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The tax shield of buybacks
An investor receiving dividends loses control over the tax burden—they must pay tax upon payment. An investor owning shares of a company conducting buybacks chooses the moment of sale themselves.
You can hold a position for decades, benefiting from the growth of the business's value, and not pay taxes until you actually need the money. This allows capital to work for you 100% longer.
In the context of compound interest, this time lag is your greatest ally. Ignore the dividend noise, look for companies that effectively work with their own equity.
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