7H·

Switch to dividends?

Hi all - I had planned to expand my portfolio a few weeks ago because of an inheritance. Now a few things have happened: Money is there and at the same time the company is asking if I would like to quit in return for a severance payment. Yup, maybe I have. Do something other than IT, for example ... Volunteering at the food bank, riding my bike and Vespa, sports, traveling & chilling or something... But that's another story :-)

But does it work financially? Let's assume about 1.2 million in total (600k invested, 600k cash). House paid off, 2 kids out, wife self-employed, but only a small amount. I'm 58, I can retire at 62, with official deductions. That will therefore be a manageable pension in total. That's why I'll need monthly cash in 3 years. The severance payment would last until then. Now I'm thinking about reallocating a large part of my portfolio from tech, world ETF, S&P and some individual stocks to high-dividend stocks: 10% $ALV (+0,57%), 10% $MUV2 (+0,45%) , 10% $O (+0,63%) , 10% $VHYL (+1,23%) , 10% $WGLD (-0,84%) , 20% $IDVY (+0,43%) , 10% $XMME (+0,64%) , 10% $XEON (+0%) (in case the dividend falls in volatile phases and to bridge payout dates). dates), 10% play money GTAA, 2Spy, Momentum etc----hahaha, actually I just wanted to mention @Epi mention.

With the above you get about 4% dividend. At 800k = 32000-25%= 24000= just under 2k net on top. That should be enough. The assets won't grow that much, but cash per month is enough. What do you think? Completely wrong way of thinking? Forgotten something important?

VillaSpilla

@VillaSpilla

3Mês·

Anlage Blickwinkel - Heritage

Dear Community,

I have a 300k securities account with 50% shares, divided between $AAPL (+2,14%)
$ALV (+0,57%)
$AMZN (+3,59%)
$NOVO B (+3,18%) and some $VOW (-0,37%) the other 50% in ETFs, split between $CSPX (+1,53%)
$EXUS (+0,54%)
$NADQ (+1,73%) and something $DE000LS9U6W1 (+1,15%) ...

A strong US (tech) focus is desirable. Not because I believe that the USA does a lot of things right, but shareholder & shareholder value primarily have an influence on entrepreneurship in the USA, ok and the Mag7++ have a top position in other ETFs anyway.

I use the MSCI EX USA to shift the focus away from/to the USA as required.

I have built up this status quo over the last 2 years, after having a lot of individual stocks in the years before and following the "greed eats brains" strategy with some losses (see other post).

Now I would like to read your opinion or collect a few points of view, knowing that there is not THE right one. In the near future I will receive an inheritance of around 400,000 euros. Now I am torn. No, I don't really know what to do. My reflex was "keep going and split up if you're happy with the above strategy/allocation", but perhaps more asset classes could be included with this sum .... and/or more focus on crypto, or more diversification or or or or .... Or everything on GTAA , @Epi :-D hehe - What do you think?

PS: I am 58, IT manager, EFH paid for, 2 children, studies feddich. Controlled build-up with withdrawal plan start in about 5 years. Shift from 50% individual stocks to 75% ETF planned in 2025.

23 Comentários

Maximilian@Max095

It's sad to see how "little" dividend comes out of 1 million... 🫣 especially when you consider how long you have saved and worked for it.

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Dividende > Zinsen@GoDividend

@Max095 if you go via ETFs you have at least 30% tax-free due to partial exemption
Are already at 2200€ with 4% div return

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Maximilian@Max095

@GoDividend wow 😮

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John@Transporter

I would roughly calculate how many euros I need to live on a monthly basis (also think about health insurance, for example, which you might have to pay yourself until you retire), add a buffer and inflation of 3% and also include reserves for the house. Then extrapolate this sum. Once until retirement and then from retirement. If this all works out in terms of costs, reallocating is certainly an alternative. Instead of individual dividend stocks, you could also use a high dividend ETF. This will also yield around 4%. Or you could invest a small portion (e.g. your play money) in a BDC or the Aberdeen India Fund. You can also get a 10% dividend there. All in all, if I were in your shoes, I would do it immediately. You'll never get back the time you've given yourself and you don't know what will happen later. You could always do a mini job or a midi job on the side if you wanted to. This would also solve the problem with health insurance.

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VillaSpilla@VillaSpilla

@Transporter perfect. That's exactly what I did. Extrapolation up to retirement with KV and house etc . Fits approximately with the settlement.
Then I asked myself: why more and more assets? Better to stop now, at 59 I can still do EVERYTHING = carpe diem. However, I would like to remain a volunteer. I've received money for my work for 30 years, now I'd rather do work for people or institutions that need it ☺️

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GerdaKommer🦛@_Hippo_

@VillaSpilla I can only tell you one thing from experience. There is no calculation that holds. With more free time, you simply need more money than before. For this and other reasons, I endorse what the previous speaker said

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S.A.U.@SAUgut77

@Dividendenopi think your advice might be needed here.

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Abteilungsleiter D.@AbteilungsleiterDerLiebe

I'm much younger, but even with this level of assets, the risk would be too high for me. If I were in your situation, I would look for a job that suited me (both in terms of scope and activity. Maybe something similar to what you do now but for 20 hours or something else). The salary should simply be enough to cover the upkeep of the house and food. Then you have health insurance etc. I would invest the money in dividend stocks - I wouldn't shift anything around. You can then either spend the dividends or reinvest them. Depending on the situation.
For me, the risk of the money being gone in the end or not being enough would simply be too high. If you don't like your new job, you can always quit. All without pressure. Not a recommendation, just my thought 💭

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VillaSpilla@VillaSpilla

@AbteilungsleiterDerLiebe But why should the risk be too great? After all, the amount is not getting any smaller. The goal is to live off the dividend and pension. And my wishes aren't getting any bigger, no Ferrari, no boat, no horses, no Rollex 🤣😜.
I just like the idea of charitable work, just to see life from the other side. Doing something similar somewhere else would somehow be too boring for me. I know that I'm good at it. ☺️

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Stefan@Da_Fischi

In your situation, I would switch to dividend (growth) ETFs, rent out the house, buy a sailing boat and take my wife around the world ⛵ (that's my plan as soon as I'm 60, let's see if it works 😅)

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Novius@Novius

Great idea: time is worth more than money, and doing good for others is good for yourself. About the investment goals: Maybe take a look at this ETF: $EUHD

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Dividendenopi👴@Dividendenopi

Good basis, I have pretty much the same assets to invest, 1.16 million. Paid-off own house and two-family house rented out, partially financed for tax reasons, rental income after interest before repayment and taxes just under 1000 euros per month, my portfolio shown here with dividend shares gross dividend per year currently 28.5k, invested 335k. Will be increased to approx. 400k. 210k in government bonds, corporate bonds and various certificates, bullet bonus certificates and quarterly distributing certificates, 35k in other ETFs not shown here, a theme ETF and a dividend ETF. 25k with a secondary broker for gambling and trading. Around 600k -still- in call money to a small extent and in fixed-term deposits with a slightly higher interest rate of between 3.85 and 4.5% from the beginning of last year as an interest staircase with a remaining term of 2026 to 2028, will be successively invested in the markets at maturity. I will soon be 61 and stopped working on January 1 this year. My wife is still working part-time as a pharmacist. All in all, I'm very defensively positioned and can still make a very comfortable living from it. That's just an example without going into too much detail.

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VillaSpilla@VillaSpilla

Thanks for the feedback @Dividendenopi! That sounds pretty much the same 🙂 (except you have more 😇😅). I lack experience in the defensive area. In the last 10-15 years, I've been more in the greed eats brains 🧠 area 😝. Learned a lot, lost a lot in many places, gained a lot in others. Overall, nowhere near as good as a world ETF over the last ten years. But it's never too late to adjust.

28K gross dividend with just under 350k invested is great. That's almost 8% dividend. I had only calculated 4% for the securities. Then I'll have to tweak the selection of securities again. I only picked out the ones above 👆justETF and then ran them through the AI 2-3 times. I'll take a look at your titles 🙂🙂👍🏻👍🏻.

I haven't even looked at government bonds yet, I had rather looked at corporate bonds - I actually had a nice euro bond here $EHBA. But I'll have to look again, I'm not familiar with it.

I would also like to add 2-3 acc ETFs to the portfolio - the S&P500 etc. should also help a bit in the portfolio over the next ten years.

Okay, and I will also keep 2-3 individual stocks. I've had Allianz for ten years and it's always helped me a lot, so I'll keep 150k in there.

It would be nice if I could ask you something again, although that's not possible here 1:1 correctly, only via the forum! Not bad, but it's specifically our case for the young 🧒 community and perhaps boring. 😅

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Dividendenopi👴@Dividendenopi

@VillaSpilla It's all good, you can ask whatever you want. I have no secrets and if others find that boring then they can keep scrolling 😇. And comments about how much performance I give away and the average monthly returns are never enough and anyway, I'm happy to endure them. 🤭

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VillaSpilla@VillaSpilla

@Dividendenopi Very good 😇. Then I'll collect and check. I'll have to see why I only managed 4% as a dividend and you 8% .... Maybe your vola is higher, let's see. 👀

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Dividendenopi👴@Dividendenopi

@VillaSpilla The vola is definitely higher with high dividend payers such as $HAUTO or $TRMD A. The latter have been disappointing so far this year with significantly lower dividends than expected in addition to share price losses, but will still achieve a 10% return. Tobacco like $MO I am also just under 10 due to my equity, $BATS 9, $IMB 8, and e.g. $VZ 7. The Norwegian energy stocks are yielding well over 10 and even 12. A bit of effort with the withholding tax, but at some point it is routine and can be done in a quarter of an hour. $OMV and also $MUX are above 10. That's a first orientation

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Steffen@Maveric2005

@VillaSpilla we are in a similar situation :) my wife and i are both 37, have built up a portfolio of approx. 1.2 million (600k invested, 600k cash call money)-> focused on dividends/distributions/premium from the beginning -> we have an average distribution yield of 6%, i'll link you to our values $XDWL, $JEPQ, $QYLE, $TDIV, $FGEQ, $JEGP, $MAIN, $ARCC, $XSX7

This is our "base". At the moment, all earnings are reinvested directly. We do it this way because we simply don't want to follow a classic withdrawal plan later on.

We also have a few other individual shares in the portfolio that we play with. But the core remains the same :)

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Joris@Joris

@Dividendenopi I like to read along.
Not that I'm stepping on anyone's toes, but I'm going to say 10% dividends from a 1 million portfolio will leave you with 900k in your portfolio and 100k paid out. Doesn't it make more sense to take non-distributing ETFs and then benefit from the individual withdrawal and partial exemption?
I have now invested in an ACC ETF in order to build up as much wealth as possible, as I don't need dividends now and the tax is partly offset.

Now coming to VillaSpilla's situation. Doesn't it make more sense to leave everything as it is now and take a few stocks that you like. Then take them as you need them. Or just a good mix.
Only invest in what you really understand. Don't quite understand bonds either 😅
I have the feeling you want to throw your entire strategy overboard all of a sudden, but it's worked so far, hasn't it?

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GerdaKommer🦛@_Hippo_

I can't stop wondering what you've been up to that the company wants you out and even pays you for it? Please let me know 🥹

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VillaSpilla@VillaSpilla

@_Hippo_ 😆😆😆 Nothing. Happens to managers in corporations sometimes and even more so with restructuring + higher age + higher salary 🙂. That's just the way it is.

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S.A.U.@SAUgut77

@_Hippo_ didn't you want to go on vacation 🤷‍♂️

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TomTurboInvest@TomTurboInvest

Sounds good - you're a few years ahead - I'm in my early 50s and have similar plans for my late 50s - provided nothing major changes.

Have you taken into account the fact that some tax will be incurred if you reallocate the 600k investment, i.e. there will be a little less left for the rest of the investment?
I've already calculated a couple of scenarios for the decumulation phase, including inflation and inflation-adjusted withdrawals. I will rely on targeted withdrawals rather than dividends, as I will most likely not need the same amount of pension allowance every month. And if I'm still pursuing my hobby of trading in a few years' time, I'll need to withdraw little to nothing.

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Harald@Madhatter5566

Reallocating is actually nonsense, as a lot of taxes are incurred when selling. And there is absolutely no difference between dividends and non-dividend-paying positions, from which you can sell parts as appropriate. If money comes in now, if dividends are so important to you, I would just go into dividend stocks (as before, it doesn't really make a difference), but reallocate what's already there? Hmm... rather no.

In my opinion, partial sales are also much more flexible than dividends, where you either have too much each month or still have to sell something.

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