trey on Nostr: FIRE BTC Issue 13 just dropped. Here's a short summary 👇 Many personal finance ...
FIRE BTC Issue 13 just dropped. Here's a short summary 👇
Many personal finance bros on X swear by dividend-paying stocks, claiming they offer hassle-free cash flow for financial independence. But while dividends can seem appealing, they may actually hinder your progress toward FIRE. Here’s why:
Dividends don’t create new wealth—they simply shift value from the company to you. When a dividend is paid, the stock price drops by the same amount, leaving your total investment value unchanged. Worse, dividends in taxable accounts come with a tax burden, reducing the compounding power of your portfolio.
This inefficiency often means dividend-focused strategies yield lower total returns compared to growth-oriented investments. For example, over the last five years, $SCHD (a dividend ETF) returned 69% compared to $VTI's 93%. That difference translates to years of additional saving needed to reach your FIRE number.
And for those who criticize Bitcoin for not paying dividends: they’re missing the point. Bitcoin isn’t designed to throw off dividends—it’s like "cash money," offering returns through increased purchasing power over time. Whether through Bitcoin or growth-focused ETFs, you can create income by strategically selling small portions, benefiting from greater compounding and tax efficiency.
The key to reaching FIRE isn’t how your returns are delivered but how they compound. Dividends may feel like an easy win, but they can come at the cost of longer timelines to financial independence. Focus on assets with higher total returns during the accumulation phase and let compounding do the heavy lifting.
And, of course, for that purpose, bitcoin is the best.
You can read the post at the link below, and don't forget to subscribe!
https://firebtc.substack.com/p/coal-in-your-stocking
Many personal finance bros on X swear by dividend-paying stocks, claiming they offer hassle-free cash flow for financial independence. But while dividends can seem appealing, they may actually hinder your progress toward FIRE. Here’s why:
Dividends don’t create new wealth—they simply shift value from the company to you. When a dividend is paid, the stock price drops by the same amount, leaving your total investment value unchanged. Worse, dividends in taxable accounts come with a tax burden, reducing the compounding power of your portfolio.
This inefficiency often means dividend-focused strategies yield lower total returns compared to growth-oriented investments. For example, over the last five years, $SCHD (a dividend ETF) returned 69% compared to $VTI's 93%. That difference translates to years of additional saving needed to reach your FIRE number.
And for those who criticize Bitcoin for not paying dividends: they’re missing the point. Bitcoin isn’t designed to throw off dividends—it’s like "cash money," offering returns through increased purchasing power over time. Whether through Bitcoin or growth-focused ETFs, you can create income by strategically selling small portions, benefiting from greater compounding and tax efficiency.
The key to reaching FIRE isn’t how your returns are delivered but how they compound. Dividends may feel like an easy win, but they can come at the cost of longer timelines to financial independence. Focus on assets with higher total returns during the accumulation phase and let compounding do the heavy lifting.
And, of course, for that purpose, bitcoin is the best.
You can read the post at the link below, and don't forget to subscribe!
https://firebtc.substack.com/p/coal-in-your-stocking