Let’s take a clear-eyed view of how stocks are going to pay for your retirement.
Because I think most people have kind of a muddled view.
Indeed, there’s a muddled view about stocks in general. That is to say, the pervasive view is you get some kind of hot tip on a stock, you buy it, it goes up a gazillion dollars, and you have arrived.
All you have to do is quit your job and spend the gazillion dollars a bit at a time … hmmm … until you are done retiring, ah, put delicately; you have passed on and presumably don’t need any more of the gazillion dollars.
I think this is how people keep losing money in the stock market. And how they keep missing their retirement income goals. They just keep trying to hit the jack pot buying stocks that go up. And more often than not this doesn’t work out.
So here’s a question for you. If it’s not working out before you retire, are you still going to be doing this when you retire? And somehow get better results?
I think not.
So let’s look at this another way.
When you are buying stocks, you are really becoming a business owner. So why not buy businesses (stocks) that pay you money, month after month. That money they pay you is called dividends, by the way. And yes – they actually send you a check for your share of the profits. A check as in real money.
And while we’re at it, why not buy businesses (stocks) that are so profitable and solid that they keep making more money every year. And so they keep giving you, the business owner, bigger dividends every year. As in they keep sending you bigger checks.
That way you would be getting checks every month (or quarter) and the checks would keep going up over time to keep up with inflation. Maybe even beat inflation.
Now that’s a bunch of income streams someone might be able to retire on. And actually visualize.
And you’re in good company here. This is how Warren Buffet thinks. For example, his company Berkshire Hathaway get’s millions of dollars in dividend checks from Coca-Cola. Every year. And growing.
So why not start thinking like that now?
Why not start building your stock portfolio with those retirement checks in mind? So that by the time you are ready to retire you have all of these income streams in place and they are paying you on a regular basis.
I’m going to explore this with you in future posts. We’re going to start looking at stocks from this perspective. And we’re going to put together a dream team of stocks and project their possible dividends out into the future, along with inflation.
We’re going to see what kind of retirement checks they might be paying you.
And we’re going to get as real and clear-eyed about this as possible. With specific stocks, and their specific dividends, and their most probable dividend increases. Year by year we are going to project this out.
So stay tuned to future posts as we build our retirement income dream team. And start listing out all of those checks — that could be made out to you.
To your health and prosperity – John
P.S. Just note that there are no guarantees about predicting the future, but putting together our most clear-eyed specific plan, with specific stocks, and their specific dividends, and their most probable dividend increases right now sure would seem to increase our odds of success.