Meager Income

Pay Off Debt, Retire Comfortably on Meager Income, Win the Lottery, Not Necessarily in that Order

Using Dividends to Pay Down Debt

Posted on | September 13, 2011 | No Comments

I really enjoy receiving Dividends!  Every month, as I send my dividends to creditors to pay off my debt, I’m reminded of the following dilemma: Is it better to pay down debt or invest the money and hope for a better return?

According to wikinvest, my portfolio is averaging 3.6% return in dividends alone.  After taxes, I’m probably earning about 2.7%.  My car loan is at 5.79%.  I expect my portfolio to increase in value at least 3% annually long-term.  Although, the last few months have been a different story.  So, i’ve decided that it makes sense for me to stay invested.  I’ve stopped using automatic dividend reinvestment and instead would rather choose when and what to buy with the dividends I receive.  Depending on the current market conditions and stock prices I might just leave them in cash too.

09/08/11 MSFT 32
09/02/11 BA 10.5
08/31/11 NAT 0.04
08/30/11 HCBK 16
08/26/11 C 0.65
08/26/11 Money Market 0.03
08/23/11 FNFG 32

This month I’ll be sending $91.22.

Currently, I do not have a position in HCBK or NAT. I sold HCBK after it went Ex-dividend.  I’m clinging to residual shares of NAT from a few years ago.  I am long MSFT, C, FNFG, BA.


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