Could Buying British American Tobacco Stock Today Set You Up for Life?

If there's one thing that a dividend investor can't resist, it is a large yield. That's probably why British American Tobacco (NYSE: BTI) has caught your eye. At 8.6%, the stock's yield is way higher than the 1.2% you could collect from the S&P 500 index (SNPINDEX: ^GSPC) or even the 2.5% of average consumer-staples stock, using Consumer Staples Select Sector SPDR (NYSEMKT: XLP) as an industry proxy. But before you think that the stock's high yield will set you up for life, you need to consider a few facts.There's a rule of thumb that investors can withdraw 4% of the value of their portfolios each year and, for the most part, not have to worry about outliving their savings in retirement. While the actual 4% figure has been argued over, some suggest the number is lower and others that it is higher. The point here is that 4% of a portfolio isn't a huge amount of money. And it is actually based on the notion that you will sell assets to fund the 4% withdrawal of cash that you'll use to pay for living expenses.Image source: Getty Images.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool