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Bering Hill

 
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  • Retirement's 4% Rule: Surprising Answers You Need to Know About the Inflation Factor [View article]
    If your retirement savings are inside an IRA or 401(k) type product, a commonly overlooked fact is that RMD (required minimum distributions) begin at 3.65% and increase each year. RMD's must begin at age 70 1/2. After 25 years, the RMD withdrawal must be 10.99% of the prior year-end account balance. Compare that to DVK's 4% adjusted by inflation of 3% per year where after 25 years the withdrawal is 8.13%. Factor in taxes and DVK is correct, it is amazing the "speed with which their portfolio plummets".
    Jul 27, 2011. 04:24 PM | 9 Likes Like |Link to Comment
  • 3 Powerful Concepts for Compounding Wealth With Dividend Stocks [View article]
    I am a regular SA reader although I have never commented. However, the information in this article and the followup comments are incredibly important for d-g investors.

    What puzzles me are comments by those waiting for pullbacks to get higher yields. A pullback allows you to buy a few extra shares but, as sneaker1404 points out, you lose interim dividends and capital appreciation. D4L says, "the price of the stock must be going up at about the same rate" so, in theory, unless there is a change in the company fundamentals or operations, SpanglerDavis is correct - a pullback would be a broad based market adjustment.

    Further, what defines a "pullback"? For example, T closed at 31.26 today and goes x-div on July 6. At $0.43/share dividend, the pullback price would have to drop below $30.83.

    So if you factor in the compounding dividends, giving up one or more interim dividend payments in favor of a pullback will cost you much more long term in lost compounding than will be gained trying to buy a couple more shares.
    Jun 29, 2011. 10:02 PM | 8 Likes Like |Link to Comment
  • Retirement's 4% Rule: Surprising Answers You Need to Know About the Inflation Factor [View article]
    rd -
    Determining when to begin withdrawals is not easily determined because there are so many moving parts which need answers to the following questions from you and/or your spouse if married: are you working, are you taking social security benefits, are you collecting pension benefits, how much is in your IRA/qualified plan, do you need the additional income.

    The question most likely to cause you the most problem is whether you are collecting social security. If your provisional income is between the threshold amounts of $25,000 and $34,000 (for singles, HOH, and widow(er)) or between $32,000 and $44,000 for couples, then social security benefits will be taxed. Your provisional income generally is your adjusted gross income (not including taxable social security), plus tax-exempt interest, plus one-half of your social security benefits.

    When your provisional income is below the lower amount, no social security is taxable. When provisional income is between the threshold amounts, 50% of your social security income is taxable. Another way of saying this is that for every $1,000 your non-social security income goes up, your taxable income goes up $1,500.
    When your provisional income is over the upper threshold, 85% of your social security benefits are taxable. Another way of saying this is that for every $1,000 your non-social security income goes up, your taxable income goes up $1,850. Once you have been taxed on a full 85% of your social security, then income from other sources is simply additional taxable income. The more you receive in social security benefits, the wider this “window of pain” becomes.

    I highly recommend David Fish’s methodology both as an accelerated way to withdraw funds prior to RMD and as a way to supplement your income while delaying social security benefits until age 70 (assuming health and longevity is in your favor). If you expect to live until well past 80, delaying social security until 70 is a very smart move. If your life expectancy is in the range of 78 to 82, it really doesn’t matter when you start social security (between 62 and 70) since your lifetime benefit will be within a range of a few thousand dollars. If you won’t make 78, start at 62.
    Jul 28, 2011. 12:51 PM | 6 Likes Like |Link to Comment
  • Retirement's 4% Rule: Surprising Answers You Need to Know About the Inflation Factor [View article]
    JustSayin - that is the right approach - sell the stock, take the cash out of the IRA, buy the stock again (after sharing some with IRS).

    Rhianna32 - just to be clear, 11% at 70 is not what I said. At 70 the beginning RMD is 3.65% and it increases to 10.99% over the next 25 years.
    Jul 27, 2011. 06:34 PM | 6 Likes Like |Link to Comment
  • Dividend Investing And Black Jack: How Strategic Money Management Can Make You A Winner [View article]
    Rock, My opinion only - but I don't sell a stock just because I have a nice capital gain. If the dividend and the price (along with the underlying fundamentals, of course) are appropriately balanced and there is no indication of a forthcoming problem, I leave it alone. If there is an "out of balance" condition such as rapidly increasing price leaving the dividend in the dust (in other words, yield much lower than "normal") I take a close look at whether profit taking is appropriate. Consider tax consequences if not in a qualified account.
    Nov 19, 2011. 08:01 PM | 4 Likes Like |Link to Comment
  • Is Yield On Cost Really Important To Dividend Investors? [View article]
    David, Great article. This single sentence you wrote is an excellent summarization of the issue:

    "Again, since dividends are paid on shares owned, not the value of the position owned, focusing on the yield in and of itself may prevent an investor from making better decisions for his income stream."

    Keep these great articles coming.
    Nov 28, 2011. 11:38 AM | 3 Likes Like |Link to Comment
  • 4 Reasons Adamis Pharmaceuticals Could Be A Multi-Bagger [View article]
    Joe,
    Very nice article. I am amazed at how much work you must have invested in this article. I have been an owner for a couple of years - waiting patiently. It is interesting to note, and you've likely noticed this as well, that when there is some press like your article, the stock price surges for a day or so. Then the profit taking runs the price back down for a month or so. When Adamis finally gets some revenue, hopefully later this year, then the price will get past these resistance levels and pay the patient holders handsomely. Thanks again for your massive contribution.
    May 16, 2014. 09:23 PM | 2 Likes Like |Link to Comment
  • Don't Let Yield On Cost Lull You Into Complacency: VF As Case In Point [View article]
    Thanks to both Robert & DVK for your input.
    Larry
    Nov 29, 2011. 08:31 PM | 2 Likes Like |Link to Comment
  • Dividend Investing And Black Jack: How Strategic Money Management Can Make You A Winner [View article]
    Thanks “Liberal Arts” Dave, you can see my blog on my profile page. It is a complicated subject. Most people don’t know there is a 55.5% marginal tax bracket thanks to the tax on Social Security benefits. I welcome your feedback.

    You left several comments on my article this morning, but I will reply here since your article has a much better thread of comments than mine.

    Assume you replaced your KO with INTC when INTC had precisely the same yield as KO. Your annual dividend payments would be the same. You are correct that you would have purchased more shares of INTC. In your example, 3.35 shares of INTC for every share of KO. But if today’s yields were precisely the same, you could divide the KO dividend by 3.35 and get the INTC dividend. The quarterly dividend payments you receive will not change a nickel.

    Your reply above is so important. Rising prices cause yield’s to drop. The rising price gives you wealth but doesn’t give you income. If you are able to move the wealth from an overvalued stock (net of tax, if applicable) into a fundamentally sound stock that improves your cash flow, then you have accomplished two things: 1) avoided a plummet when the market realizes overvalue; and 2) put your wealth to work at a higher yield thereby improving cash flow.
    Nov 19, 2011. 01:42 PM | 2 Likes Like |Link to Comment
  • Don't Let Yield On Cost Lull You Into Complacency: VF As Case In Point [View article]
    Thanks Rodger. Your recent article on volatility actually got me off the dime to try my first article.
    Nov 7, 2011. 09:03 AM | 2 Likes Like |Link to Comment
  • Adamis Pharmaceuticals: Two Companies For The Price Of One [View article]
    Except for one recent investor who unloaded a bundle of shares, the price fluctuations appear to be only "noise" created by day traders - average volume is generally very low. Those who understand what this company is about are in long. Thank you for a great article and for your thorough follow-up. Long ADMP.
    Dec 4, 2013. 09:42 AM | 1 Like Like |Link to Comment
  • Don't Let Yield On Cost Lull You Into Complacency: VF As Case In Point [View article]
    SDS, Thanks for your support. I hope to provide more articles at some point. With tax season approaching, I will be a bit busy for a few months. The last article I wrote was rejected as not having "actionable" investment ideas so I put it on my instablog which can be accessed via my profile. You might find it an interesting read.

    The "return" would be different than "yield", but I am definitely looking back to my original investment to show how it performed.
    Larry
    Nov 29, 2011. 08:57 AM | 1 Like Like |Link to Comment
  • Dividend Investing And Black Jack: How Strategic Money Management Can Make You A Winner [View article]
    You are more than welcome to use it. I look forward to your "hornet's nest".
    Nov 19, 2011. 03:40 PM | 1 Like Like |Link to Comment
  • Dividend Investing And Black Jack: How Strategic Money Management Can Make You A Winner [View article]
    Probably too late now. Once placed in the blog, I understand it can't be submitted as a premium article. Thanks for the tip.
    Nov 18, 2011. 04:05 PM | 1 Like Like |Link to Comment
  • Dividend Investing And Black Jack: How Strategic Money Management Can Make You A Winner [View article]
    Robert, The current yield makes all the difference, not YOC. See the article I wrote a couple of weeks ago. In it, I show VFC YOC at 4.43% but the current yield is only 2.17% because the price has increased so much. I showed that selling it and reinvesting in WMT at 2.61% yield would return higher quarterly payments. WMT's new YOC is 2.61%, clearly lower than the 4.43% for VFC. The decision to switch depends on the future appreciation potential of the target stock. If the relinquished stock is overvalue, holding it because of the YOC wouldn't be the correct investment decision.
    Nov 18, 2011. 03:45 PM | 1 Like Like |Link to Comment
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