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Wow! I usually like your posts scagnt, but this post is
shockingly ignorant.
You have no idea how dividends work.
The dividends are a fixed dollar amount, not a percentage.
When the stock price goes down the percentage actually increases!
(and an individual 401k can invest in P&G stock.)
So im not a series 7 and I dont own any dividend paying stocks. You got me. (learn something new everyday)
But I do know that some "very reliable" blue chips suspended and reduced dividends back in 08' & 01'.
I also know that dividends are not guaranteed unless you own preferred stock.
And technically any 401k can invest in most any security it wants to as long as the Trustee allows it.
But in the real world 99% of 401k plans do not offer individual stocks.
Yes, there are SoloKs that do. But they are still not the majority.
And if the 25 year old we are talking about actually owns a business and has a soloK as an option; at $6k per year they would be much better off with a SEP until they can afford to contribute real money.
And yes, they could do blue-chips in a SEP.
To outperform the income from PI you would need over an 8% return in a 401k.
(and Im glad you like my posts. I usually like your ltc posts... cant say the same thing for LI though)
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