ZeroToFreedom- My Journey To Financial Freedom


(Georgi) #21

Made a new post for the 4% rule around the early retirement and why I am not a big fan of it.
To everyone that would like to have a read https://zerotofreedom.org/the-4-rule/
Of course any questions are welcome and any feedback appreciated.


#22

Dividend payouts are no more guaranteed than growth. A company can choose to send out its net profits as dividends, or to reinvest to grow the value of the company, or do a mixture. What is relevant for FIRE is total gains.

The main difference between the 2 from an investors point of view is the tax situation. If you don’t have all your investment in an ISA, then you’ll lose more of your gain due to tax with dividend paying stocks compared to growth stocks.


(Georgi) #23

It is a matter of an approach I would say, there is not neccesarily a right or wrong strategy here. It is just I find it easier to value, track and project the dividend income.


#24

Sure, but most of your blog post is about why you fear 4% may not be enough, due to an extended and unprecedented downturn. The 4% rule would still apply for a dividend investor, and if you don’t believe in it for growth stocks, there’s no reason you should believe in it for dividend stocks.

So if you don’t trust it, I hope you plan to invest enough that you can live off 3, or 2 or 1%, or whatever you do believe to be safe. Imagine your own worst case for growth stocks, then imagine your dividend stocks having their dividends cut by the same amount.


(Georgi) #25

The probability of a company cutting their dividend by 50% and a company dropping by 50% in price is not the same if that is what your are implying. Any company in the world at some point goes down in value by 50% for one reason or another and that doesnt even have to do with an economic downturn. Also there are companies who have gone through things like the great depression or the world wars, but still kept paying dividends.
What I am trying to say is that a company’s dividend depends on their bussines, while a company’s share price depends on sentiment, atleast in the short run. Of course in the long run that evens out, but in any given 2-3 year period anyone’s portfolio can be down lets say 50%.
I hope you understand what do I mean. Again I am not saying that my method is right or wrong, but it is how I feel more comfortable.


(Georgi) #26

Good morning guys, made a post about some of the lessons we can learn from the very long investing career of Warren Buffett- the greatest investor of all time.
For anyone interested: https://zerotofreedom.org/tips-from-warren-buffet/


(Ryan) #27

Had a look around your blog - very good stuff. Easy to navigate and read, and nice menu at the top.

I am also a UK blogger, blogging about personal finance, investing and financial freedom! Keep up the good work mate :muscle:


(Georgi) #28

Thanks a lot for these words. Recently started doing it and I am figuring things out as I go, glad you like it.


(Georgi) #29

Good evening guys, just made a little guide for dividend stocks to anyone that is interested : https://zerotofreedom.org/beginners-guide-to-dividend-stocks/
If there is something that you want to know about dividend stocks let me know I am going to add it to the article.