The McDonald's Video, EXPLAINED
If you’re here, it’s probably because you saw my weirdly controversial McDonald’s dividendd video and ran to my comments to say, “WhO DoES THiS AcTUaLLy HeLP?!”
Most people rush to the comments to say, “thanks! I’ll just use that spare $1,000,000 I had lying around!” or “How is this supposed to help?!” or “You’re out of touch!” or “You the MILLIONAIRES are on TikTok for your advice?!”
Funny sidenote: I have a similar series on how to make $1,000 a year from a dividend and the comments there are usually like, “$1,000 is nothing!” “Who is this supposed to help?!”
Anyway, here’s why that video IS helpful:
In addition to McDonald’s smaller dividend, the stock has had very solid growth over the last 10 years. Had you been investing, consistently and over time, that dividend would have been reinvested, allowing you to compound over the years AND benefit from asset appreciation.
It shows that whether you’re investing in McDonald’s or ANY stock that pays a dividend, you can amass a large position over time through, yes, consistent investing. It doesn’t matter if it’s a stock like MCD or a dividend ETF like SCHD. The purpose is to illustrate consistent investing as a way to generate passive income in retirement.
It helps because it hopefully prevents people from get rich quick schemes. YES, the rich use their money to get richer. But is it wrong to learn how wealthy people use their wealth to generate more wealth? Or is it something YOU can apply to yourself, even on a smaller scale? There’s nothing wrong with learning how the wealthy make their money work for them.
It helps because it forces people to ask better questions, which in a roundabout way, people do actually do in the comments section. They’re just assholes about it (yeah, I’m probably talking to YOU). You ask, “Are there better investments out there?” “Are there higher yielding stocks?” “Are there higher yielding stocks with a lower cost per share?” “Are there growth stocks that have better performance?” “Should I diversify my portfolio to include some growth and some dividend stocks?” “Can you explain why a HYSA is NOT a better option?” Now you’re thinking critically. Thaaaat’s the point.
finally, it sets realistic expectations. Far too frequently, people imagine they’ll invest a little over time and bam! They’ll have passive income earning them millions per year. This video flips that on it’s head. Actually, you have to invest millions to make thousands (from dividends, not from the stock increasing over time). But if you do it consistently, over time, and invest in multiple investments, you could generate enough passive income to retire. You just need to live below your means, invest and do it consistently. No more fantasies, just real numbers with real math.
There you have it. That’s why the video is helpful.
