Retirement In A World Without Social Security: Follow Up [View article]
"SS has basically no impact on the profits of the companies you mention, since even if they made all their money in the U.S., SS money is not new money but is simply confiscated from other people who then then are unable to spend it."
Many countries have a SS system. When most of the money in concentrated is the hands of few it is not being spent on goods and services which would affect the velocity in the money supply and would have drastic impact on the companies I mentioned.
For example if I have $10 and need toothpaste which cost $1 I buy it and hold onto the other $9 since my needs are met and I do not need to spend the other $9. If 9 other people need toothpaste but have no money they cannot buy it. If they each had $1 of my $9 dollars they could all buy the toothpaste they need. This creates velocity in the money supply and creates jobs since people are needed to make toothpaste.
The dramatic fiction is actually from my own life experience with family members. It happens more than you think.
Retirement In A World Without Social Security: Follow Up [View article]
AgAuMoney,
I'm not sure how to address your question so I am going to make a few assumptions. Assume you are married and you and your wife both have elderly parents who depend on SS and medicare for their survival. Take away SS and they are now living with you because they have no where else to go. Their self esteem is shot because they are totally dependent on you and your wife for their survival. You and your wife and children are fighting because of the financial pressure and no privacy.
At least you have your dividend stocks,PG,CL,GIS,JNJ,etc. Wait a minute because of the redistribution of wealth into fewer hands all of the aforementioned companies are not selling as much product and reduce or eliminate the dividend. SS payments adds velocity to the money supply since the vast majority are going to spend it as they are fairly certain a check is going to come each month. The working stiff is more likely to try and hoard the money because they are not even sure they will have a job the following month.
Its not a perfect system but it seems to work. Look at all the the people who make comments on SA telling their story about investing money over the long haul in the aforementioned companies and are now wealthy.
Retirement In A World Without Social Security: Follow Up [View article]
How come nobody is talking about the veterans or other young individuals who become disabled or die prematurely. Social Security covers the family. I realize everyone will say they should have life insurance or disability insurance but many do not and probably would not get it even if there was no SS.
Even the people who will respond they do have life insurance and disability insurance need to take a look at their policy. Is the life insurance really enough to cover your family? As far as disability insurance most of the plans I have seen require the disabled individual to apply for SSD and will even pay for the advocate because they have a dollar for dollar offset. Who knows what the insurance premium would be if SS were taken out of the picture.
Dividend Growth Investing And The Importance Of Diversification [View article]
Richjoy
"It also seems you are unwilling to respond to my rebuttal of your premise regarding ETFs."
I stated "If 3 of a dividend investors 10 best stock ideas eliminate the dividend I would suggest they would be better off buying a dividend ETF and forget about doing their own DD on individual stocks."
I consider that to be such poor stock selection I cannot believe you are defending it and expect some type of rebuttal. Apparently in your world that is considered good stock selection.
Now please answer my question. Did you really have no idea a few years ago that PFE was more likely to cut its dividend than JNJ?
Please don't respond if all you can come back with is sarcasm.
Dividend Growth Investing And The Importance Of Diversification [View article]
Richjoy,
The point of the article was about dividend safety. The author listed 30 stocks which he felt would be safer in terms of not having a catastrophic loss in income than just having the first 10 he listed. By not putting NUE is his first 10 selections I felt he gave more thought to the first 10 stocks than the last 20 stocks he picked for dividend safety. It is much easier to do more complete DD the less stocks you follow. I guess thats why wall street firms have analysts that specialize in healthcare,energy,etc.
In my statement I tried to stay within the confines of the article.
Going back to your statement "In the real world, despite our best efforts it is not possible to know that KMB is more likely to cut the dividend than JNJ" Did you really have no idea a few years ago that PFE was more likely to cut its dividend than JNJ? Really!
Dividend Growth Investing And The Importance Of Diversification [View article]
Richjoy,
"In the real world, despite our best efforts, it is not possible to know that KMB is more likely to cut the dividend than is JNJ, or CLX is more likely to cut than is KO."
So in your "real world" it is not possible to know that NUE is more likely to cut its dividend than KO.
Dividend Growth Investing And The Importance Of Diversification [View article]
Dan Mac,
Thanks for the article.
In your example you have an individual investor selecting his/her 10 best stock ideas and 3 of them eliminating the dividend whereas the next 20 stocks purchased do not eliminate the dividend. Since the last 20 stocks purchased should be of lower quality and have a greater chance of eliminating the dividend than the first 10 your example is not realistic.
It would be more realistic to assume that the 3 stocks eliminating the dividend would be from stocks 11-30 in the portfolio since they would be of lower quality than the first 10 chosen. This would make the 30 stock portfolio riskier than the 10 stock portfolio since the investor is increasing the number of stocks just to feel safer.
In your example if 3 of a dividend investors 10 best stock ideas eliminate the dividend I would suggest they would be better off buying a dividend ETF and forget about doing their own DD on individual stocks.
What Stocks Are Most Commonly Held By Dividend Growth Investors? [View article]
I own GIS which is not on your list.
I also own PFE which I purchased on 7/26/10 at 14.75. I felt the reason they cut the dividend was a special situation and the company was finally getting back on track.
The Special Dilemma For Altria Stockholders [View article]
Richjoy,
The reason I brought up individuals rolling their own cigarettes was from a conversation I had with my neighbor who is a chronic smoker. I don't remember ever having a conversation with him that he was not smoking. He told me the price of cigarettes had become so prohibitive that he and his wife started rolling their own cigarettes.
My point is people who are chronic smokers would be more likely to make the switch to rolling their own cigarettes(which I am not sure are captured in your statistics) because of the cost in a high tax state than individuals who only smoke a few cigarettes per day.
Are individuals rolling their own cigarettes included in your statistics?
The Special Dilemma For Altria Stockholders [View article]
Richjoy,
"The fact is about a THIRD FEWER Americans smoke today, about 21 percent than in the late 1970s (34 percent) "
What is the difference in the actual number of smokers? For example if you have 200 people 34 percent comes to 68. If you have 330 people 21 percent is 69. Accounting for population growth the actual number of smokers may not be much different from the 70s.
In addition high tax areas such as NYC may have appeared to reduce smokers through taxation but I suspect they may have simply increased the amount of cigarettes purchased in VA and then driven to NYC for illegal resale.
With higher taxes in NYC more individuals may be rolling their own cigarettes which I am not sure would be accounted for in the statistics.
Are the states that are worried about bond default low tax or high tax states?
Start Investing Now For Retirement Wealth [View article]
DIY DG Investor,
Thank you for your excellent article.
You stated "A person who bought $10,000 of Altria (MO) back in 1980 would now have accumulated a hefty 1.1 million, for an annualized return of 15.2%."
Does the 15.2% return include the Kraft and PM spinoffs? I realize the answer does not affect the point of your article but I am curious as a holder of both PM and MO.
Time To Double Your Dividend Income: A Reference For Dividend Reinvestors [View article]
FinancialStorm,
Thank you for this excellent article.
"if the goal is purely an increase in dividend income,increasing share prices are a menace as they reduce the number of shares purchased upon dividend reinvestment."
When I tell people I do not want my shares to go up precisely for this reason they look at me like I've lost my mind. I thinks its so ingrained that individuals want their stocks to go up they cannot see the forest for the trees.
It is the reason I own stocks such as KO,GIS,PG,XOM,JNJ,MO,PM etc. With these type of stocks there is a reasonable probability I will be able to hold them for life and receive an ever increasing yearly dividend which can be spent or reinvested in whichever stock seems the best value.
Can You Retire With A $1,000,000 Portfolio? An Urgent Follow Up [View article]
heglimp,
Your example is partially correct. In this case the minimum the wife would receive per year is $24000. If the WE(wage earner) took his benefits at age 62 the spouse would actually receive a benefit higher than $24000 per year. For a widow at FRA(full retirement age) she would receive either the WE's monthly benefit rate or 82.5 percent of his death PIA(primary insurance amount) whichever is higher. In this case 82.5 percent of the death PIA is higher so her benefit rate would be greater than $2000 per month.
These computations can get complicated so your best bet is to contact a SS office and ask to talk to a t2 claims rep.
Retirement In A World Without Social Security: Follow Up [View article]
"you know some of us are supporting perhaps children or parents to some degree."
That is exactly my point. Can you imagine how much more this would happen without SS and how much more they would need?
Prior to SS I think there were more extended families living together out of necessity rather than a great love of living together.
Retirement In A World Without Social Security: Follow Up [View article]
Many countries have a SS system. When most of the money in concentrated is the hands of few it is not being spent on goods and services which would affect the velocity in the money supply and would have drastic impact on the companies I mentioned.
For example if I have $10 and need toothpaste which cost $1 I buy it and hold onto the other $9 since my needs are met and I do not need to spend the other $9. If 9 other people need toothpaste but have no money they cannot buy it. If they each had $1 of my $9 dollars they could all buy the toothpaste they need. This creates velocity in the money supply and creates jobs since people are needed to make toothpaste.
The dramatic fiction is actually from my own life experience with family members. It happens more than you think.
Retirement In A World Without Social Security: Follow Up [View article]
I'm not sure how to address your question so I am going to make a few assumptions. Assume you are married and you and your wife both have elderly parents who depend on SS and medicare for their survival. Take away SS and they are now living with you because they have no where else to go. Their self esteem is shot because they are totally dependent on you and your wife for their survival. You and your wife and children are fighting because of the financial pressure and no privacy.
At least you have your dividend stocks,PG,CL,GIS,JNJ,etc. Wait a minute because of the redistribution of wealth into fewer hands all of the aforementioned companies are not selling as much product and reduce or eliminate the dividend. SS payments adds velocity to the money supply since the vast majority are going to spend it as they are fairly certain a check is going to come each month. The working stiff is more likely to try and hoard the money because they are not even sure they will have a job the following month.
Its not a perfect system but it seems to work. Look at all the the people who make comments on SA telling their story about investing money over the long haul in the aforementioned companies and are now wealthy.
Retirement In A World Without Social Security: Follow Up [View article]
Even the people who will respond they do have life insurance and disability insurance need to take a look at their policy. Is the life insurance really enough to cover your family? As far as disability insurance most of the plans I have seen require the disabled individual to apply for SSD and will even pay for the advocate because they have a dollar for dollar offset. Who knows what the insurance premium would be if SS were taken out of the picture.
Why A Stock Market Bubble Is Forming Right Now [View article]
Thank you for your article.
Why not just change the title of the article to " US equity valuations are currently not symptomatic of a stock market bubble"
Dividend Growth Investing And The Importance Of Diversification [View article]
"It also seems you are unwilling to respond to my rebuttal of your premise regarding ETFs."
I stated "If 3 of a dividend investors 10 best stock ideas eliminate the dividend I would suggest they would be better off buying a dividend ETF and forget about doing their own DD on individual stocks."
I consider that to be such poor stock selection I cannot believe you are defending it and expect some type of rebuttal. Apparently in your world that is considered good stock selection.
Now please answer my question. Did you really have no idea a few years ago that PFE was more likely to cut its dividend than JNJ?
Please don't respond if all you can come back with is sarcasm.
Dividend Growth Investing And The Importance Of Diversification [View article]
The point of the article was about dividend safety. The author listed 30 stocks which he felt would be safer in terms of not having a catastrophic loss in income than just having the first 10 he listed. By not putting NUE is his first 10 selections I felt he gave more thought to the first 10 stocks than the last 20 stocks he picked for dividend safety. It is much easier to do more complete DD the less stocks you follow. I guess thats why wall street firms have analysts that specialize in healthcare,energy,etc.
In my statement I tried to stay within the confines of the article.
Going back to your statement "In the real world, despite our best efforts it is not possible to know that KMB is more likely to cut the dividend than JNJ" Did you really have no idea a few years ago that PFE was more likely to cut its dividend than JNJ? Really!
Dividend Growth Investing And The Importance Of Diversification [View article]
"In the real world, despite our best efforts, it is not possible to know that KMB is more likely to cut the dividend than is JNJ, or CLX is more likely to cut than is KO."
So in your "real world" it is not possible to know that NUE is more likely to cut its dividend than KO.
KO and NUE are both listed in the 30 stocks.
Dividend Growth Investing And The Importance Of Diversification [View article]
Thanks for the article.
In your example you have an individual investor selecting his/her 10 best stock ideas and 3 of them eliminating the dividend whereas the next 20 stocks purchased do not eliminate the dividend. Since the last 20 stocks purchased should be of lower quality and have a greater chance of eliminating the dividend than the first 10 your example is not realistic.
It would be more realistic to assume that the 3 stocks eliminating the dividend would be from stocks 11-30 in the portfolio since they would be of lower quality than the first 10 chosen. This would make the 30 stock portfolio riskier than the 10 stock portfolio since the investor is increasing the number of stocks just to feel safer.
In your example if 3 of a dividend investors 10 best stock ideas eliminate the dividend I would suggest they would be better off buying a dividend ETF and forget about doing their own DD on individual stocks.
What Stocks Are Most Commonly Held By Dividend Growth Investors? [View article]
I also own PFE which I purchased on 7/26/10 at 14.75. I felt the reason they cut the dividend was a special situation and the company was finally getting back on track.
The Special Dilemma For Altria Stockholders [View article]
The reason I brought up individuals rolling their own cigarettes was from a conversation I had with my neighbor who is a chronic smoker. I don't remember ever having a conversation with him that he was not smoking. He told me the price of cigarettes had become so prohibitive that he and his wife started rolling their own cigarettes.
My point is people who are chronic smokers would be more likely to make the switch to rolling their own cigarettes(which I am not sure are captured in your statistics) because of the cost in a high tax state than individuals who only smoke a few cigarettes per day.
Are individuals rolling their own cigarettes included in your statistics?
The Special Dilemma For Altria Stockholders [View article]
"The fact is about a THIRD FEWER Americans smoke today, about 21 percent than in the late 1970s (34 percent) "
What is the difference in the actual number of smokers? For example if you have 200 people 34 percent comes to 68. If you have 330 people 21 percent is 69. Accounting for population growth the actual number of smokers may not be much different from the 70s.
In addition high tax areas such as NYC may have appeared to reduce smokers through taxation but I suspect they may have simply increased the amount of cigarettes purchased in VA and then driven to NYC for illegal resale.
With higher taxes in NYC more individuals may be rolling their own cigarettes which I am not sure would be accounted for in the statistics.
Are the states that are worried about bond default low tax or high tax states?
Start Investing Now For Retirement Wealth [View article]
Thank you for your excellent article.
You stated "A person who bought $10,000 of Altria (MO) back in 1980 would now have accumulated a hefty 1.1 million, for an annualized return of 15.2%."
Does the 15.2% return include the Kraft and PM spinoffs? I realize the answer does not affect the point of your article but I am curious as a holder of both PM and MO.
Thanks in advance for your response.
x
Time To Double Your Dividend Income: A Reference For Dividend Reinvestors [View article]
Thank you for this excellent article.
"if the goal is purely an increase in dividend income,increasing share prices are a menace as they reduce the number of shares purchased upon dividend reinvestment."
When I tell people I do not want my shares to go up precisely for this reason they look at me like I've lost my mind. I thinks its so ingrained that individuals want their stocks to go up they cannot see the forest for the trees.
It is the reason I own stocks such as KO,GIS,PG,XOM,JNJ,MO,PM etc. With these type of stocks there is a reasonable probability I will be able to hold them for life and receive an ever increasing yearly dividend which can be spent or reinvested in whichever stock seems the best value.
Can You Retire With A $1,000,000 Portfolio? An Urgent Follow Up [View article]
Your example is partially correct. In this case the minimum the wife would receive per year is $24000. If the WE(wage earner) took his benefits at age 62 the spouse would actually receive a benefit higher than $24000 per year. For a widow at FRA(full retirement age) she would receive either the WE's monthly benefit rate or 82.5 percent of his death PIA(primary insurance amount) whichever is higher. In this case 82.5 percent of the death PIA is higher so her benefit rate would be greater than $2000 per month.
These computations can get complicated so your best bet is to contact a SS office and ask to talk to a t2 claims rep.
x