After I first dabbled in investing 20 years in the past, I didn’t pay a lot consideration to FTSE 100 dividend shares. In truth, I didn’t actually understand how dividends labored and even whether or not I bought to maintain them.

Share price progress was all I cared about. So I ended up with a rag-tag bunch of once-whizzy shares that had caught my eye for no matter cause. I’ve realized quite a bit since then.

I nonetheless purchase progress shares. In 2024, I’ve loved stellar returns from non-public fairness specialist 3i Group, FTSE 250 insurer Simply Group, and engineer Costain Group. Over 12 months, their shares are up a surprising 65.72%, 93.07%, and 60.94%, respectively.

I don’t simply purchase progress shares

Inevitably, I’ve had my share of losers too. Makes an attempt to catch falling knives Aston Martin, Ocado Group, and Burberry Group all proved foolhardy.

Fortunately, I’m nonetheless forward total, and even higher, holding a ramification of FTSE 100 dividend shares has helped to maintain issues ticking over.

Immediately, the FTSE 100 financials sector is a wealthy supply of dividends. I maintain Authorized & Normal Group, M&G, and Phoenix Group Holdings.

Their trailing yields must be seen to be believed at 8.51%, 9.74%, and 10.05%, respectively. They smash the return from any financial savings account.

Sadly, their shares have floundered over the past 12 months. L&G is up a modest 5%, M&G has slipped 2.46%, and Phoenix has climbed 10.7%. This has been a troublesome yr for the monetary sector, resulting from bumpy inventory markets and sticky rates of interest. But I’ve nonetheless bought my dividends (and sure, I do get to maintain them).

Buyers can nonetheless get up to five% a yr on money or bonds with out placing their capital in danger. As soon as rates of interest fall, financial savings charges and bond yield will comply with however dividends received’t. With luck they’ll rise, as corporations improve income and share the spoils with buyers. As with investing, nothing is assured.

My Taylor Wimpey shares have taken a beating

I’m maintaining an in depth eye on one portfolio holding, home builder Taylor Wimpey (LSE: TW). Simply a few months in the past, I used to be sitting on a complete 12-month return of round 50%, together with reinvested dividends. Not anymore.

The Taylor Wimpey share price has slumped 19.75% within the final three months, as rate of interest minimize hopes fade and mortgage charges climb. In an extra blow, subsequent April’s nationwide insurance coverage and minimal wage hikes will jack up hiring prices and squeeze the group’s margins. Over one yr, the inventory is down 3.61%.

But I believe the Taylor Wimpey sell-off has been overdone. This morning we realized that home costs climbed for the fifth consecutive month in November to a report £298,083, based on Halifax. They’re up 4.8% over the yr.

If rates of interest fall subsequent yr, Taylor Wimpey shares might stage a restoration. Both method, I’m nonetheless getting my dividends. The trailing yield is now a bumper 7.44%. It seems dependable, given the corporate’s stable stability sheet.

Most shares undergo good occasions and dangerous occasions. The attraction of dividend shares is that with luck, the revenue ought to roll in all through. That’s why I’m basing my retirement round FTSE 100 dividend heroes like Taylor Wimpey. Plus some progress shares, after all.