Replace your salary with dividend income with Dr. Don Hamson

**Dr Don Hamson** (0:00)
If you look at the last 20 years, two-thirds of the return of the Australian equity market was actually in dividends, including frank credits.

**Bryce Leske** (0:08)
No way, two-thirds.

**Dr Don Hamson** (0:09)
Two-thirds. Whoa. Let's say you are fairly frugal, and you can live on $75,000, you need about a million dollars to get that sort of number, and that's an all equity portfolio.

**Bryce Leske** (0:21)
Everyone has the dream of not working and replacing their salary with dividend income. Well, today, we have the dividend doctor to tell us how we can do it. Welcome to Equity Mates, a show where we explore what's possible in the world of investing. My name is Bryce.

**Alec Renehan** (0:35)
And I'm Wren, and today, we are talking all things income investing. Now, Bryce, in your intro, you said everyone has the dream of quitting their jobs and living off their investment income. Yes. Maybe that's tipping your hand about how much you're enjoying your job with me. No, I love my job. I love my job. Because I want to keep working.
But I think it's a common feeling to have the choice to work, to find a job that you enjoy, that you're not tied to the salary. You can take a lower paying job that is more interesting. You can quit and live on a beach if the fire movement is more your cup of tea. But just having a second source of passive income is a dream. Yes.

**Bryce Leske** (1:11)
Well, I mean, we see it time and time again. Questions consistently come through from the Equity Mates audience. How can I be investing for income? I want to be able to, as you said, support my lifestyle.
And the good thing is that you can do it through building a share portfolio. And we have an expert joining us today who has spent his career understanding dividend investing and has founded a fund manager off the back of it.

**Alec Renehan** (1:38)
Yes.

**Bryce Leske** (1:38)
Exactly that.

**Alec Renehan** (1:39)
His name is Dr. Don Hamson. He is the founder of Plato Investment Management. People might remember our interview with Dr. David Allen earlier in the year.
It seems there's a number of PhDs at Plato. That's why he is the dividend doctor. He got his PhD. We didn't actually ask if he got his PhD specifically in dividends. I would maybe assume it's a bit more general finance, but we'll have to get him back in and ask him. But yeah, we're talking all things dividends. For people who think that dividend stocks may be old, boring and slow growing, why we should give them a second look, how we can approach dividend investing, avoid dividend traps, and most importantly, whether the goal of replacing our salary with dividend income is possible.

**Bryce Leske** (2:26)
So without further ado, here is our conversation with Dr. Don Hamson. Don, welcome to Equity Mates.

**Dr Don Hamson** (2:31)
Thank you for inviting me.

**Bryce Leske** (2:32)
So you're known as the dividend doctor. Where did your love of dividends begin?

**Dr Don Hamson** (2:36)
It came about really, and I talk about this often in presentations, that my parents basically lived off dividends from their share portfolio. They built up before they retired. They predated sort of super and they had owned shares and lived off those dividends and lived reasonably well, although they were probably quite frugal compared to people today, but they seem to do okay.

**Alec Renehan** (3:00)
Now, Don, you're the founder of Plato Investment Management. We've had Dr. David Allen on the show before and he was great.
But tell us a bit about Plato. And one thing that we've heard is that you love hiring PhDs, particularly PhDs from unconventional backgrounds, not finance backgrounds. So, tell us a bit about Plato and your hiring policies there.

**Dr Don Hamson** (3:21)
Well, we only have four PhDs and three of them are from finance.

**Alec Renehan** (3:25)
Oh, okay. So, we're misinformed.

**Dr Don Hamson** (3:27)
But the most interesting one is Dr. Jonathan Whiteoaker, who actually has a PhD in astrophysics, and his father was actually a renowned astrophysician. But the reality is he always loved equity markets and he wanted to invest in stocks, not find new stars.

**Alec Renehan** (3:46)
Yeah, yeah, yeah. He wanted to go to the moon rather than study the moon. Yeah, yeah.

**Dr Don Hamson** (3:50)
And we call him the true rocket scientist in our sort of team. So, but look, I mean, we hire smart people. Most of them have, if they don't have PhDs, they've got multiple degrees or what have you. They're very quantitative. And, you know, but from different backgrounds, we have scientists, we have, you know, IT people, and, you know, various sorts of areas, that's for sure, because you want a diverse sort of background because you don't want a group thing.