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Tuesday, January 24, 2017

What Will We Do if Dividends Die?

I'm not saying this to scare you.....
Maybe you, like me, read authors over the past decade like Canada's own "Lazy Investor" a.k.a
 Derek Foster....who taught us the simple formula called "dividend investing". He made it seem so easy and do-able for even the average Jane or Joe.

But I'm a planner. I not only want to know what is coming down the bend...but I want.....no... I NEED to be able to prepare for whatever is coming. No matter WHAT that something is.

So sometimes, it pays just to imagine different life scenarios and see how prepared we are, if any of them come about.

So let's say, just for argument sake....that dividends somehow get eliminated from most corporate stocks.
What if we or at least a good size chunk of us, depend on dividends to fund our retirements?

What would  be the plan? Sell the stock? Cash it in and live off the sale of the stocks?

Or will we be forewarned and be able to reformulate our strategy and develop other "income streams"???

Remember when the tax laws changed and REITS suddenly came on the scene? We adapted and learned what they were and bam....suddenly they became trendy and occasionally profitable.

Well, let's summarize the plain vanilla def of dividends:
At the end of the day....all that dividends are..... are income streams.

I think what is key....is that folks like me....who want to stay ahead of the game by staying in the know, just continue that BASIC habit of  gathering current financial knowledge. Just simply by reading what is
going on in the business/financial community, we will stay prepared and able to adapt to what is new and unknown. The late millionaire Verna Oller read both Barrons and the Wall Street Journal as often as possible....even though she was so thrifty, she refused to buy the copies herself, preferring to read them second hand from friends or for free at the library.

We also, need to be prepared emotionally to not get too attached to any one single income stream or investment strategy. We may need to get more flexible to adapt to the new investment "tools" of the near future.

Remember when ETF's were unknown? Well, many folks  have embraced them.....not me in particular, but many folks have.

So, i guess in a nut shell....I'd have to say this....that the only way that I am going to stay prepared is to STAY INFORMED. And that means I am going to continue to sniff out the business section of the Globe n Mail whenever I can and any other respectable source of financial/business data that I can glean from the net and bookstores, local and college libraries and the cafe's I lurk at.

I am going to listen to what the "experts" are saying and what they  aren't saying. Sometimes we need to read between the lines. Because there's one truth I have observed in my wee little life....and that is that where there is mastery....there is always going to be someone who wants to brag about what they have discovered.
It is human nature to want to share something you "know" with those who don't.   So while, I may not yet be moving in the circles of the financial titans of our day, I do humbly admit, that I am a gal who thrives on gleaning valuable nuggets from those who know more than I do. I am glad to humble myself if only to learn a wee bit more..... and understand more and grow more. Knowing more, helps me prepare. Preparing helps me plan. And finally......with a good plan, comes peace.

So if and when "dividends" change or morph into something new, you can bet your retirement plan that someone will already have created  a new  and better way to dance through the tulips.
Just keep your ear to the ground ok?