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Dividend investing is one of the most passionately followed strategies online - yet much of the enthusiasm is driven by misunderstandings of how dividends work. 

In this episode, Evon Mendrin, CFP®, CSLP® of Optometry Wealth Advisors, dives deep into how dividends actually work, why they aren’t “free money,” and what ODs need to understand before chasing high-dividend stocks or funds - especially in taxable accounts. He also explores when, despite all of this, a dividend-focused approach might still be rational for the right investor.

In this episode, you’ll learn:

• What dividends actually are and how they function within public companies and your own optometry practice.
• Why dividends aren’t “extra” return, and how stock prices adjust for them.
• The real-world tax consequences of dividends - especially in taxable brokerage accounts.
• Why fewer companies pay dividends today, and how stock buybacks often take their place.
• How dividend investing can actually reduce diversification and tilt your portfolio away from global opportunities.
• What explains the performance of dividend-heavy portfolios (spoiler: it’s not the dividends).
• Why “I need X in dividends to retire” is a myth, and how to think about withdrawals and cash flow instead.
• When a dividend strategy can make sense - despite being suboptimal on paper.

Resources mentioned:

• Dimensional’s Research on Dividend Price Adjustments
• Meb Faber’s “Shareholder Yield” Book
• Ben Felix Video on Dividend Investing

Related Episodes:

• Ep 135: Beyond Indexing – An Optometrist’s Guide to Factor-Based Investing
• Ep 134: The Case for Index Funds – Why Optometrists Should Embrace Passive Investing

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The Optometry Money Podcast is dedicated to helping optometrists make better decisions around their money, careers, and practices. The show is hosted by Evon Mendrin, CFP®, CSLP®, owner of Optometry Wealth Advisors, a financial planning firm just for optometrists nationwide.