Why Dividend Investing Sucks

Dividend investing is apparently an amazing way to make passive income.
Best dividend stocks will give you free money every month and you will become insanely rich from dividends in no time whatsoever.
Or maybe not.
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[@SashaYanshin]

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[@mattsenkow6986]

I was mistaken. It looks like you've been preaching this awhile on your channel!

[@RandomGuyOnYoutube601]

stock buyback is better then dividends only if the stock is not overpriced.

[@terryandrewdunn]

While I agree with everything you say, there is a flaw in your argument. I am retired, as are millions of investors around the world, and I want my investments to deliver income this year, not in 5 or 10 years t ime. The purpose of this income is not to make me feel good but to pay the bills. For this demographic tax is less of an issue. What I favour is a total return approach that combines growth and dividends. There could be an argument for investing in growth companies, then selling some stock once they have grown to yield income. The problem is, growth and price appreciation is unknown, whereas dividend income is more consistent and reliable. Perhaps a diversified portfolio of total return stocks that are actively monitored and managed for on going return is the solution.

[@kennethrobinson5111]

He just did this dumb ish for views

[@Spider-Too-Too]

Cool

[@valuations520]

He misunderstands the objectives of many investors that you explained very well, the role of debt to leverage return on equity, and the (debated) role of dividends in reducing volatility (because for certain drops in stock price the divided becomes so high that the market becomes obviously irrational because it undervalues a stock on a dividend basis alone. This leads to some investors buying the stock, which then normalizes the stock price. The same undervaluation need not be apparent for companies that do not pay a dividend).

[@deeptoot1453]

There's like 300 flaws in his video, it's a complete clownshow 🤡 that's what it is. All joking aside, he made some good points although he fails to deliver the other side of every point he makes. Also cherrypicking examples he could just as well have picked examples of companies that didn't perform poorly of which there are plenty (think PEP and KO as a start). Regarding the Tax, idk where he's from but in most EU countries is deductible from your capital tax. We don't have a direct capital gains tax over here but instead our capital itself gets taxed if we have more wealth than a certain arbitrary threshold. Every single dividend tax $/€/CHF we pay gets deducted from the year-end taxes so it really doesn't matter for your overall wealth it only sucks a bit if you need/enjoy to have a ridiculously high spend able cashflow.

[@caioscofield]

lol, the clown are you guys. none of your arguments make any sense whatsoever and at best is putting make up on a pig. only 1 argument is needed to debunk any dividend argument: buybacks. that *alone* completely destroys any of your arguments.

[@JoeCoIIar]

Currently retired and receiving about $30k in dividends, I can say you just need to find a system that works well for you and makes the most sense. Of course you can also wait to invest if you want to time the market but that carries additional risk that you won't time it accurately.

[@Mhousley]

Well the real money in investments will have to be made as most of it has been made in the past, not out of buying and selling but out of owning and holding securities, receiving interests and dividends and increases in value. Compound effect

[@JoeCoIIar]

Dividend investing are surely a key way to have a passive income, just make sure you don't overlook the fundamentals of company and get blinded by its dividend. It can be great if you make 5% a year but if the stock losses 20% per year you in trouble. Invest wisely!!!!

[@henrymitchell9717]

Having just paid off my mortgage and in the process have roughly $55k, I’d like to know if it’s advisable to invest in dividends or what areas do you suggest I focus on considering the trend in the markets?

[@JoeCoIIar]

@@henrymitchell9717 Dividends are good for passive incomes and are long term investment that grow profit overtime, it's a good defense against bad market and also reduces risk.

[@JoeCoIIar]

On the contrary I’m more of a stocks and real estate mogul, Look up Noud K Scott Mikan. He’s an SEC certified investments advisor and his system’s the reason I’m so profitable on my investments, to be honest it’s been really worthwhile, good earnings and little to no engagement on my side

[@Andrew-it7fb]

The main advantage I see for dividend investing is it offers less volatility. The markets aren't always rational and its nice to have the regular income so you don't have to worry about selling in a bear market. Also, in the US in addition to IRA accounts, if you're in a lower tax bracket, long term capital gains tax is 0%. I wouldn't go chasing high yields, but SCHD has been outperforming the S&P 500.

[@justacollegestudent5147]

The issue is to pay a full-time wage at $50,000 you need about $1 million directly invested in dividend stocks so it’s not really feasible for most people. I used two assumptions here to simplify things I used a 5% dividend rate which is quite high quite a bit higher than most companies. For example, Purdue is like four or 4.2% and that’s that’s a pretty healthy dividend 5% is relatively high on average and also I assume no taxes so I kind of offset things like you know normally you’d probably invest in higher dividends than 5% on average maybe 6 1/2 but you’d also have to pay taxes, so on the gains and dividends are not tax like capital gains are so it sucks. if you have $1 million you can just invest in a diverse portfolio of some growth stocks, a few blue chips that do pay a dividend and some monthsand you’ll be way better often full on dividend investing and I doubt most of us have $1 million honestly if you want consistent income and also the safety of dividends just buy a bond. Also, the tax implications and market implications of dividends is really not good. Every time it’s relatively close to a dividend. The stock might go up a bit and then it goes back down. It’s so there’s some volatility there also dividends are taxed as regular income, which is the worst in terms of tax ability you’d much rather something the long-term capital gains would used to be 15%. I think Biden increased it but it’s still below Just regular income especially for somebody that has $1 billion and I doubt if you have $1 million you’re gonna wanna live on just $50,000 that doesn’t seem like that kind of lifestyle you’d wanna live like if I had $1 million in assets I probably would but that’s because I’m disabled and I’m earning no income so I need to stretch things as far as possible But as the rational investor, what I’d probably do is, I don’t know probably like 80 2080%, equity, 20% bonds and in terms of the equity I’d probably go like 60% NASDAQ 160% of portfolio 20%, S&P and 20% bonds and kind of call it a day I’m 24 if I was older saying maybe I was like 45 I would maybe go for like 30% dividends and maybe like You know 40% S&P 30%, NASA or or maybe even 50% S&P and 20% NASDAQ because the NASDAQ 100 in the long term has and most likely will return higher however it has a lot more volatility so there are years that it’s gonna be worse on the average over the 10 1520 years it’s gonna be a lot better than that SP 500 but do you have those 10 1520 years to make sure smooth things out so as time goes on when you’re young go straight up all NASA 100 to the moon baby but as you get a little bit older you got a risk manage a little I’m joking I’m a finance major I took a lot of risk management and stuff then I was like 100 is a very diversified fund a lot more than like most he ones It’s still risky it’s so like you know 50,51% tack but it is 100 very large good companies it’s just gonna lose a lot more during bad years and gain a lot more during the good years at but on average, it’s returns are insane. I think it’s average Returns are like 18% or like 16% it’s just insanity even compared to S&P 500 which returns great

[@Andrew-it7fb]

@justacollegestudent5147 When investing for retirement, $1 million is absolutely achievable over a lifetime. For my longest term accounts, I do have a more growth emphasis. One correction to what you posted is about the taxes for dividends. Assuming that they're qualified dividends, the tax rate is much lower. Depending on your tax bracket, it can actube 0%. The nice thing about dividend stocks is that you don't have to worry about selling for a loss if there's a drawdown in the market because you just ise the income. Bond dividends are taxed higher, unless you're invested in muni bonds which pay a lower rate. I have more dividend stocks and ETFs in my brokerage account. They offer lower volatility than growth stocks and better growth than bonds. In my retirement accounts, I will shift to a dividend approach when I get closer to retirement.

[@justacollegestudent5147]

@@Andrew-it7fb yes 1 million is, assuming you make good money and during your working years don’t were money interesting in join Eocene stocks

[@method341]

Dividends can easily get slashed or suspended in a bear market. They are not as safe as you think.

[@Andrew-it7fb]

@method341 that's why you don't just chase yield. There are companies that have been paying dividends for 25+ years and longer, through multiple bear markets.

[@ricardomariasalgado4649]

Sometimes it makes sense for companies to pay a dividend and sometimes it doesn’t. If the company chooses to retain the profits and not pay dividends, it should be earning a return on their capital projects that exceeds the cost of capital. If the company cannot exceed its WACC, paying out the cash as a dividend is a good way to compensate shareholders. Another option is share buybacks

[@Ouhterheaven]

I genuinly really absolutely love your sarcasm :D And also the content of your videos, keep rocking !

[@SashaYanshin]

Thank you Tristan! Appreciate that!

[@demoix]

Finally, I found someone explaining crystal clear to people who have not been blessed with math and think they can beat the market by investing in dividend stocks, especially with high yield. It's crazy to think that there are many people who do not know that dividends are distributed from company capital, which loses value in one way or another. But when you try to say this to dividend cult members, you become their mortal enemy after saying it is not free or extra money overall. This is nuts. It's okay for people who already have a lot of capital and want to live off dividends it's totally fine but if you have no capital, you are young and want to grow your capital and invest - what the hell do you do with high yield dividend companies...

[@samarthgandhi3369]

hey sasha, just want to ask if you could do a potential video on falling pound vs the dollar as I mainly invest in US stocks so not sure what to do right now, whether to keep DCA or not invest at all or look at european alternatives.

[@TheBooban]

I rarely buy US stocks now. Come on, its over 20% higher which means your investment has to return 20% more than what it used to. Or when it weakens, your investment looses 20% for no good reason. Just wait till USD weakens again. But enjoy your 20% higher dividends for now.

[@kevinchristian1547]

The pound is tanking because the market is beginning to realise the UK is doomed.

[@dudeus]

Compounding is the eighth wonder. Give SCHD 20 years with DRIP and save yourself the headache of growth stocks.

[@persieprince9345]

Good video sasha Do you think the new tax law on buybacks will force companies to pay more dividends ?

[@MonkeyDude1999]

Thank you for the content!! Can you please make a video on how tax works with stocks? I want get into the stockmarket and buy s&p500 index fund but I don’t know what the tax will be whenever I want to buy or sell or whatever it’s just very confusing… can you just please make an explainer video on how we get taxed (in Europe and US) on our stocks whenever we buy/sell etc? Maybe I should just talk to an accountant but I would really appreciate it if you made a video🙏🏼❤️

[@Henry-nt5zg]

Simplest option is to invest in a stocks and shares ISA. You can set one up with Vanguard, as I have, and buy the S&P500 fund, as I have done as well! You can contribute up to your ISA allowance per year, currently £20,000. All appreciation, growth, interest and gains are completely tax free, you can withdraw at any point. Hope that helps.

[@IamGrimalkin]

I think dividend investing makes sense if you're buying a ETF, since you're basically factor investing at that point. Almost by definition, a company that pays high dividends has a high profitability and invests conservatively, so by the five-factor fama french model you'll expect higher returns in the long run. The issue is *why* you expect higher returns. -It could be because of irrational markets, but if that's the case you might expect people to twig this over time and it'll get arbitraged out. How do you know this hasn't already happened? -It could be because of higher risk, which will be magnified by individual stock investing. For that reason, I don't like the individual stock focus of dividend youtubers. If you're dividend investing, just buy an index with a dividend tilt. -It could be because of other investers avoiding them due to tax, in which case it's only worth it if you don't have to pay those taxes. On the note of taxes, it's worth mentioning that only UK-based stocks have no dividend tax inside an ISA. If you're buying a US stock like AT&T inside an ISA, you'll still have to pay a 15% tax on dividends. Another thing on tax though: you could argue dividends tax is also built into a stock's price appreciation. Non-dividend paying stocks are expected to pay a dividend at some point in the distant future, as that's the only way for investors to get money out of the company without liquidating it. It can get aquired of course, but that only passes the issue onto the next company.

[@miri9600]

Sasha thanks for your video. You have completely changed my mind. I was heavy towards dividend paying stocks not I am looking for companies paying the least in dividends.

[@303Estates]

one video should not change your mind on investing... now go see 10 more and make a more informed investment... my 2 cents... good luck!

[@hengbozhou3255]

Quick question, do you know when to sell for optimal capital gain? Would you have tax burden when you invest the money from capital gain? Would the company invest in R&D or pay a bonus to executives?

[@williamcook1342]

Hey Sasha. Glad you're not flogging Masterworks. Your observation that dividends reduce the value of a company also holds for buy-backs. The REAL point is whether the dividend is sustainable, and can grow. I just ran a $10,000 investment in EPD (which postpones taxation of the distributions until final sale, a huge advantage), reinvesting the steadily growing distributions from 1998 until this year: ending figure of $252,378, just under 16% compounded annually No fuss, no muss. Make that a recurring 10K? $1,613,719. BORING OLD DIVIDENDS.

[@jeevanbasra335]

What are your thoughts on ABNB , can you make an analysis video please

[@SashaYanshin]

On the To Do list!

[@reecie2000]

We use the Inc version of the lifestrategy funds to basically save on transaction costs as the income provided allows for platform fees, but other than that...

[@konstantingrigorov1042]

Question, Are we assuming every investor uses the discounted cash flow model to value stocks? Is the price of a company a deterministic result of that equation?

[@Unclemaths]

What about dividend growth etf like VHYL. They pay dividend about 4% and have also grown in value

[@SashaYanshin]

They have grown, but including dividends are underperforming the S&P 500. Even if they were doing well - the overall point doesn’t get disproved by an anecdotal example. 👍

[@Richard-kf7ul]

Was wondering if anyone knows, what dividend taxes apply to funds/ETF's held in ISA's that hold European stocks, (ie: ETF domiciled in Ireland, funds domiciled in UK).

[@pawegrabowski644]

I don't know about European stocks but what I've noticed is that on ISA I pay 15% of taxes for dividends from US company and 0% for the ATF/companies that are on the London stock exchange including the S&P500

[@Richard-kf7ul]

Pawel, thanks for letting me know. Useful info.

[@asianinvestor15]

In my personal opinion if you are young dividend stock is not a good idea if you want to accumulate wealth more faster. Dividend stock is for people who are retired for additional income. I like dividend stock company like coco cola, main, psec, bac, jpm, wmt and I also love aggressive stocks like TESLA

I like the way how straightforwardly you make your case in this video. Well done!

[@zivmiyo]

Really great insight, I wish I watched this video earlier!

[@CK-1000]

Sasha once again proving he’s a rookie investor who likely didn’t get into the market until 2020 (the first clue was that he was a massive Palantir bull 😅) Im going to leave the same comment I left on another unjustifiably arrogant KZbinr’s video: First of all, dividends are a way to get monthly/quarterly income without having to sell shares, which is useful for people who want income without having to exit any positions. Imagine having to sell shares of a non dividend paying company for monthly income (which would require you to completely miss out on the upside/capital appreciation of the shares sold). Second of all, ON AVERAGE dividend paying companies tend to outperform non dividend paying companies. That makes sense because companies that can afford to pay dividends are normally in better financial condition than those who don’t. So in reality, dividend companies are generally safer investments. Third of all, there’s no accounting rule that states that a company’s share price must go down after paying dividends. Dividends reduce retained earnings and free cash flow. But a company’s financial statements are not connected to publicly traded stock. Stock prices rise and fall strictly due to supply and demand. Apple could pay a dividend today and the share price could still go up. Fourth of all, did it ever occur to you that people can invest in both dividend paying and non dividend paying stocks? Furthermore, there are stocks that provide both dividends and good capital appreciation. Fifth of all, to suggest that all dividend investors chase yield proves you’re a novice. Nearly every dividend investor I’ve ever spoken to says DON’T CHASE YIELD. Sasha, I know you think you’re the smartest, most knowledgeable investor out there...but you might want to humble yourself because you still have a lot to learn.

[@CK-1000]

And this false narrative Sasha has created that dividend investors push it as a “get rich quick” scheme is completely made up by him. No dividend investor (on KZbin or otherwise) has characterized dividend investing as a way to get rich. He also fails to realize that dividend stocks can (and commonly do) also experience capital appreciation. So the dividend yield is a “guaranteed” return (unless the company cuts dividends, which is uncommon for strong businesses) in addition to capital appreciation. Furthermore, there are companies that pay dividends AND reinvest in the company. Apple, Microsoft, Nvidia, etc. Furthermore, companies that don’t pay dividends also have loads of debt. Did it ever occur to Sasha that investors can invest in both dividend AND non-dividend companies for an overall healthier portfolio. Also, why is he making it seem like only oil and cigarette companies pay dividends. He’s telling a small part of the story to fit his narrative. There are so many things to pick apart about this dude’s argument. 😂😂

[@furtrapper11]

So the stock value is only based on the company’s assets?

[@Dustinisnotavailable]

Dividends in themselves are fine. Chasing high dividends is often a surefire way to fail in investing. Dividend growth is a much better metric to focus on. Of course that needs to come with increasing fcf. If dividends go up with an continuously increasing payout ratio that's probably not a great sign either.

[@Wolfhammered]

I've chased high yields and I've been killing it. But, I've only been doing it 9 years. Time will tell.

[@quokkapirquish6825]

This sounds right but in reality what happens is that the share price jumps leading up to the ex-dividend date as investors pile in at the last minute. It makes sense to pay 4% over the regular share price on Monday, get the 5% dividend on Tuesday leaving you with a 1% profit. The ex-div day passes and those people then sell their holding, increasing supply and a corresponding drop in the share price is then observed. At that point the share price looks like a decent 8% dip and other investors pile in, raising the share price back to somewhere near the regular price, knowing they're getting a great deal. Everyone's a winner.

[@leaguelegion3331]

How is your portfolio doing?

[@SashaYanshin]

Fine. Pretty flat last few months.

[@blokheadburley8363]

Sascha, how do you invest?

[@ivanhernandez7395]

Dividends are free cash flow, they use dividends to pay their shareholders as a thank you for investing into them, they use a percentage of their free cash flow to pay them out, not all the cash flow goes to us

[@MoviE101]

Can you use APPLE as a stock as there cash and debit is difference? ..... so how does this work .... they also BUY BACK

[@303Estates]

I think one great advantage is psychological. It feels good to get the dividend each month or quarter even if the stock is going down. From my experience, if you pick good dividend stocks or reits, you get both growth and the dividend, so there is a ONE-TWO punch that is working for you. Also, you mention these companies are probably not doing well, but there are a lot of great companies, like Apple, Microsoft and Coke, etc, that are GREAT companies and pay dividends. My 2 cents. Technically, you have valid points, but sometimes the psychological aspect is important too. Keep up the great videos !

[@Fatalinvesting]

So what if I want to retire early?

[@balancesheetsmatter]

Investors eventually want their capital returned. While it’s true the company can just buy back shares and you can sell them this does add other factors to the equation. 1. Your trusting the company to invest capital at good stock prices. Historically companies do less shares buy backs in bad markets and buy more in good markets, so your adding volatility. 2. During bearish markets investors needing to sell shares to get their capital return are increasing the selling pressure driving the stock price lower. Dividends are like a slow way to take profits. Also just because a company pays out dividends doesn’t mean the companies dead. Railroad companies like UNP have outperformed the market and just have a limited growth opportunity but are extremely profitable. So they send that money back to shareholders though a 50/50 of buybacks and dividends which is a nice mix imo. Most people are too obsessed with dividends for the wrong reasons though.

[@blxck3978]

Thanks. Aren’t you conflating different objectives here. If you want to generate cash flow now that’s different that longe term capital growth. Much of what you said seems like you looking at dividends through a growth mindset

[@julianhooks477]

If a company never pays any dividends, the only reason to invest is the greater fool theory. You hope in the future, someone will value the company more than you do now. Point blank period. A share of a company is worth what someone is willing to pay for it. Just because you use some dcf valuation doesn’t mean that’s what something is worth. Most finance KZbinrs have only been investing less than 10 years. They have no real experience. They just read articles and regurgitate the same old shit. Why would you want to own part of a company that pays you money, when you can just speculate and hope there’s a greater fool to buy your stocks later.

[@kpectbi]

Sasha, thanks for the video. How do you categorize Apple, which also pays dividends?

[@davidjones4130]

Look at simply wall street a stock with good future score & dividend(as a cherry on top) good financial health that should turn out prosperous?

[@marcuschalkley2355]

Wish I would of brought Pepsi instead of fiver ..

[@andy96356]

Dividend income in Canada recieve a 15percent tax rebate which makes it attractive. I bought 150 thousand oil and banks when COVID hit , oil 30$ a barrel .thank god I did my stocks have grown immensely plus dividend buy back.it has offset my massive Growth stock losses.

[@lawrenceweston922]

The dividends aren’t taxed at all if you’ve got them in a TFSA.

[@resultswithjake4709]

I’ve got to disagree on this one, if you’re looking to build a small source of passive income it’s awesome! Companies should eventually seek to return profits to shareholders, I’ve beaten the market and have been beating it for over a year. The trick is to invest into growth dividend stocks with a lower div yield also. research research research. Im personally not looking for strict growth, but passive income Especially if you’re using an ISA, it’s tax free Income, I feel like you totally disregarded this in your video. You DO NOT pay tax on anything you withdraw from an isa…. I’m building my portfolio to eventually pay my mortgage/energy bills so that I can focus on doing what I enjoy in life.

[@djonharms]

This is really interesting and you have completely changed my view on dividends!

[@SashaYanshin]

Thanks - glad it was useful!

[@bigdawg1353]

Would I rather be down 60% on FVRR and PINS or be "only" 150% up over 6 yrs on the likes of RIO, BHP, GLEN ....but getting a 10% tax free div in ISA every year since 2016 based on my entry point when these stocks were at their lows. .....choice choices 😀

[@SashaYanshin]

Nice specific picking of very particular entries in stocks just before a general market sell off comparing to a much longer outcome elsewhere. Really proves your point 🤣🤣🤣

[@bigdawg1353]

@@SashaYanshin LOL. I see what you did there 😎. Oh well, I guess time will tell and in the meantime we shall keep calm and carry on.

[@BaileyMxX]

@@SashaYanshin he's not wrong though is he 😂

[@PlagueXKill3R]

What about something like a covered call? ETF like the new JEPQ or JEPI or QYLD? I'm assuming they work a little differently considering they get their income from selling covered calls.

[@SashaYanshin]

Covered calls are another exceptionally dumb strategy for long term investors - I think I need to make a video on that too.

[@PlagueXKill3R]

@@SashaYanshin I understand that they limit upside potential but if the balance is there and done right from what I understand a covered call ETF like JEPQ will allow your capital to appreciate with the market and allow a payout from the selling of options.

[@SashaYanshin]

@@PlagueXKill3R Except if you don’t bank the 10 biggest one day moves in a typical year, you will lose money investing. And a covered call essentially guarantees that you miss on those 10 days.

[@wormius51]

I don't know much at all about investing but you seem to know what you are talking about. I never thought about dividends that way, makes total sense to me.

[@IbadassI]

There are companies without debt that pay dividends. If you only buy growth stocks that never give dividends, in order to use any money you have to sell to someone else. When you own a business you would expect to get a bonus from the profits. Either you get paid more as a business owner, with all the salary taxes or take it out in dividends to take some of the profits. Shareholders are just literally business owners who take a share of the profits in dividends. If it's in an ISA is even better than that because your dividend aren't taxed.

[@SashaYanshin]

Yes. Not every single point applies to every single company. As a business owner you can pay yourself dividends with every dollar of profit. Or you could reinvest that profit and make way more money with your business. Same exact choice.

[@IbadassI]

@@SashaYanshin Yes that is true you would reinvest, I'm not saying you take ALL the profit. If it's your business you would reinvest what you can and take what you can as profit, majority of sensible dividend companies reinvest what they can in accordance with their plans and share the rest of the profits with the owners. I have a business and do the same myself. I reinvest what I can that will increase the business and take what I can as a dividend.

[@carlkeeling]

😄Brilliant, thanks Sasha. Love it 😄

[@olafbrawler6932]

Several points aren't thought through completely and not saying this from a dividend cultists point of view, but from an economical point of view. 1. Selling small parts of your stocks involve transaction costs and spreads and usually is taxable as well. So no real downside to divs. 2. TIming of div payments are generally more or less known. 3. You can realize dividends whenever you want, sounds strange, but that's economics, because as you say yourself, the dividends, respectively expected dividends are priced in the stock. So selling a stock means realizing the current value of the expected dividends. 4. You want companies to leverage their equity using debt, so in general companies shouldn't reduce their debt to zero before paying dividend. Further more, company saves taxes by making use of debt (so called 'tax shield'). Overall not really convincing, I think a balanced portfolio with div titles and growth stocks is key and neither one is bad per se.

[@MurrMan23]

Your Ikea wall unit and Joe Fresh shirt screams success.

[@SashaYanshin]

I am a pretty simple guy. I also only own one pair of trainers and one pair of smart shoes. Sucks to be me.

[@MurrMan23]

@@SashaYanshin you’re right, I am as well, and I was being an ass. Just not as big an ass for spreading poor investment advice and false information, to new investors to be influenced by, on youtube.

[@SashaYanshin]

Have fun with the hating.

[@MurrMan23]

@@SashaYanshin I’m not hating. I actually want others to do well with investing, and in life. I’m sad people with little experience will watch this.

[@SashaYanshin]

@@MurrMan23 Unfortunately I am just sharing basic facts. Sometimes taking a step back and looking at things from a neutral perspective can be eye opening.

[@stevenbacon3878]

Very informative as usual!

[@SashaYanshin]

Thanks Steven!

[@SynapticIllusion]

Another great video! Thanks Sasha!

[@SashaYanshin]

👍

[@terraslayer6042]

The example you provided of losing money from each dividend because of taxes doesn't make sense. Because as far as I know, you only pay the taxes once, that is, when you file your tax return (at least here in U.S). So you'd be taxed on the total annual dividend, not on each one compounded. Or am I wrong?

[@HeartoftheMatter]

Sasha, this is why I love you man. You are not afraid to stir up muddy waters! I am on your side.

[@SashaYanshin]

Just saying it how it is!

[@CK-1000]

Please don’t fall for his BS. He’s not stirring up anything. He’s making videos about concepts he doesn’t fully understand and presenting it as fact.😂

[@FelixFriends]

Great video Sasha. For me the real problem is the average 3x book value. If you receive a dividendand reinvest it into stocks, you are paying on average 3x book value, so your $1 dividend becomes 33 cents...

[@Firul4is]

Your shares value is what the market is willing to pay. If you need income there's products very attractive

[@TMJ32]

Skip the 14 minutes of ranting and just go to 14:24 to get the smart advice about the reasons to invest and to not invest in companies that pay dividends.

[@SashaYanshin]

There is no ranting in this one. I literally walk you through one reason after another throughout the video. If you choose to ignore it, that’s up to you.

[@larchdental]

Not to mention GM which is heavily in debt and still pays dividend. Thanks to the CEO.

[@techshark6181]

Negative, dividends comes out of income and or profits.... The value is the same in your case, but the worth is increased AND you get an ROI unlike any other way.. You pay MORE taxes on growth stocks, Dividends are taxed at 0% to 18%... Others are taxed at 32% to 35% and ANOTHER capital gains tax. Because it is also income...

[@eigenvalue9358]

While I generally agree, its not black and white. Businesses should eventually focus returning cash to shareholder through either method, as else they'd be just bloated with cash and instead of buying the business you'd just buy a bunch of cash. Same goes for debt, as it can give leverage to a stable company, returning proportionally more to their shareholders. As for buybacks vs dividends, it only depends on taxes paid in each case.

[@MacMoneyManagement]

This was well explained, but I agree with the bulk of the comment section that says the volatility hedge is there. Also, your equation makes sense on paper but we both know oftentimes the market makes no sense and if you look at a few historically paying dividend stocks they will actually outgrow "growth stocks" over a long period although the growth stocks may pass them several times throughout that period. I think it's just a matter of who you're speaking with - if you're speaking to a young person this video hits home, if it's to someone in retirement it doesn't land. Well done though.

[@tlow5766]

Dividends are just an enforced realization of profits. If that’s what you want, e. g. because you rely on the extra regular cashflow, fine! If not: why you want dividend?

[@josephscarcella7788]

It depends were you are in the world and how the tax system is applied and benefits the share holder. In Australia if you hold Stocks in your super fund prior retirement the fund is taxed at 15% on all income. If you hold fully franked shares they're taxed at 30%. So end of year you have the income plus a 15% rebate back. At 60 there's no tax payable in your super fund so in this case you receive the income plus 30% rebate. It's a thing of beauty...more importantly in later years you LIVE off your income Wether it's from property/shares etc. Dividends and rent is your source of living while preserving capital. You can't live off the value of something....you can if you wish to sell down shares or sell the driveway of your investment property! Income is key! Blue chip shares in Australia and world wide bounce back quite quickly to par after it goes ex dividend. So your theory is not accurate in that statement. Each there own..Dividends are an an excellent source of income in strong blu chip companies and in AUS are ideal as most are fully franked. A mixture of dividend and growth stocks will do you good in the long run.

[@jensheil739]

so much wisdom for free, thank you. It helps!

[@SashaYanshin]

Thank you Jens 🙏

[@CK-1000]

Wisdom?? Where?? 😅

[@jdl9623]

Damn you Sasha. You mean all these times when I hide in the bathroom and giggle and laugh myself to sleep after checking out my portfolio and seeing that I got paid a dividend that the joke was actually on me?

[@SashaYanshin]

I guess money doesn’t buy happiness, so if them dividends make you that happy… 😂

[@jdl9623]

@@SashaYanshin Well, dividends did once made me happy, but I guess I'll need to rethink that after this video. I did thumbs up your video anyways even though I can't tell you how much it left me crushed.🤣🤣🤣

[@AzzieTheGamerr]

Dividend investing. I do this..... got 4.5k invested, making 430-450 a year and I'm up by around 300 on growth so yes I'm definitely making money, using an isa no tax,... :) so I completely disagree on what you say and honesty alot of others are saying same too, kinda Says it all and dividend are payed though company's profits so please tell me how the company looses value? Oh its not all their profits as they got plenty left over to pay debt and growing the company.

[@Andrew_Sherman]

I am not a Dividend Aristocrat fan or even think Dividends are the magic solution to all. That being said, I am not sure I totally agree with that the look anymore that Dividend investing sucks. As I move forward in my investing career, I have learned that psychology is a huge component of money. One thing I have noticed is that as your investments grow, your contributions as a measure vs your total investments decrease as a % and almost seem worthless to continue. (Imagine that you invest $25/week. On week two after starting you have doubled your investment, aka 100% a week. Now when you're at 500k the $25/week is literally nothing) To correct this, I have taken %'s of my total investments and assigned jobs based on %'s and portfolio size. Some I sell Covered Calls, Some I sell Cash Covered Puts, and Some I invest in with Dividends. This allows me to psychologically feel like I have more available cash per month and therefor more to invest per month as a % of total income as a whole. My overall goal is to get to 90% of monthly income to be invested and right now I am at 50%. The other thing that I have found is that investing in some dividend stocks has by nature given me access to sectors I never had when starting in my growth only journey. This access to sectors has to some measure insulated me during different downturns (Reits and Oil Stocks paying dividends for me to buy up more growth stocks during dips). That stability has given me peace of mind and better sleep at night. **Note** I do think your point about maintaining debt payments and not reinvesting capital to grow the business is valid for almost all companies. For things like REITs and commodities, I definitely see the benefits of cashing some out as well. Plus in the US if your married and you have long term dividends you dont get taxed until you make more than 80k/year by the federal govt - aka qualified dividends. This is quite a bit of money to live on tax free (or almost depending on state) in the US and takes a huge nest egg to even achieve.

[@miket2916]

Okayyy... PLTR, FVRR, PINS and More! Sasha Yanshin theory investor, full time youtuber

[@Uplate992]

This video oversimplifies dividend investing. Like all investments there is a time and place for dividend investments in a portfolio. The ROTH IRA is a perfect place for dividend stocks for an older retiree who wants passive, tax-free cash without the need to sell shares.

[@nbrosna1]

Took me a long time to learn this, but he's 100% right.

[@chrismills2089]

I think you make some good points. I definately would not invest money into a company just because it paid a dividend. That said I think that a company that pays a modest div say 1 to 3% is not a bad idea, not unsustainable and a nice little somthing for a shareholder . I also think a dividend does offer something in terms of risk management. For example I have not had a great time of it with Boohoo over the last year. Boohoo has been arround for sometime and some other companies in the same financial position do pay dividends. Yes you are right paying a dividend will most likely not be a good thing for Boohoo right now, but I can't help think that the directors of Boohoo are not really out of pocket and what compensation am I getting for my risk? At the moment not a lot, I am just at the mercy of the directors. Once Boohoo is in a better position I think it would be nice to receive a dividend if only to receive something from my investment when the directors have not really dilivered. The sad thing is that Boohoo are unlikely to ever pay a dividend whilst the directors hold so much stock themselves as they will be subject to tax they won't want to pay and as such I just seem to be in a position where I am not 100% convinced that the interests of directors and shareholders are well aligned. Of course there are many other companies that might not present these issues.

[@dosti5390]

Well if we invested following your lead we would all have lost a shit tonne through fiverr and palantir.

[@SashaYanshin]

I am not providing a lead to anyone. And yeah - all growth stocks are down so anyone invested in any of them is down. So what?

[@dosti5390]

@@SashaYanshin my point being you don't know what you are talking about. No one does when it comes to investing. If you did you certainly wouldn't be making you tube vids.

[@SashaYanshin]

@@dosti5390 Ok then. But I do recommend you learn the difference between earning money and investing it. Those are two entirely different things.

[@dosti5390]

@@SashaYanshin only if u agree to look into why as a former 'financial analyst' you arrived at the conclusion that for you its easier to make money from KZbin then using your gain experience to make gains on the financial markets?

[@Unpronounceable.]

@@SashaYanshin lol

[@elmanmay]

From your logic, why even buy stock if you have to pay tax on profits, ... or have a job, tax on salary ... or CD's, savings accounts, tax on interest. The logic seems convoluted just to give dividends a smear job. From my experience of stock investing since 1996, different companies have different motives for dividends. Some family owned businesses turned corporations (several executives have same last name) use dividends as a way to pay out money to family members as a more tax friendly way to do that. Some companies pay dividends to encourage investors to hold onto stocks for at least a year; try to discourage short term investors who buy and sell within 30 days on temporary dips in stock market as a whole.

[@michalkopanicky8254]

Is it better to be diluted by the non-dividend stock then? 😬 I can use that dividends what i receive to another company or wherever i want ☺️ rather to get dividend from balance sheet of company than be deluted without any dividends 😜 you have your tactics and i have mine 🙂

[@juanduran4307]

Really, you mentioned Walgreens being down 56% in 5 years, while we all know how your Palantir position and fiver position are doing? LOL Dividends stocks have super outperformed your PLTR and FIVER Stocks lol!

[@SashaYanshin]

Yes I really did. I am showing you a 5-year outcome. Interestingly Fiverr is up in the same time period. Palantir down a lot leas than 56% (Although I do not hold a position in Palantir now). And these are long-term investors. Comparing short-term performance during a general market downturn where all growth stocks are down regardless of fundamentals makes zero sense.

[@juanduran4307]

@@SashaYanshin what are you talking about? Fiverr IPO in 2019 LOL! So you sold your Palantir position for a 50% loss, cool! it makes zero sense for me to show how Fiverr and Palantir are down, yet it makes sense for you to show the 5 year chart of Walgreens... (walgreens is 30% down YTD, while Fiver is down 80%) LOL

[@Mmm2567]

Only AAPL and VUSA for dividends, rest are growth stocks for me 📈

[@MCOD1999UK]

I just like the dopamine hit I get whenever I see a dividend notification.

[@SashaYanshin]

That warm fuzzy feeling, eh!

[@alastairpearce8278]

Stock buy backs are stupid if prices are high. But good argument

[@paulevans2246]

🙏

[@SashaYanshin]

👍

[@JT-ko2ib]

If you buy a dividend paying stock, one that has good cover, near the stock's lows, it should offer both growth and dividend payments.

[@SashaYanshin]

Both high growth and high dividends? Sign me up! 😂😂😂

[@JT-ko2ib]

​@@SashaYanshin That's it Sasha, I'm coming to get you!

[@georgios9384]

1. Not all companies are growth companies! 2. A non-growth company is not rubbish by definition. 3. One might choose to invest in such companies or not based on their personal circumstances and their strategy. 4. Diversification is really important and investing in both dividend and growth companies could be part of a diversified portfolio. 5. One doesn't have to re-invest in the same stock the dividends they get, they can re-invest in a growth stock instead. 6. I don't understand why you are so negative about dividend stocks... I don't like options at all but I will never be negative about them because there are certainly winning option strategies... 7. I follow you for a long time and like your videos but I don't think that this one provides any real information or help other than hate. 8. Please consider that the majority of people don't have critical thinking to get only the positives for themselves. Such kind of videos can have a negative influence on people and we all need to be really careful... Thanks, cheers!

[@dalefullerton4553]

WBA is great example of your point, owes billions but gives away billions they don't really have..

[@Glauber17081]

It is true all the rulers and taxation sasha said, i own Nordea bank and they always pay me over 5.5% yield , i bought long ago when it was 5.30 euros, today is over 9 euros. did i do i bad investiment?

[@SashaYanshin]

Depends how long “long ago” is. If it’s over 10 years, then you’re roughly matching the S&P 500 average. In any case, 1 anecdotal example doesn’t really make or break an argument.

[@Glauber17081]

@@SashaYanshin i see, thanks for the great video anyway, i will try to learn more.

[@yahalomu27]

Agreed. Most people look easy and now, not what is right or better long term. Great explanation Sasha!

[@kevintruong7998]

Companies can fake earnings by financial statement (i.e. Enron) but companies that pay dividend will find this much more difficult because they have to come up with the cash. If anything, it keeps companies honest about their finances.

[@elmanmay]

Is $1,000 a lot of money to you? If you buy 1,000 shares of a stock that pays $1 per share dividend, at the end of a year you will have earned $1,000 just for holding that stock for a year. . . . and it doesn't matter if that stock price goes up or down. I am a small investor, so $1,000 is good hedge on getting MY money back. i.e. My bank has stock that varies $4 to $5 over a year (year after year). So I invest $20,000 in 1,000 shares ($20 stock price) after a year the stock price goes up to $25, i sell and my return is $5,000 plus $1,000 dividend for a total of $6,000 on my investment. I did that again for 4 years, for a total return of $24,000 on my principle reinvested 4 times. I prefer to take the dividends as cash rather than reinvested in small amount of shares.

[@filippxx]

You are a bit too biased on the downsides of dividends. Indeed taxes are a killer of the dividend returns, but there are so many companies with above average industry ROIC that pay out a dividend because they are shareholder friendly and return some of their earnings. AAPL pays a small dividend and has 50% ROIC! QCOM has 38% ROIC. It's not all doom and gloom.

[@SashaYanshin]

Zero bias - this is just facts. I presume you’re not investing in those companies for the 1-2% dividend… So as I said at the end of the video, investing primarily for other reasons regardless of the dividend.

[@Wolfhammered]

That's only part of the way that companies are valued. Obviously, there would be no way to do value investing if you were right. And, consequently Warren Buffet would have been wrong every time.

[@Gettin_chunky]

Totally disagree. Dividends are awesome if you are seeking income. Rather than growing your portfolio like in a growth stock. Whether u invest in growth or dividend stock should depend on the stage of life you’re in

[@tomaspartl6368]

If your goal is solely getting rich, than it does not matter if to company pays dividend or not. For example: If it is poorly managed company it can pay dividends and go bankrupt so you loose money in the end. Dividends are not awesome. What is Awesome, is to identify and excellent company in the begging stage of its life and being bold enough to invest in it and wait.

[@dosti5390]

Big flaw in your logic. If I buy a company (in the traditional sense) e.g. a cornershop. I want that business to give me a payout on a regular basis. I didn't by the cornershop so that I 'enjoy' it's growing value. Also all your arguements are for BAD companies not BAD dividend companies

[@SashaYanshin]

If you buy a corner shop, pay yourself no dividends, reinvest that money to grow your corner shop into a chain of corner shops, reinvest into building an online store and reinvest in buying additional corner shop chains, then sell the business 20 years later, you will have made a lot more money. 👍

[@hassanfarooq8860]

Exactly he chooses bad companies to justify his argument

[@SashaYanshin]

@@hassanfarooq8860 95% of my argument does not talk about any specific companies at all. Unfortunately facts are facts.

[@horizonez]

@@SashaYanshin You're talking like expanding a business is super easy lol. Expanding a business put you through more risk and i don't think there's anything wrong with not growing a saturated business. and your youtube channel can be a good example. Your youtube channel is a business. You put your money, effort, time into it, and it grew to 70k. But at this point, considering the current environment, what do you think are the chances of putting all the youtube money back into buying better cameras and microphones or even hire someone to help will grow you from 70k to 7 million subcribers? Now, if you can just keep consistant with your work, collect the payouts and use the money somewhere else(which you're doing lol), i don't think there is anything wrong with that. Your channel pretty much explains dividend stocks.

[@whatisheartscont2be645]

I think that regular dividends are more valuable to government institutions than to investors because of taxes.

[@darrendrew1281]

Not sure whether I should forward this to my buddy who keeps ranting about the 14% dividend he’s getting from PXD? Ha.

[@user-cc7yv9xl2i]

The fail on this logic, is that you asume market pricing is perfect and it isn't.

[@anthonymesa]

what about investing in an index fund that pays dividends like vhyl that pays 3%, would you say this is also a bad investment choice.

[@jman2542]

Many great companies offer a dividend and many don't, hence why I try to invest regardless whether or not they offer a dividend. But by the time I reach retirement, I do hope to live mostly off passive income and no longer have a need to grow my investments further.

[@SashaYanshin]

Exactly what I say at the end of the video. The word “regardless” is key.

[@affegorilla1299]

Omg what am I doing with my dividend portfolio after seeing this? 🤔

[@hassanfarooq8860]

Sell and buy Sasha fav palantir stock

[@affegorilla1299]

@@hassanfarooq8860 he sold pltr!

[@Tredetion]

This all makes sense. Why haven't I thought of this before...

[@SashaYanshin]

👍

[@stipebalenovic6497]

I prefer dividends, going to me as an investor, more than companies spending that money on jets, some endangered avian species, giving it to some stupid social changes fund, giving back to some community or whatever, sanitation in some part of the world where people still did not figure out how to form a functioning society or civilization.

[@terryandrewdunn]

Oh, and thanks for the tip about simply wall street. This looks useful.

[@SashaYanshin]

Thanks Terry - it's pretty interesting!

[@altairjb]

Nothing is strictly wrong with the argument, but the devil is usually in the details. WBA served as the perfect example to illustrate the point, but a company like SSD, which also pays a dividend and appreciated in share price by almost 100% in the last 5 years would have failed to support the same argument. I don't strictly invest in dividend paying companies, but i do recognize there there are shades of gray in every argument.

[@bobross7908]

I think your formula is wrong, mate... If you think about the book value of equity, you may be right. But for the MARKET value (i.e. the stock price in the public market) your cash does not impact the equity value.