In this lesson, I am going to
use yield on cost to show you how you can achieve a wonderful goal: To receive, each year, in dividends alone, an amount of cash that equals the market's long - term average annual total return.
Not exact matches
The projected 12 - month total from above is
used to calculate
yield on cost.
Your chosen route may be speed of packing, volume of throughput,
yield of packed product, lifetime ownership
cost, return
on investment or best
use of available space.
But large banks, corporations and wealthy individuals
use properly structured life insurance contracts to obtain tax benefits, increase
yields on cash, reduce borrowing
costs and create positive arbitrage
on equity loans.
In an RRSP, you will pay a 15 % withholding tax
on dividends if you
use VUN (this works out to a
cost of 0.30 %, assuming a 2 %
yield).
Investing in commodities indices that are constructed
using long or short positions in futures
on physical commodities whose value is determined based
on the price of the underlying physical commodity plus
yield and that trade
on public markets that provide adequate liquidity and transparency, with negligible
costs and no storage deterioration risk, offer a practical method to gaining commodities exposure and can provide a means for market participants to access the five components of the returns of the asset class.
Other lenders
use bond
yields, which can also
cost you a small fortune, depending
on bond performance.
Index A published interest rate against which lenders measure the difference between the current interest rate
on an adjustable rate mortgage and that earned by other investments (such as one, three, and five year U.S. Treasury security
yields, the monthly average interest rate
on loans closed by savings and loan institutions, and the monthly average
costs - of - funds incurred by savings and loans), which is then
used to adjust the interest rate
on an adjustable mortgage up or down.
Your
use of the term «
yield on cost» is not a way of saying DG investing requires you to save less for retirement.
Two widely
used index rates are the
yield on 1 - year constant - maturity U.S. Treasury bills (CMT) and the 11th District
Cost of Funds Index (COFI), published by the Federal Home Loan Bank of San Francisco.
Using the current years Dividend Growth rate of 2 % and projecting 2 % forward the annual dividend income in 10 yrs would be $ 0.00 with a
yield on cost % of 3.00 %
The most recent drought from 2006 to 2007 reduced Australia's economic growth by about 0.75 percent.2 It curtailed agriculture, killing sheep and drastically cutting grain
yields.2 Restrictions
on water
use in urban areas
cost around $ 815 million each year, and affected more than 80 percent of Australian households.2
Using these criteria
yielded 1,481 articles (including duplicates) the majority of which focused
on the immediate credits or debits of the carbon tax for families and industry, rather than the projected future
costs to Australian incomes and / or GDP.
* Lenders that choose to
use the new GFE and HUD - 1 forms before the effective date must immediately abide by the new rules
on cost discrepancies and calculating the
yield - spread premium.