[Chad]

The Income Factory by Steven Bavaria- can someone please fill me in on the downsides of this style of investing? I’m assuming higher risk and lower growth? I have a coworker who is retiring this year and keeps talking to me about it and how the dividends are a sure 10%+ per year and doesn’t understand why everyone isn’t doing it. Ive only gotten through the beginning of the audio book but I know the subject will come up again this week so thought I’d check in with this crowd and see if he’s missing anything. Thanks

[Frank]

What are the upsides? Do you get to go to Oktoberfest? According to the website, the Income Factory is an “attitude”. What the hell is that supposed to mean? Thinking and growing rich with universal manifesting from Munich?

It’s a tax magnet is the main problem. That and elevating dividends over total returns. It’s fixation on closed end funds means you are fiddling with leverage.

But don’t you think if it was a good idea there would already be widespread adoption? The kiss of death is that the shyster lives in Boca Raton, which is pretty much the stupid investing idea and fraud capital of the country.

NEVER USE ANY INVESTMENT, METHOD, OR INFORMATION THAT ORIGINATES IN BOCA RATON, FLORIDA. PEOPLE LIKE TO HIDE THERE BECAUSE THEY DON’T GET PROSECUTED (MUCH).

[Christopher]

This is basically just dividend investing (but with a catchy name and a book, because it’s lucrative enough that the author decided to write a book to sell…).

Downsides are mainly 1) tax liability and 2) lack of exposure to non-dividend paying stocks (like Berkshire Hathaway or Amazon, among many many others).

It’s seductive because dividends are thought of as a magical money faucet that produce money from nowhere, which is entirely ridiculous; dividends simply come from reductions in the share price – it’s no different from just selling a stock when you want a dividend.

Read on: Reinvesting money after leaving financial advisor?

[Bill]

Dividends aren’t extra earnings. Each time dividend is issued, the value goes down that exact same amount. If you withdraw 10% per year, you have about a 100% chance of running out of money in retirement.

[Rick]

Everything good is over done. Some dividends are good. A focus on dividends is over done.

There. Is. No. Free. Lunch.

Dividends included.

I like meeting a big part of my travel abroad budget met by dividends. I don’t focus on making it happen. But that it happens is low effort nice.

But you know what else is nice? My NVDA going clown circus up up up. And my AMZN up and another up. And my AVUS up.

So dividends are nice but not at all worth the hype social media gives it.

[Michael]

I’m retired and use the approach. The growth crowd does not like it even though it is just another side of the same coin. Read the first chapter where he discussed how you can grow your portfolio using high-yield the same way as growth.

[Author]

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