Buffett doesnt pay dividends because he believes he can allocate the funds to grow the investment over time, so Berkshire shouldnt be seen as a normal company, but as an individual portfolio, and that is exactly what we as investors do, reallocate the dividends. About the dividends, i believe it is important to have a bit diverisfication among ones investments, this will reduce the risk of total dividend reduction, and then select companies that are solid, stable in growing industries, e.g. the SA banks are very good, dividends quite good still, and other companies like GND do very well and manage the dividends, even though they were reduced still offer some good income, overseas AT&T offers excellent and consistent dividends, Miners are also quite volatile businesses so its possible that they cut dividends, even JPMorganChase which very well capitalised and solid reduced dividends, but this was to build reserves which isnt a bad thing, the money is still there and will be distributed in better times. US TARP funds also limited the dividend pay and was compulsory so i think that played a role as well. I have a plan that if i allocate dividends and additional investments to high dividend payers that also offer good earnings growth and market share growth when they offer good prices my dividend income should increase each year, so far its working quite well even though many companies reduced dividend pays this year, my income is still quite a step up since 2008. The idea is to also identify companies that will increase dividends in the future and not just pay good dividends now, so a bit research and analysis and knowledge into the business is required... for example JPMorganChase's CFO Mike Cavanaugh said at some conferences a while back that they have enormous reserves which will be released when the economy stabilises and starts to grow again, when this happens some good dividends will be declared, this could be expected in 2010... But i am not too concerned as a solid and stable company is more important for me...