I was recently reading an article on Yahoo! About bankers and other professionals working in the finance industry becoming frustrated by the lack of blockbuster bonuses being given out by major banks like Goldman Sachs (GS) and other big financial businesses. You can read it below:
Bonus Withdrawal Puts Bankers in “Malaise”
But, if these “financial professionals” actually followed good financial sense and lived below their means, invested in quality dividend growth stocks and followed a long-term financial plan the loss of income that wasn’t promised in the first place (A bonus) wouldn’t be as painful. I have to be honest, I sometimes fall for this trap too, every now and then I have to check myself and stay focus. Nothing is wrong with enjoying life, but we have to evaluate what is really a need or want, especially when money can be tight in the future.
When your income drops, you could simply stop reinvesting your dividends and temporarily use them for paying day-to-day expenses until you’re back on your feet and able to reinvest them. That’s one of the strengths of dividends that are rarely talked about: flexibility. Once they land in your brokerage account, you can reinvest them, use them for paying expenses or just let them sit there.
So, do the poor rich need dividends? Maybe. They definitely need a better financial plan.
Work Hard or Work Smart?