How to Retire on Dividends: Earn a Safe 8%, Leave Your Principal Intact

Name: How to Retire on Dividends: Earn a Safe 8%, Leave Your Principal Intact
SKU: 154539
Availability: InStock

4.3 | 801 ratings

Price: 13.08

Last update: 03-17-2025

About this item

The Fed today is not our friend. Its "low rates forever" policy means we must look elsewhere for yield. Dividend-paying stocks don't help. Blue chips don't pay more than 2% or 3%. On a $1 million portfolio, that's less than $30,000 in annual income. Not enough. There's a better way. Income investing experts Brett Owens and Tom Jacobs show you how to safely double, triple and even quadruple these yields. Turn that 2% that stocks pay into 6%, 7% and even 8% (for $80,000 on that million bucks) without doing anything risky.

In this book, Brett and Tom will take you beyond Wall Street's "blue chip BS" and create a portfolio that can actually generate meaningful income. It's a "no withdrawal portfolio" that relies entirely on dividend income and leaves your principal 100% intact.

Bank 8% income without worrying about interest rates, the Fed, or the economy at large. Learn how to retire on dividends alone and keep your capital 100% intact.

E.D.S.

I learned some actionable concepts in this book.

Reviewed in the United States on January 9, 2020

This book held my attention more than possibly any financial book I've read on the topic of retirement income investing. I liked the book enough to recommend it to some of my friends before I even finished reading the book. I agree with some reviewers who felt this book is a long advertisement for Brett's monthly newsletter, "Contrarian Income Report." However, a risk-free trial subscription to the newsletter is available, so I subscribed after reading the book, because I felt it would take a lot more knowledge and time than I have to find the investments that are currently available at discount prices. The price of a one-year subscription with the initial 1st year special offer did not cost much more than a hard copy of the book. After finishing the book, and subscribing the next day, several buying opportunities were shown in various types of investments as described in the book. Some reviewers complain about the 8% withdrawal rate, but that's not what this book is about. The subtitle indicates 8% returns may be safely EARNED and taken as income WITHOUT WITHDRAWAL of ANY principal. This message is repeated throughout the entire book. The website and the newsletter confirm another money making method described in the book that results from this strategy. When following the strategy of achieving approximately 8% dividend yields, by purchasing CEFs and other investments at a discount, some investments will provide capital gains that may surpass the dividends earned if they are sold when the market takes the price to a premium. The profits from the sale of a security are then reinvested into another one selling at a discount. Although the book could possibly be thorough with 1/2 the pages and still cover everything that was covered, I suppose the repetition helps drive the message home.

It's been a year since I wrote the above review, and decided to add a little more. The book reading is just step #1. Subscribing to Brett's monthly newsletter, Contrarian Income Report, has been the real asset grower for me. After reviewing the Jan 2021 issue, I see his current portfolio holds 19 funds. 5 of those were initially recommended about 5 years ago. Brett continually updates us with the maximum recommended price to pay for these funds, with explanations for his reasoning. He usually mentions his top 5 - 7 favorite picks each month. Some of the holdings I purchased have not only paid excellent dividends, some monthly, but have seen the funds prices increase double digits. I'm talking returns of 12%. 35%, 55%, and 83% within a few months. Are they all this good? Of course not. No more than a Super Bowl quarterback completes every pass and never fumbles. But he's still a winner!

This team is a winner at investing in CEFs. These type funds are probably not an advisable way for the average investor to invest, without adequate knowledge or guidance. A reviewer stated that during the pandemic, the entire portfolio was sold at a loss. That is totally untrue. I was holding and adding to my portfolio based on Brett's advice.
Here's a small quote from the newsletter during the early days of the pandemic.
"1. Stay in the market,
2. Buy the dividend bargains, and
3. Cut our underperformers. ...
...when stocks drop precipitously: “Either run fast, or not at all.” The time to run has passed, and we have held our positions. This is a core tenet of our strategy. We do not run, because we do not have to. Our dividends provide us with income so that we never have to sell shares to preserve capital. ... the fun part of the playbook (step #2): buy the bargains."

Eric Franklin

Eye-opening opportunities in income generating investments

Reviewed in the United States on October 16, 2019

I’m a registered financial adviser and think that this book is an incredibly practical guide to some frequently overlooked corners of the market, containing compelling strategies that individual investors, or boutique adviser shops, can use to provide higher income than is generally acknowledged, with minimal principal risk, through the use of actively managed closed end funds (CEFs) and income-producing stocks. I appreciated how the book lays out an approach to disciplined purchasing based on buying CEFs at a discount to NAV and harvesting gains when those NAVs become inflated and a lower-cost option is available. I also really enjoyed the points made on why these strategies are not employed by the large nations firms (hint: it’s because most of these CEFs are relatively small and cannot be leveraged by the large firms without adversely impacting NAV prices). The book also does a good job discussing why actively managed REIT and bond-funds still yield alpha over their indexed brethren.

There’s a couple additions that would make the book stronger:

1) The examples in the book are so specific and timely that they are frequently outdated. If you want to take action on what’s in the book, you’ll spend significant time researching each space to locate good options. It would therefore be helpful to have a high-quality filtered map of the space that individuals could dig through to see what is most compellingly priced in each area.
2) More thoughts on suggested asset allocations for the portfolios that generate the returns implied by the title. The book touches on this subject, suggesting 15-20 positions, 50% stocks and 50% bond CEFs, but I’d like to go a level deeper than that.

All in all, if you want to explore portfolios that generate much higher cash returns than conventional dividend-paying strategies and ETFs, this is a must read. It will open your eyes to opportunities that can greatly expand your playbook for when you need to transition to living off the proceeds of your investments.

Full disclosure: I was provided with a free review copy of the book and have invested some of my personal funds with Tom Jacobs, whom I have been an acquaintance of, for years.

John Furman

Very Readable and Persuasive!

Reviewed in the United States on November 4, 2019

I've read a lot of investment books and this is one of the more readable: clear prose, helpful charts, and a healthy dose of humor. It argues, in essence, that one can earn a nice income from one's nest egg (upwards of 8% per year) and not dip into principal by investing in a combination of closed-end bond funds and REITs (real estate investment trusts). The key--and the biggest challenge to the lay investor--is figuring out which funds in this category to invest in. I was particularly fascinated by the discussion of closed-end bond funds, which most retail investors don't even know about! The strategy is to buy these at a discount to their NAV (net asset value). Why these funds even trade at a discount to NAV is still a bit of a mystery to me, but apparently that's what happens sometimes. But the authors point out that not all discounted funds are equally attractive (and some are not attractive at all)--so one needs to exercise judgment.

This book is written for the do-it-yourself investor, and I think I will try to implement some of these ideas in my own investing. But when it comes to judging the good discounted closed-end bond funds and good REITs from the bad ones, some folks might feel more comfortable with a little more hand-holding and might benefit from the coaching contained in Owen's newsletter or, better yet, from having Jacobs implement the strategy for them. Either way, a great read!

W. Nixon

Good read

Reviewed in the United States on August 7, 2024

Great advice, I joined their newsletter.

choyoonkyung

Out date for 2024.

Reviewed in the United States on December 26, 2024

The book discusses CEF stocks in comparison to high-dividend ETFs. Although the information from the book is outdated for 2024, it still provided valuable insights about dividend rates for CEF stocks. Additionally, there are many high-dividend ETFs that offer monthly dividend payments.

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