... is a TERRIBLE idea folks. and one that needs to die already.
financial academics like to preach theory. one theory that is perpetually tossed around re: income generation is that selling shares of a stock is the same as receiving a cash distribution (a dividend). this is WRONG. the main problem being--like a lot of things in life--financial theory doesn't always apply perfectly in the real world of financial markets
have a conversation with someone who sold shares during the last couple of recessions (2000-2002, 2008-2009) and you'll have an idea as to why this theory doesn't play out very well in practice, and can cause a lot of undue financial pain and stress. if your annual income is reliant on selling shares every year, you are often FORCED to sell during depressed valuation levels to create said income, and this will lead to a multitude of problems/mistakes/stress/underperformance. do not go down this road.
if your goal is to create an ever growing income stream that beats the pants off of inflation, look no further than your shareholder friendly dividend aristocrats/champions. there are dozens and dozens of companies who have been through every business cycle imaginable, and have literally raised their nominal dividend payments: every. single. year. going back 35, 45, 55+ years .... folks who lived through 2008 with a DGI (dividend growth) portfolio saw their income RISE during both 2008, and 2009 (and every year since). Compare this to the losers who were selling shares at the bottom in 2008 and 2009 to create income, and the argument becomes quite silly.
IGNORE THE POORLY TRAINED ACADEMICS: DO NOT SELL SHARES TO CREATE INCOME. THERE ARE VASTLY BETTER STRATEGIES.
Submitted August 28, 2017 at 05:23PM by asdfasdf12334 http://ift.tt/2wNc1Si
