Thursday, March 1, 2012

The Poor Rich Need Dividends?

I was recently reading an article on Yahoo! about bankers and other professionals working in the finance industry becoming frustrated by the lack of blockbuster bonuses being given out by major banks like Goldman Sachs (GS). You can read it below:

Bonus Withdrawl Puts Bankers In Malaise

But, if these "financial professionals" actually followed good financial sense and lived below their means, invested in quality dividend growth stocks and followed a long-term financial plan the loss of income that wasn't promised in the first place (a bonus) wouldn't be as painful. When one's income drops, you could simply stop reinvesting your dividends and temporarily use them for paying day-to-day expenses until you're back on your feet and able to reinvest them. That's one of the strengths of dividends that are rarely talked about: flexibility. Once they land in your brokerage account, you can reinvest them, use them for paying expenses or just let them sit there.

So, do the poor rich need dividends? Maybe. They definitely need a better financial plan.

Thanks for reading.

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