Observations on life

Why dividends are important – The Motley Fool

Not much to say about this from the Motley Fool. It’s certainly something to think about.

A single dollar invested in the stock market in 1950 would be worth $123 today. That’s pretty incredible, right?

Not so much when you consider this…


Because that same dollar invested in the market in 1950 with dividends reinvested would be worth $1,144 today.

What do you need to live comfortably in retirement?

The Motley Fool article says:

According to Vanguard, the average American retiree can expect their 401(k) plan to pay out roughly $4,000 per year.

That’s less than $340 per month to depend on for healthcare, food, or housing – and that’s before hobbies and leisure.

imageNot too appealing is it?  That $4,000 means the average retiree will have only $100,000 in his or her 401k at retirement.

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2 replies »

  1. Unfortunately I believe that day traders and hedge fund managers have changed the market from long term investing to short term greed. The boardrooms must deliver short term gains or be subject to takeovers and “activist” investors. To me a high steady dividend was a sign of good corporate fiscal management and any cut in dividend was a sign of trouble. There are no accounting tricks to hide behind when there is no real cash to pay the dividend. Today companies are only focus on price.

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