Ep 50. Dividend Investing with Nick McCullum

On this episode, my guest is Nick McCullum of SureDividend.com. We talk about dividend investing as a strategy. Everyone likes the idea of passive income and dividends are about as passive as it gets. Money comes in monthly, quarterly, or whatever frequency the company pays it out. Sure there are risks, but over the long term, dividend paying stocks have had lower volatility than the overall stock market. In this episode we go over the basic terminology (yield, growth rate, DRIPs, etc.) and pros and cons, and how you can use this strategy. I am not trying to convince you to use this strategy but it is a valid one, if you are looking for income especially in your retirement years. We have all heard stories about retirees who live off their dividend checks because they bought the stocks many years ago and reinvested them. The key with this type of strategy as with others is to try to do it as early in your investment life as possible and continue to contribute throughout. The power of compounding is amazing, but the numbers are minor in the first decade, solid in the second decade, and downright impressive in the third decade. By the fourth decade, they become ridiculous. Let me give you an example of this in action. If you invested 10k in Pepsi (A solid non tech American company) in Jun 2005 and held till Jun 2015 without any additional investment you would have had around $22.5 k (not accounting for taxes). With a monthly $100 additional contribution, your total would be around $42.4 (nearly double). If you would have put in the same 10k ,10 yrs before in Jun 1995, your total would be $68.3k (Nice, but not jaw dropping). With the additional monthly $100, it would have been $131K. Now instead of 1995, you put it in 1985, this is where it becomes amazing, your total would be over $700k, with the monthly $100, it would have been nearly $1.1M. And if you had the ability to buy in 1975, your 10k would be $2.6M, with the $100/mo additional it would be over $5M by Jun 2015.   I used 2015 as an end point because it is in the approximate middle of this bull market and the ten year period prior included 3 years before the 2008 financial crisis rather than at the beginning when asset prices were low (ie if you used current trailing 10 yr returns). But the reality is over long terms, these trends appear to hold with some variance I am NOT a financial advisor and neither Nick or I are telling you to use this strategy for your investments. If you are interested in learning more there are many good resources including Nicks newsletter. If you do pursue this strategy, make sure you do so in a tax efficient manner. I do this by placing my highest dividend paying holdings in my tax deferred accounts (401k, IRA, roth IRA, etc) so they can grow unimpeded. This is the website to see stock performance with dividend reinvestments.  https://dqydj.com/stock-return-calculator/ You can find out more about Sure Dividend at their website. SureDividend.com Twitter @SureDividend Seeking Alpha (Sure Dividend) More episodes of this podcast are available at www.doctormoneymatters.com and Apple Podcasts, Google Play, Stitcher, etc. All episodes are also now on YouTube (Audio only) and Facebook. You can follow me on: twitter @drmoneymatters Instagram @doctormoneymatters Facebook @doctormoneymatters Please consider joining the Doctor Money Matters Facebook group. Please share this podcast with your colleagues and join our email list. Thanks for listening and please leave us positive reviews and continue to share this podcast with your colleagues.

Om Podcasten

Welcome to the Doctor Money Matters podcast. I am your host Dr. Tarang Patel, a practicing diagnostic radiologist in Phoenix, AZ. I started this podcast as a way to share knowledge about financial matters as they relate to health care professionals. We spent many years learning about the science and art of providing patient care but most of us have relatively little knowledge about reaching financial well being. I know that I had no formal training in setting up investment accounts, negotiating contracts, buying insurance, buying real estate, etc. I just learned by reading and also by making many mistakes. Health care professionals are trusted to take put their patients needs first and we in turn assume everyone in other fields work the same way. Unfortunately this is not always true. By talking about these topics, I hope we can reduce the many financial mistakes that prior generations of doctors have made. Those physicians were able to overcome these mistakes because of shorter training periods, less debt, and they were more likely to be in private practice. Today we no longer have those luxuries and many of us have significant debt burdens. The good news is that we also have access to information that the prior generation never had. A little background about me. As I said before I am a practicing radiologist in Phoenix, AZ. I went to undergrad at Indiana U. (Go Hoosiers), medical school at the Kirksville College of Osteopathic Medicine (Now AT Still Univ) in Missouri, moved east and did my radiology residency at New York Hospital-Weill Cornell Medical Center in Manhattan. I then moved west to serve my Air Force commitment at Nellis AFB in Las Vegas, NV. I then did a fellowship in Body/Musculoskeletal Imaging at Mayo Clinic Arizona. Since I finished training I have been in a hospital employed group for the last 6 years. I have always enjoyed learning about finance and have read (listened to) many of the financial books. I also spent time reading on the bogleheads.org forum which I found to be a valuable source of information. Finally I just observed that many of my colleagues and I had the same questions about relatively basic financial matters but it was difficult to find clear answers. Hopefully you find these podcasts useful. I encourage you to subscribe to them, that way you will be updated when any episodes are released automatically. Also please let your friends and colleagues know about this podcast. Please give us good feedback on iTunes, Google Play and stitcher and if you have suggestions on topics or how to improve the podcast please send your emails to comments@doctormoneymatters.com Social media links: twitter @drmoneymatters Facebook www.facebook.com/doctormoneymatters/ Please understand that this show is for entertainment and education only and you should do your own research and speak with the appropriate experts prior to making any changes in regards to material you may have heard on the show. The opinions from the guests on this show are their own and do not necessarily reflect those of the host or of Doctor Money Matters, LLC.