Nostr Web Client

The utility value of stocks for me is the dividend revenue. Hoping to build that up so it can pay my expenses for the life I want to live, which will include buying Bitcoin with any excess capital I have on hand. Having an income stream is as important as having an nest egg.

David King 1y ago

Hmm... I see it a bit differently. Dividend versus growth in an equity is more of a strategic/market issue and is very dependent on management decisions of the company. It’s not an inherent property of the asset. Whatever dividend they pay today may be changed tomorrow. Could go up or down. Just as the equity value of the asset could go up or down because the company is more/less successful in the market. The utility in my mind is the product/service the company delivers to the market.

I’d argue dividends are mostly a tax inefficient way to generate income compare to owning assets that grow that you can sell off small fractions of to generate the income you seek.

I don’t think mine is a popular view, but I keep looking and keep seeing it that way. 🤷‍♂️

Reply to this note

Please Login to reply.

Discussion

Chad Lupkes 1y ago

The utility of the company is the product or service they deliver to the market. But the stock is not the company, it's just a way to accumulate a collection of capital from individuals and institutions who then retain a record of partial ownership and an expectation of return on their investment. That return on investment can come in the form of capital gains or dividends.

Out of the 76 stocks that I hold in my portfolios, only 4 don't pay a dividend, and the only reason I'm not selling those is because I don't want to pay the capital gains taxes on them right now. I've built a watchlist that helps me identify the stocks with the highest probability of continuing to pay a growing dividend, and I've done really well using that watchlist to choose what I buy in the markets. It's not all about Bitcoin, although on the crypto side BTC is the only thing that I'm putting capital into right now.

My goal with my stock portfolio is to build up my nest egg so that the dividends pay my expenses without me having to sell anything. At least that's the dream.