There’s a piece of retirement advice that sounds wise and is mostly wrong: “You’ll need income, so load up on the highest-dividend stocks you can find.” It feels right. The working paycheck is going to stop someday, so why not own things that pay you?
Here’s the trouble. A dividend isn’t a gift. When a stock or fund pays a dividend, its price drops by exactly that amount — you’re simply being handed your own money back, on someone else’s schedule. And that schedule includes taxes: you owe tax on those dividends in the year they’re paid, whether you needed the cash or not. Chase the fattest yields and you also quietly damage your diversification, crowding into a few corners of the market and walking away from the broad, balanced portfolio that does the real work.
We think about it differently. Your retirement paycheck should come from total return — everything your portfolio earns, from every direction. We like dividends. We like capital gains. We like them from stocks and from bonds. We’ll happily take our return however the market hands it over — and then we create your cash flow on purpose, through rebalancing: trimming the pieces that have grown and using the proceeds to fund your withdrawals. That one move does double duty, quietly selling high and buying low — exactly the discipline that’s so hard to practice on your own.
A quick word on what we don’t do: we don’t pick individual stocks. To us, betting your future on a handful of hand-picked companies is a trip to Las Vegas — occasionally thrilling, reliably a losing game over time. Instead, your money sits in a small set of broadly diversified, low-cost funds — just a few building blocks that together hold thousands of companies and bonds around the world. Simple on the surface, deeply diversified underneath. Less to watch, far more spread out.
And about taxes. If you’re paying them, you made money — that’s a badge of honor, not something to apologize for. We manage taxes carefully: we’re thoughtful about which accounts and which positions we draw from, and the funds we use are built to be tax-efficient inside the fund itself. But we don’t chase losses for sport. You’ve probably heard someone brag about “harvesting tax losses” as though it were a prize. Once in a while it’s a sensible, small tactic — especially in the early years, when one slice of a portfolio happens to be temporarily underwater. But step back: a big stack of losses to “harvest” usually means a portfolio that lost money. That isn’t a trophy. We would far rather you make a lot of money and pay some tax on it than collect a pile of losses to feel clever about later. It’s your net gain, after taxes, that funds your retirement — not the size of your loss bank.
So when you hear the pitch to buy the highest yields “for income,” know that we’re playing a different and more durable game. We build a globally diversified, evidence-based portfolio out of a few sturdy pieces, let it compound, and engineer your paycheck from the whole thing — dividends, gains, and disciplined rebalancing — with an eye on taxes the entire way.
Not gimmicks. Just the whole machine, working for your after-tax wealth.
This article is for educational and informational purposes only and does not constitute investment, tax, or legal advice, nor a recommendation to buy or sell any security or to adopt any investment strategy. All investing involves risk, including the possible loss of principal, and past performance is not a guarantee of future results. Please consult a qualified professional regarding your individual circumstances before making any financial decisions.