3Mon·

The simplest dividend strategy that always works


You buy / save four dividend-paying dividend ETFs such as:

- iShares EM Dividend, A1JNZ9, 8,0% dividend yield, four distributions / year, 0.65% TER, -3% 5-year performance

- iShares STOXX Europe Select Dividend 30, 263529, 6,4% Dividend yield, four distributions / year, 0.32% TER, +38% 5-year performance

- iShares Asia Pacific Dividend, A0J203, 5,8% Dividend yield, four distributions / year, 0.59% TER, +11% 5-year performance

- iShares UK Dividend: A0HGV6, 5,4% Dividend yield, four distributions / year, 0.40% TER, +19% 5-year performance


> You could just as well take other dividend ETFs with attractive payouts or more than four to increase the number of payouts.

>> When comparing the performance of dividend ETFs, you must of course add the annual distributions. add. Some dividend ETFs only pay out a pathetic 2% to 3% p.a. and then of course had more price performance. << Swipe


15 advantages of this strategy

1) 16 distributions per year is very motivating (especially for beginners). With five different ETFs of this type it would be 20 per year.

2) These distributions are reliable, because if a company/stock cuts or cancels its dividends, it is automatically dropped from the respective index. Other shares move up. Always top of the dividend league in your portfolio.

3) The ETFs mentioned can be invested in free of charge with almost all brokers and banks.

4) By diversifying the many shares in several ETFs, the risk associated with individual shares is avoided.

5) You save a lot of valuable time, as it can be a full-time job to follow all the news, analyses, quarterly reports, annual reports, ratings, etc. of e.g. 20-30 individual stocks. That's what an analyst does. But most people already have a full-time job. Many have a degree, training, family & children, hobbies, duties, do sport, want to travel or have to look after relatives. If you waste countless hours on shares in order to earn a few euros more a year, depending on your position, your hourly wage is often just a few cents. You might as well go to work regularly, including tax.

6) Dividend payouts are often increased so that dividend growth is recorded.

7) The dividends collected are not spent on consumption, but reinvested in the weakest ETF every six months. This gives you even more dividend growth.

8) If you get a pay rise, you also increase the savings plan installments again. This increases dividend growth again.

9) As a result of points 6-8, you will eventually receive a 13th salary from dividends alone.

10) If you stick with it for a few more years, you will then collect five-figure dividends. Then people will arrive and ask how you managed that. It's easy to work out when you'll personally reach that point.

11) Even if you have to cancel your savings plans at some point due to an emergency, you will continue to collect your 16 dividends every year for the rest of your life. And then you pass on these ETFs and your descendants will collect 16 times a year for the rest of their lives. So it's very sustainable.

12) In crises and crashes on the financial markets, you continue to collect your dividends while others mourn their price losses. This gives you peace of mind and prevents "shaky" hands / ill-considered panic selling out of fear.

13) The constant distributions allow you to comfortably utilize your annual allowance without any trading, selling or market timing. It is so simple. Also suitable for junior portfolios.

14) This strategy helps to create a passive income, which then increases the measly German pittance pension very well after decades. The alternative is a deposit bottle pension. No thanks.

15) After a few years, you will become familiar with the phenomenon of collecting double-digit personal dividend yields. More than 10% is quite realistic, as you had much lower purchase prices years ago and the dividends are constantly being increased. It was the same for me a few years ago. I had the aforementioned UK Dividend A0HGV6 and Euro Stoxx 30 Dividend Select 263529 and after only a few years I already received 11% personal annual dividend yield. No overnight money or fixed-term deposit can match that. Unfortunately, I then sold both ETFs to sink the money into Wirecard. Biggest mistake. Please don't be as stupid as me. Thank you.


Maybe a nice post to save with the bookmark at the bottom right



> Another tip: Please check the ETF data directly on the issuer's website. Broker/bank data is often out of date and therefore incorrect.

>> What other advantages does this strategy have? How do you like it? I have explained it to many beginners and they have been very happy with it for years and are making great money without stress and work.

>>> In the podcast "Buy High. Sell Low" episode 17 this ETF strategy is explained in detail with a calculation example. Link in profile description. Link: https://open.spotify.com/episode/0LzAFILz0zNiErh5lCJOvS?si=16oQ7uLXQ3WGGXdfeIvJnA


#etf
#etfs
#ishares
#blackrock
#dividende
#dividenden
#dividend
#sparplan
#juniordepot
#strategie
#traderepublic
#aktien
#aktie

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36 Comments

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I'm not a fan of the dividend strategy at all. You give away returns through poorer performance and taxes. If you have assets, you are welcome to use DIV ETFs, but they are rather unsuitable for accumulation 🫡⛔️
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Caution! The Ishares EM Dividend has lost almost 29% in the last 5 years. If you then add the distributions, you get to about 0%. The Eurostoxx Dividend is slightly better. I also like dividend ETFs, but I don't think the strategy with these ETFs is recommendable.
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The dividend strategy will soon finance my 4-day week long before I retire, but I don't think the ETFs suggested here are suitable, there are better alternatives such as a mix of world ETFs and equities or BDCs.
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@tommycash simply a 13th salary only through dividends!
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I don't know, if I want dividends, I buy quality high yield stocks and not etfs. Dividends and etfs just don't go together for me. 😅
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Top contribution! I myself have never understood why you would build a dividend portfolio with 30+ individual stocks when you can simply buy one or more high dividend yield ETFs. Lower risk due to even broader diversification and no effort because the ETF takes care of adjusting the compositions.

In principle, however, the question also arises as to whether a dividend custody account (>savers' lump sum) makes sense in the savings phase.
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Excellent contribution! There's a dividend 🚀 for that!

What many who use the growth strategy (and this strategy is also good) need to consider is that with your strategy you are primarily focusing on building an income, not on price increases. The price increases are 2nd and come after your income stream to be built up.

In short, you could also call it: "Build your income!". I will share your strategy here and on X and Threads because I identify with it. I'm in the same camp as you, even though I have few assets that pay out nothing and are geared towards growth.

As a stock picker, I don't mind picking individual stocks, of course, but you're absolutely right. For those who don't feel like it and just want to build up another income stream in a pareto-optimal way to become less dependent on active earned income, savings plans on dividend ETFs are just the thing. At some point, the stream will hopefully be large enough to cover the cost of living or even replace the net salary.
With dividend-paying securities, you can replace your income in the long term or at least cover all or part of your living expenses. If you save properly and put as much as possible into the stock market, you will plug your pension gap. Well, in other words, you've said that yourself.

I really enjoy looking at my portfolio and, as you write, directing the dividends to the weaker stocks. The strong ones run themselves, like horses in a race. For me, some savings plans are simply no longer fed from my net salary, but through reinvestment.
The difference to accumulation: I can decide for myself what I use the dividends for, what I invest them in or whether I put them into other tangible assets. I don't have this control option, without changing the savings plans from my net salary, with accumulating securities.

And now there's something extra: I receive cashback when I go shopping, both online and offline through Payback/DeutschlandCard for normal grocery shopping. I then put the cashback into the deposits, as a kind of "cashback pension". This gives me an additional pension on top of my equity pension. Of course, these aren't mega sums, but at least it's a bit more for the snowball rolling down the slope.

I agree with you on one point: the psychological aspect is extremely important for me to prevent rash selling in a crisis. This aspect is even more important to me than the advantage of the accumulator (exl. advance lump sum).

Another advantage: when we are old (or more likely) and want/need to live off the income, we receive dividends free of charge. Those who only have accumulating shares (who have followed the 4% rule) have to be constantly active, sell and pay order fees. Perhaps at this point there is a kind of compensation for the disadvantage that we have already paid capital gains tax regularly. We then only have to set up a standing order from the clearing account to the current account based on the month of the lowest distribution and can relax.
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That sounds great.
But does that make more sense than simply saving directly in Dividend Growth ETFS?
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If you want it simple, you can probably do it that way. Wouldn't be my thing... far too boring 😁 saved anyway, I'm sure it will be interesting for some people here 👍🏼
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However, the iShares EM Dividend ETF no longer pays out 8%, but only just under half. Or am I getting this wrong?

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