Don’t miss out on record dividend payouts

Co-authored by Treading Softly

“The fields are white for harvest.”

If the seeds grow and reach the point where they should be collected, the heads of the grains will be white. What this tells us is that now is the time Take the necessary measures and this delay is no longer advisable.

When it comes to the market, I like to use agricultural examples to bring us back to concrete reality. It’s easy to get lost in the numbers, the assumptions, staring at the charts, and trying to guess momentum. It might be a good idea to go back and have a touchstone, a place where you can get a tangible reminder that you are dealing with reality and not just assumptions. Many psychologists will recommend that if you are in the midst of a high level of anxiety or even approaching the edge of a panic attack, that you should use grounding techniques. these These are techniques that use all your senses to bring you back to the present reality, to ground you in that moment instead of letting your mind run wild with thoughts. This could be something as simple as staring directly at the ground and describing out loud the sights, sounds, sensations, colors, and feel of tangible things around you at that moment.

Fields are white for harvest to collect income in your wallet. In fact, they have been waiting for you to start harvesting for a while. You are missing out if you are not accumulating income.

Let’s dig deeper.

Standard dividends are paid

The market is a torrential river of capital, flowing from one side of the economy to the other. It has many tributaries that branch out towards various expenses such as interest, employee wages, and capital expenditures. One of the main tributaries of the river is the dividends paid to shareholders. More than 80% of public companies pay some level of dividend. Of these, the vast majority raised their dividends or kept them flat in 2023 compared to those that reduced them.

In 2023, a record dividend of $1.66 trillion was paid, according to Janus Henderson, and this is expected to rise to $1.72 trillion in 2024.

It is an indisputable fact that dividends amounting to trillions of dollars are paid to shareholders annually. We can see from the chart above that although there was a decline in 2020 when the economy was full of uncertainty, and companies decided to hold more capital in preparation, dividends were still a massive source of capital flowing through the market.

In February, Meta (META) began its first-ever dividend and will send $5.3 billion to the markets in 2024. Likewise, Alphabet (GOOG) (GOOGL) will send $10 billion to the markets annually with the recent start of its dividend. The start of dividends from tech giants underscores the importance of this form of capital return on Wall Street. Earlier this year, Costco (COST) introduced a special dividend of $15 per share, sending $6.7 billion into the markets, its largest special dividend ever. Retail giant Walmart (WMT) posted a 9% year-over-year increase in its profits, marking the largest increase in more than a decade. The big-box retailer will spend more than $7.1 billion on dividends for fiscal year 2024. In the high-yield camp, the segment our investment group focuses on, we saw notable dividend increases from Western Midstream (WES) and British American Tobacco (BTI). WES achieved a massive 52% increase in payouts and will spend $865 million on common stock distributions in FY2024, and BTI will spend £5.2 billion on its annual dividend (up 2% year-on-year).

These numbers become even more astronomical when you consider the multi-billion dollar stock buybacks that companies seek. But this also tells us that if you’re waiting for a better time to collect dividends, you’re really not waiting for anything because the dividends being paid represent a huge potential source of income for yourself. It is also available now without having to wait or delay.

When I developed my income method, my goal was that my investment portfolio and everything in it would pay me a livable return, something I could use to pay my daily expenses as well as reinvest. I want to use my army of dollar bills, put them on the market, and continue to reap the rewards of earning my dollars. We can see that the history of dividends in the market extends inexorably from one cover to the next. While the emphasis that many investors place on dividends has diminished over time, the reality is that there has been a constant stream of income flowing out of the market and into shareholders’ pockets. If you are not receiving a strong flow of profits from the market, it is either through personal choice or lack of knowledge.

Not because of a mistake.

Bad timing excuse

President Abraham Lincoln was often accused of being too slow in making decisions. Because he was a president in the midst of America’s civil war, people expected and wanted a decisive leader—someone who could make decisions effectively, stand by those decisions, and accept the results. This often led people to believe that a decisive person would be quick to act. The problem that many had was that Abraham Lincoln did not meet these expectations. He was known to sit for hours at a time and let everyone have their say. He was also known to spend hours with people he considered unimportant, sharing stories from his life or using examples from stories he heard from others to explain a point or point of view. Abraham Lincoln stuck to his decisions, rarely changed his mind, and took responsibility for the outcome, but he was not quick to act. He felt that if there were massive changes in the nation, these changes should be attended to slowly and deliberately. He was not one to make a rash move.

Investors often tell me that this is not a good time to buy stocks. They are either too expensive and doomed to fail, or they are cheap and could get cheaper, or there is a risk of a dividend cut or any number of excuses that say this is not a good time to invest. As humans, we tend to make excuses and convince ourselves that it’s not the right time to do something, often as a way to avoid doing it altogether.

Why not invest in dividend stocks? “It’s not the right time for me. I’ve been told this is something I should do when I grow up.”

There was an article written in 2015 that talked about the worst possible market timing ever, investing at the top of the market for 42 years. Interestingly, an investor who invested during that period still saw his investment return a strong return: source

“Bob made his first investment at the beginning of 1973, just before the S&P 500 collapsed 48%. Bob then held on to stocks after the decline, saving a total of $46,000, and did not gain the courage to commit to more savings until September.” 1987 – right before 34% Crashes. Bob then continued to hold on strong, making only two additional investments before retirement, which came right before the 2000 crash and then the 2007 crash!

So, how has Bob fared after 42 years of epic market misfortune? In fact, he made money. As the market hit successive record highs, Bob turned the $184,000 he had invested over the years ($6,000 in 1973, $46,000 in 1987, $68,000 in 2000, and $64,000 in 2007) into $1.16 million. Dollars – with a total profit of $980,000. This represents an annual return of about 9%%, on a financially weighted basis. Even after accounting for inflation, Bob increased his wealth significantly by continuing to invest in stocks.

The key here is that Bob, the terrible market timer, was never sold. He kept his stocks and continued to invest more over time, even though he invested at the worst possible times. He still walks away with a solid return on his portfolio. Timing is no excuse to avoid investing.

Plant your crops, and gather your harvest

Many of us have a large store of capital ready to use. It could be cash that we store or perhaps capital that we have invested in the market, but not in the most efficient way for our needs. I highly recommend that you look at your investment portfolio, take its value, and see what your income is from it. If you can get a return of 8% to 10% on the same amount of invested capital, see how dramatically your income can rise in a short time. I recommend that you delve deeper into instant income investing. Look through the history of our articles To delve deeper into understanding how you can unlock more potential from your investment portfolio. Yes, there are risks. There are always risks. But like Bob, if you can tolerate the ups and downs, you will still see a positive result more than once. I cannot promise a positive outcome for everyone because what you choose to do with your wallet is your choice. If you choose to sell something I wouldn’t sell, you may see a different result than mine.

When it comes to your retirement, I want you to have the best possible retirement available to you – one that features financial security, financial freedom, personal happiness, and joy. Your retirement will be as unique as your hobbies, loved ones, and living situation. What does not need to be is marred by financial strife and financial problems. the novel I am Karenina He begins with the phrase, “Happy families are all alike; every unhappy family is unhappy in its own way.” Ironically, the opposite is true for those who have a difficult retirement. The reasons for financial failure in retirement are usually similar in different situations, and what people find a happy retirement for them is unique. My goal and hope for your retirement is that you have the best you can possibly have that is as unique as you are.

That’s the beauty of my income method. That’s the beauty of income investing.