Dividend Investing

Taylor365

Is it all it's cracked up to be?

I follow blogs such as:

http://www.dividendmantra.com/
http://www.bitesizedincome.com/
http://www.nomorewaffles.com/

Doing the numbers myself though it seems either too good to be true or a very long game to play. Correct me if I'm wrong as I'm no pro at this :P

E.G.:

Smurfit Kappa Group €2000 worth bought @ 27.80
72 shares roughly.
Pay dividends twice during the year held @ 0.15 and 0.40 a share.
Equates to €39.60 paid in dividends.

Minus the costs which are €40 commission and €20 stamp duty (Taken from Cambell O Conor website).

39.60-60= €20.40 loss for the first year

35(est.)-20.40= €14.60 profit for the second year.

32(est.)-0= €32 profit for the third year

I know there are a lot more lucrative shares out there but i just picked Smurfit as it's well known and has a somewhat steady history of dividends.

Do i have the right of it or am i way off the mark?

TheFin

I'm not a pro either. a) don't forget you will have to pay tax on dividends and b) long term better to just set up dividend to be reinvested into shares i.e. compound your return

Taylor365

TheFin wrote: »

I'm not a pro either. a) don't forget you will have to pay tax on dividends and b) long term better to just set up dividend to be reinvested into shares i.e. compound your return

DWT @ 20%?

So it would work out:

1st year: 33-60= €27 loss

2nd Year: 29.16-27= €2.16 profit

3rd year: €26.60 profit

So after 3 years, you have +1 share :pac:

TheFin

Check out web at investorguide.com/article/11794/advantages-and-disadvantages-of-dividend-reinvestment-plans-igu/