MONEY MATTERS
38 | SHARES | 23 May 2019
Helping you with personal finance issuesWe examine how to get diversified exposure to dividends
How to structure
your income portfolio
T
he prospect of companies
ĐƵƫŶŐƚŚĞŝƌĚŝǀŝĚĞŶĚƐŝƐ
ůŽŽŵŝŶŐůĂƌŐĞĂŐĂŝŶ͘KŶ
14 May Vodafone (VOD) cut its
ĚŝǀŝĚĞŶĚ͕ĞŶĚŝŶŐĂƚǁŽͲĚĞĐĂĚĞ
ůŽŶŐƐƚĞĂŬŽĨŝŶĐƌĞĂƐĞƐ͕ǁŚŝůĞ
ƚŚĞƌĞĂƌĞĨƵƌƚŚĞƌǁĂƌŶŝŶŐƐƚŚĂƚ
other sectors such as insurers are
ĨĞĞůŝŶŐƚŚĞĐƌƵŶĐŚĂŶĚĐŽƵůĚƚĂŬĞ
ƚŚĞĂdžĞƚŽƚŚĞŝƌƉĂLJŽƵƚƐ͘
dŚŝƐǁŝůůďĞĂǁŽƌƌLJĨŽƌŵĂŶLJ
ƌĞƟƌĞĞƐ͕ǁŚŽƌĞůLJŽŶƚŚĞƐƚĞĂĚLJ
ĚƌŝƉͲĨĞĞĚŽĨĚŝǀŝĚĞŶĚƐĨƌŽŵ
ƚŚĞƐĞĐŽŵƉĂŶŝĞƐƚŽƉƌŽǀŝĚĞƚŚĞ
ŝŶĐŽŵĞƚŚĞLJĚƌĂǁĨƌŽŵƚŚĞŝƌ
ƉĞŶƐŝŽŶ͘tŚĞƚŚĞƌLJŽƵŝŶǀĞƐƚ
ŝŶƚŚĞƐƚŽĐŬƐĚŝƌĞĐƚůLJŽƌŚĂǀĞ
ĞdžƉŽƐƵƌĞǀŝĂĨƵŶĚƐ͕ŝƚ͛ƐůŝŬĞůLJ
ƚŚĂƚLJŽƵƌƌĞƟƌĞŵĞŶƚƉŽƚǁŝůůďĞ
ĂīĞĐƚĞĚŝĨƐŽŵĞŽĨƚŚĞƐĞŐŝĂŶƚƐ
ƐƚĂƌƚĐƵƫŶŐ͘
dŚĂƚĚŽĞƐŶ͛ƚŵĞĂŶLJŽƵŶĞĞĚ
ƚŽƉĂŶŝĐ͕ďƵƚŝƚĐĂŶďĞĂŐŽŽĚ
ƟŵĞƚŽƌĞǀŝƐŝƚǁŚĞƌĞLJŽƵŐĞƚ
LJŽƵƌŝŶĐŽŵĞĨƌŽŵĂŶĚŚŽǁƚŽ
ƐƉůŝĐĞƵƉLJŽƵƌƉŽƌƞŽůŝŽƚŽŐŝǀĞ
LJŽƵƚŚĞďĞƐƚĐŚĂŶĐĞŽĨŚĂǀŝŶŐĂ
ƐƚĞĂĚLJ͕ďƵƚĂůƐŽŐƌŽǁŝŶŐ͕ŝŶĐŽŵĞ͘ŶĂŵĞůLJŝŶŇĂƟŽŶ͘
ŶŝŶǀĞƐƚŽƌŝŶĂĨƵŶĚŐĞƫŶŐĂ
κйLJŝĞůĚƚŽĚĂLJ͕ƐŽĂάκϬƉĂLJŽƵƚ
ŽŶĞǀĞƌLJάϭ͕ϬϬϬƚŚĞLJŚĂǀĞ
ŝŶǀĞƐƚĞĚ͕ŝƐŶŽƚŐŽŝŶŐƚŽďĞŚĂƉƉLJ
ŐĞƫŶŐƚŚĂƚƐĂŵĞάκϬƉĂLJŽƵƚŝŶ
ϭϬLJĞĂƌƐ͛ƟŵĞ͕ĂƐƚŚĞƐƉĞŶĚŝŶŐ
ƉŽǁĞƌŽĨƚŚĂƚŵŽŶĞLJǁŝůůŚĂǀĞ
ĚŝŵŝŶŝƐŚĞĚ͘
/ŶƌĞĂůͲǁŽƌůĚƚĞƌŵƐ͕ŝĨLJŽƵ
ƌĞƟƌĞƚŽĚĂLJĂŶĚǁŽƌŬŽƵƚƚŚĂƚ
LJŽƵĐĂŶǁŝƚŚĚƌĂǁĂάϮϬ͕ϬϬϬ
annual income from your
ƉĞŶƐŝŽŶƉŽƚ͕LJŽƵǁĂŶƚƚŚĂƚ
ĂŵŽƵŶƚƚŽŐƌŽǁǁŝƚŚƟŵĞ͕ŝŶ
ƚŚĞƐĂŵĞǁĂLJĂƐĂƐĂůĂƌLJǁŽƵůĚ
ŝŶĐƌĞĂƐĞĞĂĐŚLJĞĂƌ͘
/ŶϭϬŽƌϮϬLJĞĂƌƐ͛ƟŵĞƚŚĂƚ
άϮϬ͕ϬϬϬǁŝůůďƵLJLJŽƵĨĂƌůĞƐƐ͘ƐĂŶĞdžĂŵƉůĞ͕ĂάϮϬ͕ϬϬϬŝŶĐŽŵĞ
ŝŶϮϬϬΘǁŽƵůĚŶĞĞĚƚŽďĞ
άϮς͕ϮϭρƚŽĚĂLJũƵƐƚƚŽŚĂǀĞŬĞƉƚ
ƉĂĐĞǁŝƚŚŝŶŇĂƟŽŶ͘
zŽƵŶĞĞĚƚŽďĂůĂŶĐĞƚŚŝƐ
ŐƌŽǁƚŚĨŽƌƚŚĞĨƵƚƵƌĞǁŝƚŚ
ŝŶĐŽŵĞƚŽĚĂLJ͘,ĞƌĞ͛ƐŚŽǁ͘DĂŶLJƉƌŽĨĞƐƐŝŽŶĂůĨƵŶĚ
ŵĂŶĂŐĞƌƐǁŚŽƌƵŶŝŶĐŽŵĞĨƵŶĚƐ
ǁŝůůĐƵƚƚŚĞŝƌƉŽƌƞŽůŝŽƵƉƚŽ
ƚĂƌŐĞƚĚŝīĞƌĞŶƚŶĞĞĚƐ͘dŚĞLJĂƌĞ
ĞdžƉĞĐƚĞĚďLJŝŶǀĞƐƚŽƌƐƚŽƉƌŽǀŝĚĞ
ĂĚĞĐĞŶƚŝŶĐŽŵĞƚŽĚĂLJ͕ďƵƚ
also to ensure that the income
ŬĞĞƉƐƉĂĐĞǁŝƚŚƌŝƐŝŶŐƉƌŝĐĞƐ͕DIVIDE AND
CONQUERzŽƵŶĞĞĚƐŽŵĞŝŶĐŽŵĞƉĂLJĞƌƐ
ŝŶLJŽƵƌƉŽƌƞŽůŝŽƚŚĂƚĂƌĞƌĞůŝĂďůĞ
ĚŝǀŝĚĞŶĚƉĂLJĞƌƐ͘/ƚ͛ƐŝŵƉŽƐƐŝďůĞ
ƚŽŬŶŽǁǁŚĞƚŚĞƌĂĐŽŵƉĂŶLJŽƌ
ĨƵŶĚǁŝůůĐŽŶƟŶƵĞŝƚƐĐƵƌƌĞŶƚ
ƉĂLJŽƵƚ͕ďƵƚLJŽƵĐĂŶůŽŽŬĂƚƚŚĞ
ƚƌĂĐŬƌĞĐŽƌĚĂŶĚƚŚĞĮŶĂŶĐŝĂůƐƚŽ
ŐŝǀĞLJŽƵĂŐŽŽĚŝĚĞĂ͘
dŚŝƐŐƌŽƵƉŽĨƐƚŽĐŬƐŽƌĨƵŶĚƐ
ƐŚŽƵůĚďĞƚŚĞďĂĐŬďŽŶĞŽĨ
LJŽƵƌƉŽƌƞŽůŝŽ͕ƚŚĞLJƐŚŽƵůĚƉĂLJ
ŽƵƚĂĚĞĐĞŶƚŝŶĐŽŵĞĂŶĚŚĂǀĞ
ĂƐŽůŝĚƚƌĂĐŬƌĞĐŽƌĚŽĨĚŽŝŶŐƐŽ
ŝŶƚŚĞƉĂƐƚ͘
/ĨLJŽƵƉŝĐŬƐƚŽĐŬƐƚŚĞLJĂƌĞ
ůŝŬĞůLJƚŽĨĂůůŝŶƚŽƐŽŵĞŽĨƚŚĞ
ůĞƐƐǀŽůĂƟůĞƐĞĐƚŽƌƐ͕ƐƵĐŚĂƐ
ĐŽŶƐƵŵĞƌƐƚĂƉůĞƐ͕ďƵƚƚŚĞLJǁŝůů
ďĞŽŶƚŚĞŵŽƌĞďŽƌŝŶŐƐŝĚĞ͕
ƉůŽĚĚŝŶŐĂůŽŶŐĐŚƵƌŶŝŶŐŽƵƚĂ
ĚĞĐĞŶƚĚŝǀŝĚĞŶĚĂŶĚŶŽƚŐŝǀŝŶŐ
LJŽƵƚŽŽŵĂŶLJƐůĞĞƉůĞƐƐŶŝŐŚƚƐ͘
/ŶĂŶŝĚĞĂůǁŽƌůĚƚŚĞŝŶĐŽŵĞͲ
ƉƌŽĚƵĐŝŶŐĐŚĂƌĂĐƚĞƌŝƐƟĐƐŽĨ
ƚŚĞƐĞŝŶǀĞƐƚŵĞŶƚƐǁŝůůŵĞĂŶƚŚĞLJ
ĂƌĞĂƩƌĂĐƟǀĞƚŽŽƚŚĞƌŝŶǀĞƐƚŽƌƐ
ƚŽŽ͕ĂŶĚƐŽƚŚĞŝƌƐŚĂƌĞƉƌŝĐĞ
ĐŽƵůĚĂůƐŽƌŝƐĞŝŶƟŵĞ͕ĚĞůŝǀĞƌŝŶŐ
LJŽƵƐŽŵĞĐĂƉŝƚĂůŐƌŽǁƚŚƚŽŽ͘THE STEADY
EDDIES