According to his books and others I've read recently, this is a much better route than
relying on capital gains to get you there, provided it is done right and the due diligence is done.
They were
relying on capital gains to keep themselves solvent.
They occur because we have a debt - fueled expansion in some major asset that is a temporarily virtuous cycle, until players begin
relying on capital gains to keep their position financed.
Economic agents have to
rely on capital gains to make money, and that is where bubbles pop, and go into reverse, with a vengeance.
Markets that
rely on capital gains tend to get capital losses.
Those high yields
rely on capital gains on the properties.
These will be smarter speculators than the ones buying in 2005; they will not only not
rely on capital gains in order to survive, but they require a risk premium.
Not exact matches
More importantly, though, dividends and
capital gains tend to go up and down with the economy, which has translated in wild tax revenue swings for states that
rely heavily
on personal income taxes.
And, venture
capital investors
rely entirely
on capital gains to make their money, so if you absolutely don't want to sell your business, then VC shouldn't be an option.
And yet the tax code continues to give preference to
capital gains over ordinary income — a major advantage to investors but not to people who
rely on paychecks for their living.
For example, without an inheritance tax, more resources would shift to zero sum real estate investments that
rely on appreciation in real estate values and away from retailing and manufacturing and construction sectors that generate current income more than
capital gains.
My family is not
relying on dividend income to support our lifestyles yet as we are pretty young so until then we will purely driven by performance of the total portfolio including dividend and
capital gains rather than dividend income alone.
Other income - smoothing strategies, such as investing in flow - through shares and the timing of
capital gains, are more complicated, but they all
rely on the same basic idea of smoothing your income and deductions to reduce the total amount of tax you have to pay.
From 1900 - 2000, a portfolio with dividends reinvested would have generated nearly 85 times the wealth of the same portfolio
relying solely
on capital gains.
It's more comforting to focus mostly
on reliable dividend payments versus having to
rely solely
on capital gains.
They earn their money through the subscription fees, not through
capital gains on their beat - the - market suggestions, that means that they don't have to
rely on themselves to earn money, they only need you to
rely on them.
Governments should not
rely on increased taxes from
capital gains, or real estate tax assessments.
The country
relies on indirect taxation for its income but has never levied income,
capital gains or wealth tax
on its residents.
They apparently
relied on the permanence of
capital gains; they may well be more skeptical in the future.
Also notice that if we can't
rely on central bankers, et al to get credit right, at least we've removed any incentives to drive the price of housing through the roof due to interest deductibility, negative gearing and
capital gains tax holidays.
Leasing, disposing of land to
gain capital or to use as collateral in Indigenous communities
relies on Indigenous individuals, families and communities having the resources and capacity to manage these financial processes.