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I read an interview with Thomas Stanley, author of The Millionaire Next Door. He talked about the difference between realized and unrealized income. He said, "the problem with mutual funds is that every year they've got to declare a dividend, and you're going to pay tax on that." Is this true of index funds also? Stanley suggested," you might buy stocks in companies that don't pay dividends." Can anyone explain this to me? What kind of stocks is he referring to?
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