The New American Hustle: Dividends Over Day Jobs

Young Americans are abandoning traditional retirement planning for dividend-focused ETFs that promise immediate income and freedom from traditional employment. Income-generating ETFs captured one in six dollars flowing into equity ETFs in 2025, pushing the sector to $750 billion -- with the most aggressive funds offering yields above 8% quadrupling to $160 billion over three years.

The r/dividends subreddit has grown tenfold to 780,000 members over five years, while YouTube channels and Discord servers dedicated to dividend investing proliferate. YieldMax's MSTY fund, offering a 90% distribution rate through complex derivatives, has underperformed MicroStrategy stock by 120 percentage points since February 2024 when dividends are reinvested -- nearly 200 points when payouts are withdrawn. Speaking to Bloomberg, finance professor Samuel Hartzmark identified this as the 'free dividends fallacy,' where investors fail to recognize that dividends reduce share prices rather than creating additional wealth.

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