Many people look to buy stocks that pay dividends because they think this will provide income in retirement. The author Dr. Kim a respected economist argues that dividends are not the way to get income from stocks. In examples he shows that selling stocks is preferable to income through dividends.
Dividends are taxed at a rate of usually 20% while the profit from selling stocks is taxed at the capital gains rate which is considerably lower. So after taxes selling stocks for the same amount as the dividends would generate more income. Furthermore stocks can be sold for income any time while dividends are only available at certain time. So selling stocks is more flexible and able to provide income when you need it. All things considered selling stocks for income is clearly better than trying to find stocks that pay dividends.
Read the full article here:
How To Make Homemade Dividends To Reduce Your Taxes
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