Professor Shiller's Irrational Exuberance Web Site I determined the real, annualized dividend growth rate by solving: (1 + r) ^ N = (
real dividend amount at the end of N years) / (
real dividend amount at the beginning of the period).
The historical extreme of the S&P 500 index since 1950 was a reduction of buying power by 25 % (to 75 % of
the real dividend amount).
In the case of the S&P 500 the largest drop in
real dividend amount was 25 % (in terms of buying power).
Spikes in inflation have affected S&P 500
real dividend amounts greatly.
Real dividend amounts have behaved badly.
Based on the S&P 500 during hyperinflation,
real dividend amounts can fall by as much as 24 % (cumulative).
I took
the real dividend amounts of the S&P 500 index in Professor Robert Shiller's database.
It has
real dividend amounts through 2004.
Not exact matches
Then I divided the (
real)
dividend amount by the smoothed (
real) earnings E10.
The formula for the
real income of an investment at year N is: Inflation adjusted
dividend income = (initial
dividend amount) * -LCB-[1 + (nominal
dividend growth rate)-RSB- ^ N -RCB- / -LCB-[1 + (inflation rate)-RSB- ^ N -RCB- Typically, you would use a nominal
dividend growth rate of 5.5 % per year in the absence of other information and 3 % per year inflation.
The only
real downside has been the
dividend cuts, which has made my quest a «4 steps forward, 1 step back» experience (Limited Control) and the
amount of time and money it has taken to reach my current level of
dividend income.
• The following are included in annual income to qualify for an RHS guaranteed loan: − Gross
amount of wages, salaries, overtime pay, commissions, fees, tips, bonuses and other compensation for personal services of all adult members of the household − Net income from the operation of a farm, business or profession, interest,
dividends and other net income of any kind from
real or personal property − Payments from social security, annuities, insurance policies, pensions, unemployment, workers compensation, alimony and / or child support and other types of periodic receipts.
After adjusting for inflation, the (
real)
dividend amount may dip by 10 % before recovering.
It also offers
real - time quotes, view
dividend history and in - depth stock research, you can create multiple watch - lists showing available
dividend amounts and yields, set reminders and much more.
For convenience, I list the year in column A, the Total
Real Dividend Income in column B and the
Real TIPS Balance in column D. I enter the withdrawal
amounts (or
Real Retiree Income) in column C.
I argued that a 40 % drop in (
real)
dividend amounts for the S&P 500 index is unlikely going forward.
Many
dividend junkies focus on the numerator in that fraction (the high
dividend amount), but the
real driver of the returns is the denominator: the lower price.
Assuming an initial balance of $ 100000, withdrawing $ 3500 initially: With 80 % stocks and 20 % TIPS at 2 % (
real) interest, the initial
dividend amount is $ 2400.
We already know the (
real)
dividend amounts in later years with an 80 % stock allocation.
2) If it is possible to identify a long - term
real S&P
dividend growth number, is it right to think that the total average
real return for the S&P (something in the neighborhood of 6.5 percent) should match the combination of the initial S&P
dividend amount and the long - term
real S&P
dividend growth number?
The initial
dividend yield is the same, regardless of whether you are using nominal or
real dollar
amounts.
Payments Based on Referred Business: A
real estate broker and a title insurance company create an affiliated title agency that pays
dividends to both the
real estate broker and title insurance company in proportion to the
amount of business that each refers to affiliated title agency during the year.