The Dividend Income Illusion: Why Your 8% Yield Is Really Paying You 5%

The Dividend Income Illusion: Why Your 8% Yield Is Really Paying You 5%

The post The Dividend Income Illusion: Why Your 8% Yield Is Really Paying You 5% appeared first on 24/7 Wall St.. The pitch is seductive: park $800,000 in an 8% yielding fund and collect $64,000 a year without touching the principal. The math works on paper. It rarely works in a brokerage account. High headline yields often bleed capital, and once you subtract principal decay and inflation, that 8% distribution frequently delivers closer to 5% o…