Thanks to a face-to-face Dr Wealth event last Saturday, I've forgotten how much I enjoyed speaking to a big crowd. Talking to an audience gives me a "high", and sometimes I get "high" and disable my filters. So occasionally, I make utterances that might be highly controversial or offensive. For those utterances, I hope that history will never remember them, but sometimes my words resonate with the audience, and I get a spontaneous ovation.
One utterance that worked well with the crowd is that "Getting dividends is mental wellness." I had a crowd of Millenials, Gen X and Baby Boomers, so out of the blue, I simply decided to critique Gen Z's obsession with mental wellness because Gen Z's obsession with mental wellness distinguishes Gen Z from older folks. There are very few Gen Zs to offend in an investment talk on a Saturday afternoon. When discussing mental wellness, I suddenly uttered that getting dividends is a form of mental wellness, and the crowd erupted in applause.
This is all unscripted because it was a spontaneous Q&A, and I've since calmed down, so it's time to critically examine this idea.
For a while, I've always been very amused with how Buddhism entered the West. It did not arrive as a religion but as a psychology because white people, who were becoming more individualistic and less religious, began to discard religious dogma for the inner tranquillity of meditation.
Similarly, I can imagine what Gen Z have to deal with today. Social media is full of falsehoods like "girl maths" and weirdoes proclaiming that dividends investing is dangerous. If Gen Z wishes to approach investing as a field of study and means of wealth accumulation, like my students, they would have to deal with quite a lot of information. For example, they need to know what a standard deviation is. As I've discussed with many groups, this will always benefit INTJs and ISTJs more than any other personality type.
From the quantitative perspective, dividends investing has many competitors. Even AUM-based advisors want to wean you off dividends for their mean-variance-optimised ETF portfolios. If you use maximum drawdown over March 2020, dividends investing is dangerous. If you use Beta, it's safer than some market indices. Dividend investing cannot win in every part of the market cycle.
But from a self-help perspective, dividends rule.
Dividends put money in your bank account even if you are in a coma or have negligible emotional intelligence. When I was pretty "high" on Saturday, I read many self-help books over the years, like How to Win Friends and Influence People, and the Power of Positive Thinking. Still, only when I started getting dividends was I able to attain the peace of mind and happiness I craved because I had the freedom to FIRE a toxic employer.
Of course, every idea has its limits.
I hope I don't come across as dismissive of some Gen Zs who really have clinical mental issues, dividends can't solve a mental illness directly, but they can pay for therapy and medication. Also, many Gen Z struggles with regular employment as they are young, so their first dividend is still quite far away.
For Gen Z, we need to develop something more relatable.
I play Baldur's Gate 3 on GeForce Now and pay about $9 monthly for 10 hours of priority gaming. If you visit any page on the Straits Times Index ETF the current dividend yield is 4.13%.
We take $9 x 12 months and divide by 0.0413. We get $2,615. By setting aside $2,615 to buy Singapore's largest blue chip companies, you effectively get a perpetually "free" essential subscription to GeForce Now, which is covered by dividends payouts.
I'm glad face-to-face seminars are finally back.
Hope to see more readers at our next event.
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