If you own any real estate investment trusts (REITs), make sure you forward this article along to your tax advisor!

Historically, REIT distributions have been considered nonqualified dividends by the IRS. This means they usually get taxed at your regular income tax rate.

However, REIT investors now benefit from the same tax break that “pass through” businesses receive. As a general rule, REIT investors are now allowed to deduct 20% of their REIT dividend income.

(This tax update is adapted from our new book How to Retire on Dividends: Earn a Safe 8%, Leave Your Principal Intact. You can grab your copy here.)… Read more

At my Contrarian Income Report service, we hunt down huge dividends on the regular. Right now, our portfolio is knocking out a 6.9% average payout from 16 real estate investment trusts (REITs), stocks and closed-end funds (CEFs).

We’ve grabbed serious price gains, too: since launch in 2015, CIR has delivered a 12.5% annualized return. Not bad for a set of “boring” income plays!

Beyond Big Yields

Even though our CIR club is “high yields only,” I get that many folks look to stocks with low (or no) dividends for gains, too: names like Apple (AAPL), whose 1% yield won’t get it within a mile of Contrarian Income Report.… Read more

A proven recession indicator just went off again—only nine months after its last warning. And how have the markets and the media responded?

Crickets.

The funny thing is that this isn’t a bad news story for us. Because there’s a way we can profit from this signal of tougher times to come. I know that sounds counterintuitive, but stick with me for a moment and I’ll introduce you to a fund that protects—and actually grows—its 6.6% income stream when markets panic.

Before we get to that, let’s look at that recession indicator and tease out what it’s telling us.… Read more

If you want to live off dividends in retirement, you can’t depend on “blue-chip stocks.” They simply haven’t paid enough yield for years:

Even High-Yield Savings Accounts Start to Look Good at These Levels

Source: Multpl.com

The S&P 500’s yield recently hit 1.7%. Think about it in “retirement spending” terms. If you took an entire million-dollar nest egg and put it in the S&P 500, you’d be looking at just $17,000 in dividend income per year. If you have even less to invest, like $500,000, that’s just $8,500 a year—several thousands of dollars below the U.S. Department of Health & Human Services’ poverty guideline of $12,760!… Read more

There’s a way you can buy into today’s healthy real estate market without paying full price. In fact, you can get in for a lot less—I’m talking 16% below market value.

This may sound impossible, but it’s easy to do with closed-end funds (CEFs). That’s because there’s a CEF that invests only in real estate, and its market price is actually 16% lower than the value of its portfolio of assets. There’s much more to this fund, too. Not only does it hold a diversified real estate portfolio, but it also pays out a 5.9% dividend that’s risen 73% in the last decade. … Read more

“Efficient market” believers are adorable, but they are also wrong. It is possible to make 15% to 19% per year, every year, from perfectly safe dividend stocks.

In a moment, I’ll outline this little-known yet simple formula. But first, let’s talk about what not to do–just in case you’re following bad advice today!

“Buy and hope” investing is what most of your peers do. They purchase shares and root for them to appreciate in price. Unfortunately, they have no specific plan detailing how they are going to profit from their stocks.

Inevitably, pullbacks happen, and this is their undoing. They get scared and sell, often near lows.… Read more

Today I’m going to show you how to grab two growing income streams—in just one buy. Plus, we’re going to bank double-digit price profits to boot.

The strategy? Simple: we’re buying dividend-paying stocks poised to spin off one of their businesses into a brand new dividend-paying stock. The result? Two or more quarterly dividends where there used to be just one.

Two other things you should know: our “new” dividend(s) will likely grow even faster than our original payout! And we won’t have to do anything to get this extra cash.

The Profit Power of “Dividend Splits” 

The dividend-growth wave this “dividend split” can unleash is massive.… Read more

With coronavirus spreading and China’s economy being shut off from the rest of the world, you’re right to ask one (or both) of the following questions:

Is this rally justifiable? Is it still a good time to buy in?  

Profits (and Dividends), Not Fear

Here’s the good news: this market is rising on fundamentals, and ignoring overwrought media headlines that will eventually be forgotten. So yes, now is a good time to buy in. And contrary to what most people think, there’s still a good shot at high (I’m talking 7.8%+) dividends out there for us, too. Those payouts are in a corner of the market too many people never think to check.… Read more

The blue-chip corporations that make up the Dividend Aristocrats are a tribute to the power of dividends. They have raised their payouts for 25 straight years or more and, most importantly, made many of their investors quite wealthy in the process.

Unfortunately for us, everyone already knows these firms are great. And as a result, their stocks are now overpriced and these well-run firms are producing mere also-ran returns. Check out the purple line below, which shows the Aristocrats trailing the popular Dow Jones and S&P 500 indices:

The Aristocrats Even Make the 124-Year-Old Dow Look Spry!

We can do better, and I’ll show you how in a moment.… Read more

If you’re like most income investors, you stop in your tracks when you spot a massive payout—like 16% or more. A yield like that means you’re doubling the market’s historical annual return in dividends alone.

What’s not to like?

Too bad dividends that big are almost always warning signs. That’s the case with the two stocks we’re going to dive into today. You’ll want to avoid their “siren song” 16%+ payouts now—or sell if they’re taking up space in your portfolio.

When the Market and Reality Part Ways

This story actually starts more than a decade ago—in the middle of the collapse of 2008.… Read more