Episode #18: Defining Dividend-Paying Stocks

Today’s Prep:

We hear about dividend-paying stocks, but what are they? Find out as we take your email questions. We’ll also hear from a couple with a significant age gap between spouses.

 

 

Equipping Points:

00:47 –  Why Not Invest In Dividend-Paying Stocks?

  • While, it sounds simple, dividends aren’t guaranteed. Therefore, if you’re living off of dividends, your income isn’t guaranteed either. After all, dividends are a form of income that a business is generating, and businesses are always going to have ebbs and flows. While certain companies are consistent, you simply cannot count on them to meet your income needs in retirement.

1:45 – A Case Study on Dividend-Paying Stocks. 

  • Everyone thought General Electric (GE) was a blue-chip company, meaning folks counted on them for income. Unfortunately, GE’s stock tanked, and it recently got booted from the Dow Jones Industrial Average. GE was the only company remaining from the inception of the Dow. That just goes to show, any one company can fail.

3:02 – A Lesson From 2008.

  • In 2008, we learned that no one is too big to fail. That’s why it’s important to diversify your portfolio and make use of other strategies when it comes to income planning.

4:44 – Couples Planning.  

  • Victoria is getting married. She’s in her late forties and her fiancé is almost 60. This presents a unique problem when it comes to financial planning. After all, Victoria’s spouse is going to retire years before she will.

Today’s Takeaway:

“Dividends aren’t guaranteed, and you shouldn’t rely on them as a sole source of income in retirement. Work with your advisor to generate an income plan. – Retirement Ready

More From Eric:

The host: Eric Peterson - Contact - Call: (515) 226-1500

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