Debunking the Myths of Dividend Investing

While I like the concept of “mailbox money” and passive income from dividend-producing stocks, I don’t like being forced to accept cash back when I don’t need it and the tax consequences that go along with those dividends.

Debunking the Myths of Dividend Investing

I grew up reading a number of different financial books on investing, fundamental analysis and more. There has to be a better way for high incomers like me to invest solely on their own without paying large fees for managers to build a portfolio on their own.

Background with investing

Myths of Dividend Investing

Let’s get down to the myths regarding dividend investing. Here are the most important myths that are simply not true.

Myth 1: You Can Never Beat the Stock Market

Beating the stock market over the extreme long-term is difficult, but it is not out of the question. However, what if you didn’t have to beat the market for 20 years? You only need to beat it for a 10-year cycle.

Myth 2: Index Investing is Completely Worry Free

Allocation of capital. By choosing an approach of building your own portfolio, you can allocate your capital to industries that have sounds businesses but are just not valued properly.

Myth 3: Dividends Are Completely Tax Inefficient!

Yes, that might be true for those on this site. However, what about when you retire? Your retirement income becomes your dividend income. Your future effective tax rate is now substantially lower than your current tax rate.

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