Since 1960, the cash dividends of companies in the S&P 500 have compounded at a rate of 5.9 percent, or twice the rate of inflation. Viewed through another lens, the cost of living has increased 9 times since 1960, while cash dividends from the S&P 500 have increased 27 times.
The index itself is up 50 times. "I wouldn't tell them that [last fact] because for one shining moment I'd try to get them to stop focusing on principal and focus on income."
Clients who do might be among the few Americans who can provide a legacy. The real definition of wealth, he concluded, is an income "you can't outlive and can leave behind."