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A comment on Yield curve is blaring loudest recession warning since 2007. Parent comment

Re:Yield curve is blaring loudest recession warning since 2007 by dharma1 on Monday August 05, 2019 @02:35PM (#20616971)
This depends completely on each individual's circumstances (level of income, your resident country's tax regime/pension rules) but I think many HN readers are in a fortunate position to be able to build up sizeable enough pension pot in 15-20 years, which at retirement can provide a modest income based on 4% yield - without touching the principal.
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Re:Yield curve is blaring loudest recession warning since 2007 by throw0101a on Monday August 05, 2019 @03:15PM (#20617604)
> ... which at retirement can provide a modest income based on 4% yield - without touching the principal.

You're doing yourself a financial disservice if you focus on dividends. Total returns are more important:

* https://www.youtube.com/watch?v=UpXI_Vd51dA

There is no financial difference between have $1000 in stock and $40 in cash dividends, and having the stock go up to $1040 and you then selling $40 dollars' worth of principal.

Treating the $1000+$40 as "better" than $1040 is a form of mental accounting:

* https://en.wikipedia.org/wiki/Mental_accounting

Do a search for "dividend myths".

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Re:Yield curve is blaring loudest recession warning since 2007 by dharma1 on Monday August 05, 2019 @03:28PM (#20617796)
true, though from a tax POV they are treated differently in many countries
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Re:Yield curve is blaring loudest recession warning since 2007 by throw0101a on Wednesday August 07, 2019 @07:47AM (#20633802)
Which would only apply in taxable accounts though.

The majority of people probably are using tax-sheltered accounts and are primarily saving for retirement, or their kid's education.

If anyone can max out all of those, and pay their cost of living, they're (a) doing quite well for themselves, and (b) probably a small portion of the population.

The advice to not focus on dividends but on total returns is geared toward the general public, who probably don't want to get into the minutiae of tax laws. :)

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Re:Yield curve is blaring loudest recession warning since 2007 by dharma1 on Friday August 09, 2019 @07:20AM (#20653242)
Ah, I fully agree here. The comment I made about 4% yield was once you are at retirement and want a low volatility portfolio, not on your way there.

Maxing out your annual pension allowance - as I said it depends on your personal circumstances, however I think many people on HN mid/late career will have no difficulty there

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