Editor’s note: Today, we are taking the unusual step of republishing Porter’s Journal essay from yesterday… while, yes, it is so good that it’s worth republishing, we had technical gremlins that prevented the issue from getting to readers on time and in the regular format. We apologize for the glitch and offer it here today – still as timely and relevant as it was yesterday… The content in the other sections of today’s Journal – “3 Things…,” “Chart Of The Day,” “Mailbag,” “Market Snapshot,” and “Top Positions” – did not appear yesterday.

You will not get rich on regular dividends.

And you’ve probably never heard of the three kinds of secret dividends that public companies use to make the insiders incredibly rich.

The average payout ratio of the S&P 500 is around 35%.

That means, if you’re counting on regular dividends, you’re missing out on roughly two-thirds of the earnings of the companies you own. Where does all the money really go…?

It probably won’t surprise you that company insiders try very hard to make sure that you never understand where the wealth really accrues. It ain’t the dividend you read about in the paper that matters, that’s for sure. It’s the dividends you never hear about that will make you rich.

Ask me how I know…

In October 2023, while I was CEO of MarketWise (MKTW), our board declared a “special” $50 million cash dividend. This was the largest cash distribution we’d ever made as a public company. It was about 4x more than our regular annual dividends. But it never showed up on the securities databases as an “indicated” dividend. It went virtually unmentioned and unnoticed. It doesn’t even show up as part of the total return in most equity databases. It’s like it never happened.

And unless you were a shareholder on November 10, 2023, you didn’t get any of the money. None. Even if you’d held the stock for years previously. But… if you owned the stock on that one day, you got your pro-rata portion of a huge pile of money. Otherwise, you got zilch.