Methodolgy
Let’s start with the buckets:
1. Aggressive Growth (high flyers)
2. DGI (Dividend Growth Stocks)
3. Core ETFs
4. Marijuana (also aggressive growth, but I keep my bucket separate)
2. DGI (Dividend Growth Stocks)
3. Core ETFs
4. Marijuana (also aggressive growth, but I keep my bucket separate)
You will need to assign a percentage of your portfolio to each bucket. Your age and risk tolerance will impact these percentages.
Young investors in their 20s have much more time, and these people can typically afford to carry much more risk. The goal for this age would be to save as much as possible and grow capital. Any dividends would be reinvested into each stock they are received from. This will continue until the end game.
30s...in this decade, you will start to convert some of your growth into your Core ETF and DGI buckets. This is where you will start focusing more on your dividend yields.
40s...you are now preparing for the end game. The end game is where you have enough dividends to live off of without selling any of your assets. You hold onto your stocks...these continue to grow and increase over time. Once you decide to retire, you will no longer reinvest your dividends. Instead, you will collect this money to pay your bills and live on. Your assets will still grow, but at a lower rate. In theory, your children will inherit all of this and you will never need to spend a dime of capital. You could also choose to sell some assets in case of an emergency, etc.
30s...in this decade, you will start to convert some of your growth into your Core ETF and DGI buckets. This is where you will start focusing more on your dividend yields.
40s...you are now preparing for the end game. The end game is where you have enough dividends to live off of without selling any of your assets. You hold onto your stocks...these continue to grow and increase over time. Once you decide to retire, you will no longer reinvest your dividends. Instead, you will collect this money to pay your bills and live on. Your assets will still grow, but at a lower rate. In theory, your children will inherit all of this and you will never need to spend a dime of capital. You could also choose to sell some assets in case of an emergency, etc.