Part 5/9:
- Dividend History: Understanding how consistently a company has paid dividends provides insight into management’s commitment to returning value to shareholders.
Free cash flow stands out as the most significant metric, influencing the sustainability of dividends and, ultimately, your investment’s success.
Strategies for Living Off Dividends
Transitioning to living off dividends involves careful planning and understanding how inflation impacts purchasing power. For instance, if my monthly expenses are at $4,000, with inflation maintained at a conservative 2% over 30 years, I would need a dividend portfolio capable of generating significantly higher future cash flows.