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    Default explain dividends

    guys
    im sure ill get lots of replies here

    im tinkering in a few shares blindly

    dividends - i know they get paid once or twice a year, but is it like pro rata based, surely you cant just buy a shipload of shares & get paid the dividend not long after?

    and, being a poor old pensioner, do i have to declare the profit ect, 100% franked, any extra bits i should know

    cheers
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    Quote Originally Posted by Philquad View Post
    guys
    im sure ill get lots of replies here

    im tinkering in a few shares blindly

    dividends - i know they get paid once or twice a year, but is it like pro rata based, surely you cant just buy a shipload of shares & get paid the dividend not long after?

    and, being a poor old pensioner, do i have to declare the profit ect, 100% franked, any extra bits i should know

    cheers
    Here is an excellent site to find your dividend stocks.


    If they are fully franked you technically only pay a portion of tax on dividends because the company is already paying the 'company tax' portion for you.
    If you are below the corporate tax rate the dividend is then technically tax free.

    There is no pro rata, you need to have purchased before the ex-dividend date to get the dividend.
    More here:
    Last edited by Uncle Fester; 23-10-17 at 02:33 PM.
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    I had some 300 shares with the NRMA and I used to receive about $40 a year as a dividend but being such a paltry sum, I never told Centrelink nor Paid Tax on the dividend.
    However I dont believe I got away with anything as I am sure these details would have been passed onto Tax Office along with everything else and had I been receiving sizeable amounts, I am sure the Tax Man would have come knocking for their share!!!
    However its your responsibility find out if you are liable to pay any Tax's that may be due.
    I stand unequivicably behind everything I say , I just dont ever remember saying it !!

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    Quote Originally Posted by gordon_s1942 View Post
    I had some 300 shares with the NRMA and I used to receive about $40 a year as a dividend but being such a paltry sum, I never told Centrelink nor Paid Tax on the dividend. However I dont believe I got away with anything as I am sure these details would have been passed onto Tax Office along with everything else and had I been receiving sizeable amounts, I am sure the Tax Man would have come knocking for their share!!! However its your responsibility find out if you are liable to pay any Tax's that may be due.
    Two things here.
    - If you are receiving some sort of pension your dividend income is considered as deeming income. It will not effect your pension, so go for as much dividends you can get, even if it is well above the 3-4.5 whatever % Centrelink calculates, it is all yours
    You should tell Centrelink that you have shares though.
    - Pensioner Taxfree threshold is nearly 29k if you have a partner and 32k if you are single.
    Last edited by Uncle Fester; 23-10-17 at 03:50 PM.
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    I apologise but I remember reading on the letter each year advising of what the dividend amount was said that the shares had been 'Fully Franked'.
    I stand unequivicably behind everything I say , I just dont ever remember saying it !!

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    Quote Originally Posted by nomeat View Post
    Here is an excellent site to find your dividend stocks.


    If they are fully franked you technically only pay a portion of tax on dividends because the company is already paying the 'company tax' portion for you.
    If you are below the corporate tax rate the dividend is then technically tax free.

    There is no pro rata, you need to have purchased before the ex-dividend date to get the dividend.
    More here:
    so telstra's last ex dividend date was 7th september
    i bought some in october, if they pay again in say 6 months, am i in? or i wont get any until the following september?
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    Pick horse, bet, get lucky, collect dividend....
    The fact that there's a highway to hell and a stairway to heaven says a lot about the anticipated traffic flow.

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    Quote Originally Posted by Philquad View Post
    so telstra's last ex dividend date was 7th september
    i bought some in october, if they pay again in say 6 months, am i in? or i wont get any until the following september?
    You are in for the next six monthly payout.
    You must hold the shares until at least the next ex dividend date.

    Keep in mind that Telstra have just announced a hefty reduction of their dividend rate.
    It is still better than many others but will drop from 31c to 22c in 2018.
    Last edited by Uncle Fester; 23-10-17 at 05:08 PM.
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    Quote Originally Posted by gordon_s1942 View Post
    I apologise but I remember reading on the letter each year advising of what the dividend amount was said that the shares had been 'Fully Franked'.
    That means the shares were taxed at the marginal company rate; which is way above most individuals tax rate before you received the dividend & a low income earner would likely get those franking credits back.
    Cheers, Tiny
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    i still seem to be missing something sorry

    can you buy shares that pay a good dividend not long before they pay? seems too easy, how long do you need to hold the shares before you can get the dividend? basicly my question

    & telstra @ 22c $100/$3.50 x .22 = 6% is far better than my lousy 3% at the bank
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    Quote Originally Posted by Philquad View Post
    i still seem to be missing something sorry

    can you buy shares that pay a good dividend not long before they pay? seems too easy, how long do you need to hold the shares before you can get the dividend? basicly my question

    & telstra @ 22c $100/$3.50 x .22 = 6% is far better than my lousy 3% at the bank
    see post #8, very accurately described by nomeat.
    Cheers, Tiny
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    common tiny, treat me like a p2 with dos

    surely i can buy a shitload of telstra shares @ $3.50 just before they pay a dividend & take that $ ? or can i
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    Quote Originally Posted by Philquad View Post
    common tiny, treat me like a p2 with dos

    surely i can buy a shitload of telstra shares @ $3.50 just before they pay a dividend & take that $ ? or can i
    Absolutely. I just did with REX. Tomorrow is the ex, I bought last Thursday.

    The deal is that the share price usually drops after the ex about the amount you get in dividend.
    So for those who want to snap up a bargain and dont give a .... about dividends, that's the time to buy and if they are lucky, the share price wiggles up again in a week or two and they sell.
    Telstra, not so sure about the lucky bit.
    Last edited by Uncle Fester; 23-10-17 at 08:16 PM.
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    Quote Originally Posted by Philquad View Post
    i still seem to be missing something sorry

    can you buy shares that pay a good dividend not long before they pay? seems too easy, how long do you need to hold the shares before you can get the dividend? basicly my question

    & telstra @ 22c $100/$3.50 x .22 = 6% is far better than my lousy 3% at the bank

    Noting what Nomeat and Tiny have said, I'm not sure that's correct.
    If you watch the ASX from minute to minute you or day to day, you will find that Dividends are paid on who is holding the stock when it goes ex-dividend.
    That's the very reason why you will notice stocks drop in price by roughly the dividend paid.
    You could also short your position is options, but it's not like everybody else knows the stock is going ex-div so unless you're betting that the company pays out zilch and the stock plummets, you'll cash in on the misery. Write some naked options before a big win and you might get yourself a securities investigation

    But it already looks like you're on top of the value of shares.
    The share price (which should) reflect the dividend it pays or that people think it will pay.

    Bottom line is that it gambling with short odds but less security and a lot more attention from the ATO

    One of the best pieces of advice on investing in stock markets I ever heard came from Rene Rivkin.
    Invest in what you know and avoid what you don't. So if you know nothing about banking but know the telecommunications industry, then you would do better to avoid banking stocks.


    If a stock is going up in price and you don't know why, then you should learn why very quickly or get out very quickly.

    It is better to sell a stock and regret the price going up, than not selling it and watching it go down.
    This flows out of setting share price limits.....

    Lets say you buy a stock at $5. Assuming your an idiot and you know nothing about the company.
    If you were watching the stock, at what "prices" do you sell?

    The price drops tomorrow and you check your portfolio and it has dropped to $4? Do you sell? Why not?
    Next day it drops to $3. Have you cut your losses and sold yet?
    Next day it's $2. Have you learn your lesson yet?

    OK, you sold out at $2. The stock is now $1, do you feel better?
    Good, because the next day it jumps to $6. How do you feel now? Bad? Well this is the gamblers fallacy. If the stock had gone to $0 you would have lost everything.
    The stock is now $6... do you buy in?
    No? and the stock goes to $10. Do you buy in now? Don't do it !!!
    The stock is now $20 Do you buy in? Hell no.

    Some stock market calculus...
    If d$/dt is large, either positive or negative (large changes in short periods mean trouble and lots of it)


    OK... reset the clock ... You buy in at $5, don't check your stock for a few days. When you do, you see it at $10. Do you sell? Why not?
    You're excited, next day you see it is $20. Do you sell now? Why not? There is no way you would buy in at this point in time, so why the hell would you hold onto this stock unless you knew exactly why the price moved so much.

    Given the same circumstance, the only difference is you're wealth. So why then is your financial plan different?
    Set your limits or rather expectations. If a stock exceeds your expectations, either good or bad. Get out and get out now..

    If your stock went to $7 by the end of the week, would you keep it? That's a 20% gain. Sell that bastard, pay the capital gains tax and rethink your position.
    That gain was unrealistic in real world terms. So either the stock was undervalued (and you got lucky) or it is now over valued, in which case you also got lucky.

    If you don't know which, then panic and get out now with the loot!

    But lets say your balls are bigger than your wallet. You want to double down. Hell the stock could gain another 20% next week! (can you hear the stupidity in that statement?)
    OK, lets assume you sold the stock and you're holding the cash in your hand right now. Not withstanding the cost of the trading, Would you buy in now knowing the stock had already jumped 20% over the last week?

    The difference between gambling and investing is that you think there is a difference when you're "investing".

    Imagine you had put the same money into a poker machine and it paid out 20% more than you put in. Do you re-invest the entire amount in your hand because "the machine is paying out?" Of course not, you have no idea what the machine will do next.

    What if I could tell you what the first reel of a four reel machine will do for the next 10 spins? Ah! Some investor information.
    You still have no idea what the other three reels will do, but you're odds are "better than chance".
    That is investing! You still have gambling involved, but because you know something about your company (the machine) you have a 'better' chance, but still have plenty of risk.

    Back to Ex-dividend price .... The price drop clearly reflects information about that stock.
    Some hindsight. Go back and look at all ASX stocks for 13 months an when they pay dividends. You'll be able to see speculation about the dividend price.
    Though don't think this information is anything special, everybody knows what the dividend will be and with the noise removed you can see that sawtooth in a share price graph.

    ----

    Even after all that. If you look through the share price graphs and you see a big d$/dt (large sharp changes in price) then investigate why.
    An easy one to find is a sharp rise because of a share price offer. A buy out or take over. The first offer is often never the last. (though sometimes it is).
    A company will make an offer to buy a stock. The price will jump to the offer price. If you know the players and know there will be serious effort to buy the company. If you're holding that stock, the second offer will come in and the stock price will jump again. Easy money often without fees.
    You can double down, but if you've already made anything over your 6% in less than a year. Then you're already in front, time to stop and smell the roses.


    Greed feels good, so does Cocaine.
    Stopping either "feels" wrong.
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    I felt it my duty to warn Philquad that buying stocks shortly before ex-dividend date comes with the caveat that the share price usually drops afterwards as he thought it would be easy to make quick money that way.

    I also said if the share price wriggles back up again then he would be lucky, meaning that it is a gamble and added that my personal view with Telstra is not so positive ATM. The heavy drop in dividend payout will scare quite a few investors as it is a sure sign that they are in some trouble and while the share price is relatively cheap, I would be personally waiting until I see confirmed signs of new technology introduced to crush the competition. Because Telstra is a bureaucratic dinosaur I see them lagging behind for now and the share price could fall further. That is my personal opinion only.

    Somebody who invests mainly for dividends (and that are a lot of Australians) will not worry too much about short or medium term share price drops as these big companies have cycles that will eventually bring them back again. Telstra looks cheap and in a couple of years (if we all still exist) they could be the big player again, they still are they just need to get their act right. Things can move fast in the telecommunication industry.

    Trash, what you wrote does not apply to Philquad's strategy and you are only creating confusion.
    Long term INVESTORS for dividends don't worry too much about potential capital gain losses or missed opportunities.

    You need to worry if you TRADE, particularly with new companies and penny stocks where you get those huge swings and high risks you are talking about, and that costs a lot of nerves and requires a lot of experience and mostly discipline. Most fail here !

    The share market is always a gamble but just going for dividends on companies as big as Telstra is about as risky as putting your money on a Bank but pays far more ATM.
    Of course Telstra can still go broke but so can a Bank or a Financial crisis can wipe out almost everything.

    There is no 100% safe investment strategy
    That is why you bet on many horses, diversify shares, realestate, physically own precious metals, even cans of baked beans for WW3....some might add a gun to protect the beans
    Last edited by Uncle Fester; 24-10-17 at 12:34 PM.
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    I hear that mattresses are a good investment strategy. Minimal risk o loss, and NO net gains.
    I'm out of my mind, but feel free to leave a message...

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    Quote Originally Posted by lsemmens View Post
    I hear that mattresses are a good investment strategy. Minimal risk o loss, and NO net gains.
    That is where robbers and governments always look first.
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    If you're thinking of putting your money in the bank you're better off just buying bank shares and attaining the dividends from that. Banks will always look after their shareholders before their customers. LOL

    People might ask why does the share price fall after a dividend is paid.

    It's because the company is getting smaller by giving away part of its capital.

    That loss is taken off its market capital which is reflected in the share price.

    So the share price will always fall by the same level as the dividend - but frequently falls even more because of shorters, tax avoidists and other capital rapists.

    Also... You have to hold the shares for more than 46 days. Otherwise you forfeit the franking credits.

    One last thing. When it comes to this sort of investment - always talk to a tax accountant.

    Dividend income is great - but it's added to your income - which then affects your tax liabilities and/or Govt pensions... if you have any.
    Last edited by exited; 24-10-17 at 01:54 PM.

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    great input guys
    this is the part i was looking for, "Also... You have to hold the shares for more than 46 days. Otherwise you forfeit the franking credits"

    i only threw 5g in, either that or winx, umm, i will leave them there, telstra is on a low from $5 odd last year, sadly they will always be needed
    the rest i stuck in a rams account, 3% least its safe
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    I think that Winx might be safer.
    I'm out of my mind, but feel free to leave a message...

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