Many investors use dividends to create wealth over the long run. As a wealth accumulation tool, the reinvesting of dividends ranks near the top. In fact, when investors hear that "stocks average 8% to 11% over the long run", it is only true if dividends are reinvested. Without dividends reinvested, the S & P would not average much more than 6% according to Morningstar, Dalbar Inc, and simple calcutlons you can do at home. The mistake that retired investors make is that they start trying to live off dividends. When you spend your dividends, you will stop building wealth in the same way and are subjecting your portfolio to sequence of returns risk. Steve and Sinclair break down and analyze the outcomes of two investors who bought Coca Cola in 1962 to 1965 when Coke was trading at $80 a share with $10,000. One of the investors spent all dividends. The other reinvested dividends. Find out why it is so important to separate your income capital from your wealth creating (growth) capital.