Here's Why You Might Want to Make $0 in Dividend Income (for Now)
As great as it sounds to get paid every quarter from your dividend-paying stocks, in the long run, it might be even better if you opt to make a grand total of zero. In fact, it almost certainly will be better for your portfolio's value if you refuse to take a penny in dividends before you start to draw on your portfolio when you retire. And that means if you're spending your dividend income on frivolous things today, you'll be in a much worse spot down the line.
If it sounds confusing how taking less money today could ultimately lead to getting more value, read on, as you're about to learn one of the most important tricks for compounding your wealth.
Let's take a look at Omega Healthcare Investors, (NYSE: OHI) a real estate investment trust (REIT) that operates assisted living facilities and skilled nursing properties. At the moment, its forward dividend yield is above 8.8%, and over the last 10 years, its dividend grew by more than 59.5%. This stock is a great example of why you should prefer to make no dividend income most of the time, and this chart explains why.
Source Fool.com
