inflation was 2.50% prior to 1965 too .. retirees never imagined in a few short years inflation would sore by 4x ....they were blindsided and ended up being the group the 4% safe withdrawal rate was founded on


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## fmdog44 (Mar 12, 2019)

mathjak107 said:


> inflation was 2.50% prior to 1965 too .. retirees never imagined in a few short years inflation would sore by 4x ....they were blindsided and ended up being the group the 4% safe withdrawal rate was founded on



Prior to 1965 a miniscule percent of Americans had any money invested in anything. What were the interest rates banks were paying back then? By the way who cares about what our parents did with their money?


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## mathjak107 (Mar 12, 2019)

fmdog44 said:


> Prior to 1965 a miniscule percent of Americans had any money invested in anything. What were the interest rates banks were paying back then? By the way who cares about what our parents did with their money?


the bigger question is what was inflation back then , that is always the wild card . rates and inflation are joined at the hip and negative real returns are losses no matter what the rate was .

out of the last 31 years , regardless of interest rates 17 years had negative real returns after taxes and inflation . that is more than 50% . many were at zero % real return and those were not counted as negative . this has zero to do with investing in equities .. fixed income and inflation have not played nice together regardless of where rates were , the odds of having a positive return with cd's was worse than a coin toss . so so much for that argument !


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## garyt1957 (Mar 20, 2019)

It's early here and the coffee hasn't worked it's magic yet and I admit I haven't read your whole post, BUT...what if you need the money so you don't reinvest the dividend? Yes , the stock price goes down but you still have the same number of shares. If you sell non dividend payers to spend you now have less shares. Eventually you'll run out of shares, yet the dividend payer, you'll still have your initial shares?


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## mathjak107 (Mar 20, 2019)

garyt1957 said:


> It's early here and the coffee hasn't worked it's magic yet and I admit I haven't read your whole post, BUT...what if you need the money so you don't reinvest the dividend? Yes , the stock price goes down but you still have the same number of shares. If you sell non dividend payers to spend you now have less shares. Eventually you'll run out of shares, yet the dividend payer, you'll still have your initial shares?


Not how it works ....   in theory if you get a 4% dividend and no appreciation in the stock , each dividend pay out would send the stock lower and lower  until it hits zero , so hypothetically you would have all your shares at near zero value ...

so you need at least 4% in appreciation to offset the payout .... pulling 4%from a portfolio of non dividend payers needs the same exact 4% appreciation to stay solvent forever and not run out of shares. Balances would be the same .. the non div payers get no price reduction so over time they are selling less and less shares to generate the same income ...

whether you you have more shares at a lower price or less shares at a higher price they work out the same


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## OneEyedDiva (Mar 23, 2019)

mathjak107 said:


> you are confusing the  fact your stock goes up with the mechanics and actual benefit of the dividend .
> 
> 
> dividends have to lower the share price , it is mandatory....... that does not mean your stock does not go up... you are confusing  issues .  follow carefully here so you can be one of the few who actually get it .
> ...



It's taken me a while to respond because I haven't been on here much with all that's gone on in my life the last couple of months. But I'm not confusing anything Mathjak. The articles you shared are nothing new to me, I "inhale" financial articles and have done so for years. YOU seem to be the one who is confused. It seems you keep talking about dividend shares that are distributed and have no time to grow in value. Yes dividends lower stock prices (in my case mutual funds and ETFs). That only affects the value of the dividends (zero vs an increase) IF THOSE DIVIDENDS ARE DISTRIBUTED.  If they stay in the portfolio and are allowed to grow as share prices increase...then the investor has made a profit off the dividend shares.  For instance, the self tallying spreadsheets I use to track each dividend by purchase share price, amount of shares purchased, total amount paid for the shares, total amount of the dividend, current share price and current net amount of the shares tells me instantly upon viewing how much each set of dividend shares purchased has increased or decreased in value. Since I rarely take distributions, the dividend shares on those spreadsheets have increased in value by thousands of dollars.  I keep another set of spreadsheets that tally the values of the original shares. So I cannot get confused as the numbers are plain as day right in front of my face.


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## mathjak107 (Mar 23, 2019)

OneEyedDiva said:


> It's taken me a while to respond because I haven't been on here much with all that's gone on in my life the last couple of months. But I'm not confusing anything Mathjak. The articles you shared are nothing new to me, I "inhale" financial articles and have done so for years. YOU seem to be the one who is confused. It seems you keep talking about dividend shares that are distributed and have no time to grow in value. Yes dividends lower stock prices (in my case mutual funds and ETFs). That only affects the value of the dividends (zero vs an increase) IF THOSE DIVIDENDS ARE DISTRIBUTED.  If they stay in the portfolio and are allowed to grow as share prices increase...then the investor has made a profit off the dividend shares.  For instance, the self tallying spreadsheets I use to track each dividend by purchase share price, amount of shares purchased, total amount paid for the shares, total amount of the dividend, current share price and current net amount of the shares tells me instantly upon viewing how much each set of dividend shares purchased has increased or decreased in value. Since I rarely take distributions, the dividend shares on those spreadsheets have increased in value by thousands of dollars.  I keep another set of spreadsheets that tally the values of the original shares. So I cannot get confused as the numbers are plain as day right in front of my face.




follow carefully .. the growth is not any different reinvesting the dividends then the growth of a portfolio of non dividends with the same or greater total return .
 reinvesting merely switches the existing value around so it is configured differently but adds no more new dollars . in fact it does the opposite if you do not reinvest and leaves you with less dollars starting out being acted on .

if you have 1000 shares of a 100 dollar stock, that is 100k invested

if it pays a  pays a 10% dividend you will have 90k left invested after the mandatory roll back and 10k in pocket so you have 1000 shares at 90  a share left for markets to act upon or 90k. if you reinvest the 10k back in back in at this reduced price of 90 dollars you will have  1,110 shares at 90.00 dollars .or the same 100k you had .pre dividend ... i t just consists of more shares at a reduced price for markets to act on .

if markets double your stock with the reinvested dividends it is the same 200k  you would have had  if the stock paid no dividend and the original 100k just doubled without you being handed the money and giving it back ..

the paying of a dividend is no different then taking the same draw from a portfolio of non div payers assuming the same or greater total return ..

the effect of putting the money back in again will be the same in both cases .

it is no different than a  fund distribution where you have x-amount in the fund , you reinvest the distribution  and have more shares at a lower price equaling just what you had the day before ...  the distribution is just a return of a piece of the share price to you .

the dividends are not 'magic money' that appears from fairies and is sprinkled on investors - it comes out of the underlying value of the stock price. If paying dividends was the sign of a 'better than average' stock, there would be active mutual funds with managers picking these fairy dust emitting stocks, and routinely outperforming the market on a total return basis


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## OneEyedDiva (Mar 25, 2019)

mathjak107 said:


> follow carefully .. the growth is not any different reinvesting the dividends then the growth of a portfolio of non dividends with the same or greater total return .
> reinvesting merely switches the existing value around so it is configured differently but adds no more new dollars . in fact it does the opposite if you do not reinvest and leaves you with less dollars starting out being acted on .
> 
> if you have 1000 shares of a 100 dollar stock, that is 100k invested
> ...



OMG...I had to make your reply bigger so I could read it!! What happened in your mind to when the funds and ETFs INCREASE IN PRICE. Then NO you don't have the same 90K, you have what your portfolio shares have increased by.  For instance, during this quarter my portfolio has increased by 12% over it was worth at year's end. Some of that is because the price that was reduced by distributions has gone back up (in some instances more than what it was before the distributions) and some due to the distributions themselves. To me it seems you are fixated on the value of investments (share prices) staying the same after distributions have taken place. But you can't dispute the figures that are right in front of my eyes. And FYI I have read several articles in which financial "experts" contend that dividend paying investments can fare better in down markets or at least help to "soften the blow" of the downturns. I'm done with it. I'm getting off this merry-go-round. We're never going to be on the same page about this. "See ya" in some other post.


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## mathjak107 (Mar 26, 2019)

bottom line is there is noooooooooooooooooooo difference between balances between dividend payers and non dividend payers when the total returns are the same---period  ....   GETTING A PIECE OF THE EXISTING SHARE PRICE BACK IN YOUR HAND AND PUTTING IT BACK IN STILL LEAVES YOU THE SAME AS YOU HAD THE NIGHT BEFORE IN BALANCE ... THE MARKET ACTION WILL BE THE SAME WHETHER YOU GOT THE DIVIDEND OR NOT. DIVIDEND PAYOUTS ARE A WASH  WHEN REINVESTED .  your gain comes from the appreciation on the stock  in all instances .....   it is no different then a stock split where you had x-amount of shares , now you have more shares at a lower value being compounded on ... if the stock goes up 10% it is the same thing  .    if a dividend was magic fairy money we would not own the stock ... we would buy it the day before it goes ex div and then sell it... but the fact is like a fund distribution it is nothing gained nothing lost balance wise ..

EVERY STOCK THAT PAYS A DIVIDEND NEEDS TO SEE THE SHARE PRICE APPRECIATE AT LEAST AS MUCH OR YOUR RETURN IS ZERO .. HYPOTHETICALLY A STOCK THAT JUST PAID OUT A DIVIDEND BUT FAILED TO APPRECIATE AT LEAST AS MUCH WOULD LEAVE YOU WITH A WHOLE LOT MORE SHARES AT NEAR ZERO VALUE IF IT WENT ON LONG ENOUGH . 

 IT IS NOT THE DIVIDEND GIVING YOU THE GROWTH , IT IS SHARE PRICE APPRECIATION . the dividend just gives you back a piece of the share price that already exists . you reinvest it back in getting more shares but at a lower price then it was , the dollars invested which is what gets compounded on is equal to  just what you had predividend . ...  1 share at 2.oo dollars is the same as 2 shares at 1.00 .. if either doubles you have 4.00 

https://www.investopedia.com/ask/answers/buy-before-dividend-then-sell/


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