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$1,230 in Instant Income?

$1,230 in Instant Income?Our top income expert recently pulled the wraps off his breakthrough moneymaking technique. And he proved beyond a shadow of a doubt how you can use it to generate instant cash payouts of up to $1,230 (or more). Over and over again. But then he took things a big step further and guaranteed you can make $1 million by following his program. And the second he did, our phones went nuts! Space is limited — get the details here.

 

 

Thirsty for Income? How to Thrive in This Yield Desert

By Nick Lanyi on October 25, 2016

For most people, owning dividend-paying stocks is like going to the dentist: you do it because you need to, not because it’s fun.

But dividend-paying stocks are now the only decent option for income investors in this era of low-yielding bonds and no-yielding money markets. In the yield desert we live in, a 4% dividend yield is manna from heaven.

But behind the boring façade, dividend stocks are actually kind of sexy. And they can make you rich.

Not to brag, but I will: Investing Daily has top newsletters for dividend investors. Our Utility Forecaster is routinely ranked among the top newsletters by Hulbert Financial Digest. And we also have powerful portfolios of top dividend stocks in Canadian Edge and Personal Finance as well. In fact, Personal Finance just added one with a yield that tops 7%.

Now I know you’ve heard about the benefits of dividend reinvestment … the power of compounding and all of that. I won’t waste your time on the theory.

But when was the last time you sat down and did the math? Do you truly understand how powerful reinvested dividends can be?

I know, you hate math. So I’ll do it for you.

The Math

Let’s assume we buy 200 shares of a $50 stock for $10,000. The stock yields 4%, or $2 per share, every year. We reinvest all dividends into purchases of new shares. Let’s further assume that the share price goes up 5% a year and the company raises its dividend 5% a year – reasonable assumptions for the high-quality stock with solid cash flows that we recommend.

 

In fact, share price appreciation of 5% per year is a conservative assumption given the historical performance of our portfolios. (For the purpose of this example, we’ll assume we reinvest dividends at the end of each year, and we won’t take commissions or taxes into account.)

 

Year

Dividend per share

Dividend payment

# of shares owned

Share price

Total value

Initial purchase

 

 

200

$50.00

$10,000.00

End of Year 1

$2.00

$400.00

207.62

$52.50

$10,900.05

End of Year 2

$2.10

$436.00

215.53

$55.13

$11,882.17

End of Year 3

$2.32

$500.03

224.17

$57.88

$12,974.96

End of Year 4

$2.43

$544.73

232.83

$60.78

$14,151.41

End of Year 5

$2.55

$593.72

242.13

$63.81

$15,450.32

End of Year 6

$2.68

$648.91

251.82

$67.00

$16,871.94

End of Year 7

$2.81

$707.61

261.92

$70.36

$18,428.69

End of Year 8

$2.95

$772.66

272.38

$73.87

$20,120.71

End of Year 9

$3.10

$844.38

283.27

$77.57

$21,973.25

End of Year 10

$3.26

$923.46

294.61

$81.44

$23,993.04

 

Two observations:

  • Your $10,000 investment turned into $23,993.04 after 10 years. That’s a total return of 139%, or an annualized return of 9.1%. That’s well above average for the stock market over time.
  • The stock’s dividend in Year 10, $3.26 a share, represents a yield of 6.5% on your original share price. In effect, you’ve turned a solid 4% yielder into a high-yielding stock. In a few more years, you’ll be raking in a double-digit yield on your original investment.

As this shows, dividend-paying stocks can form the foundation of a wealth-building portfolio.

 Most of us also invest in growth stocks that can provide a lot more capital appreciation – including some more aggressive picks for explosive growth. But when you have a chance to pick up shares of solid-yielding blue chips like Boeing (NYSE: BA), Duke Power (NYSE: DUK), Pfizer (NYSE: PFE) and Verizon Communications (NYSE: VZ), do it.

Even better, get one or two of our newsletters with powerful dividend portfolios, and be introduced to a slew of perpetual-motion, dividend machines that don’t often make the headlines.

 

 


You might also enjoy…

 

Obscure Tax Law Forces This Company to Pay Out 90% of its Profits

A 50-year-old loophole is forcing one company to pay out $9 of every $10 it makes from ironclad contracts with the U.S. Government.

In fact, over the past seven years, it’s made payments ranging from a few dollars… to tens of thousands of dollars… 30 times. Without a single cut! 

Most folks don’t even know this company exists, but the ones that do are making a mint.

Like Ted B., who’s set to receive a check for $1,096 just a few days from now.

Merrill H., a 58-year-old from New York, has collected over $3,385 so far. 

And retirees Beth and Terry P. have raked in $16,555.

I’ve put together a special report that will give you all the details, including simple instructions on how to get your name on the payout list before the next cutoff date.

You can get your copy here.

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