Some people believe that the stock market is a zero-sum game. They
argue that when an investor buys shares, there’s always a seller on the
other end. That’s true, but they fail to factor in dividends. When a
company returns capital to investors, it’s no longer a zero-sum game.
That’s one reason buying dividend stocks is such a powerful strategy.Article Source
This guide shows you the ins-and-outs of dividend investing. You’ll also find our top articles on the subject above… and below, our most recent articles.
For example, let’s say you buy $2,000 worth of stock at $50 per share and the yield is 4%. Additionally, we’ll assume the dividend increases 8% per year and the stock rises in line with the historical market average.
If you reinvest the dividend, you’d automatically buy more shares with your payment. Because you’d have more shares, you’d receive more income, which would buy more shares, which would generate more income…
After 10 years, you would have 59.5 shares of stock – 50% more than your original 40 shares. Your $2,000 investment would now be worth $6,215 – more than triple your initial investment. And your yield would be 12% on your original investment.
If you didn’t reinvest, your $2,000 investment would still be worth a respectable $3,882. But that’s $2,300 less than the amount you’d have if you had reinvested that money.
Dividend reinvestment is a great way to supercharge your stock returns. It’s an automated process, and your returns compound the longer you wait.
P.S. I would like to hear from you! Please put a comment below about this post, your opinion or suggestion might be valuable to others! I promise to answer every question you may have or a discussion you might want to start!
Also share this blog post on your social media! If you like the blog, you can subscribe to our email list using the link http://bit.ly/3aklqBl
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This guide shows you the ins-and-outs of dividend investing. You’ll also find our top articles on the subject above… and below, our most recent articles.
Why Invest in Dividend Stocks?
Dividend investing is great way to boost your income. The strategy is a passive approach that’s easy to start. When you buy great dividend companies, you add a steady stream of income to your portfolio.- Steady Income
- Lower Taxes on Qualified Dividends
- Diversification
Compound Your Wealth
Compound interest is one of the most powerful forces for growing your wealth – especially if you own dividend growth stocks.For example, let’s say you buy $2,000 worth of stock at $50 per share and the yield is 4%. Additionally, we’ll assume the dividend increases 8% per year and the stock rises in line with the historical market average.
If you reinvest the dividend, you’d automatically buy more shares with your payment. Because you’d have more shares, you’d receive more income, which would buy more shares, which would generate more income…
After 10 years, you would have 59.5 shares of stock – 50% more than your original 40 shares. Your $2,000 investment would now be worth $6,215 – more than triple your initial investment. And your yield would be 12% on your original investment.
If you didn’t reinvest, your $2,000 investment would still be worth a respectable $3,882. But that’s $2,300 less than the amount you’d have if you had reinvested that money.
Dividend reinvestment is a great way to supercharge your stock returns. It’s an automated process, and your returns compound the longer you wait.
P.S. I would like to hear from you! Please put a comment below about this post, your opinion or suggestion might be valuable to others! I promise to answer every question you may have or a discussion you might want to start!
Also share this blog post on your social media! If you like the blog, you can subscribe to our email list using the link http://bit.ly/3aklqBl
Thank you for your time and participation!
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