22 Nov 2019
Why is it advisable to reinvest dividends from stocks or interests earned from savings than to withdraw them to use? Dont we invest to earn to fund our lifestyle?
You can invest for growth or for income. If you're investing for growth, you're looking for compounded return. If you're investing for income, you're looking at receiving dividends.
When you're young and your capital is a little low, you need to compound it. When you're a little older, you can start choosing to receive and spend your dividends to achieve financial independence.
We love passive income to fund our lifestyle. Hence, I would ask myself if I have enough passive income to fund my lifestyle. If I have yet to reach that, I would reinvest and continue to build up my portfolio, and have a larger passive income moving forward. Ultimately, to reach Passive Income larger than Lifestyle Expense
There are basically 2 objectives that you can invest for: growth and income.
If you are inve...
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