Ramsey's Rule May Not Apply to Retirees Relying on Dividend Income
Dave Ramsey has long warned that investing in individual stocks is a gamble. However, for retirees who rely on dividend income to pay their bills, this advice may not be applicable.
Johnson & Johnson (NYSE:JNJ) is an example of a stock that has consistently raised its dividend payouts over the years. In April 2023, J&J increased its quarterly dividend by 3.1% to $1.34 per share, up from $1.30.
The company's finance chief, Joe Wolk, stated that J&J is not dependent on one or two products and has a broad portfolio with 28 platforms generating over $1 billion in annual revenue each.
Ramsey recommends investing in mutual funds, which pool money from many investors to buy dozens of stocks. However, for retirees living on income, a portfolio of chosen dividend payers can provide a reliable check that tends to rise over time.