Not exact matches
To what extent do you view your investing life as an extension of your personal life?By that I mean to what extent do the personal morals and ethical values of Tim the man govern the investing decisions of Tim the
dividend growth investor?If you ask your typical
dividend growth investor if they would be willing to invest in a lucrative but immoral venture, say selling child pornography or crack cocaine, the answer would probably be «absolutely not» regardless of the yield, valuation or growth prospects of the underlying venture.And yet, ask that same investor what their thoughts are about Phillip Morris and they would probably describe what a
wonderful investment it is and go on about why you should own it.Do your personal morals ever come into play when buying
companies, or do you compartmentalize your conscience, wall it off from the part of your brain that thinks about investments, and make your investing decisions based on the financial prospects of the company?The reason why I'm asking is that I keep identifying stocks of
companies that I love from an investing perspective but despise on a human level.I can not in good conscience own any piece of Phillip Morris knowing the impact that smoking related illness has on the families of smokers.You might say that the smoker made his choice to smoke so you don't mind taking his money, but his children never made that choice and they are the ones who will suffer when he dies 20 years too soon.
Living below your means and investing in
wonderful companies that pay rising
dividends won't get you rich overnight.
Dividend growth stocks also usually outpace inflation because
companies that are able to grow their earnings and grow their
dividends usually have a great brand, a
wonderful product and some type of economic moat.
I could have taken the angle of encouraging consumerism in the name of funding our
dividends, but the
wonderful thing about many of the
companies that we
dividend growth investors tend to invest in see secular demand for their products and services.
A steady
dividend check is a
wonderful thing, especially when it's paid by a
company with good long - term growth prospects.
I am fine with that, the issuance of shares to pay
dividends led to a dilution for existing shareholders, the flipside is that there is a witholding tax on cash
dividends from Royal Dutch Shell of 15 %, so my income from that
wonderful company will be lower than in the previous year (it was around USD 600 in 2017 and will be around USD 500 in 2018).