Meanwhile, the stock's average dividend growth rate is 2% per year. Here's what that looks like in the calculator... This tool can help you assess how much of a difference dividend reinvestment can make for your final return. Reinvesting dividends is easy and can be done through your broker or through individual companies. (For tax and convenience purposes, it's easier to go through your broker.) You can request that the dividends of all your stocks, or just some of them, be reinvested. Granted, many shareholders of dividend payers prefer to collect the passive income - but the calculator makes a compelling argument for why you should at least consider reinvesting... The difference is dramatic... In this scenario, reinvesting your dividends over 10 years gave you an annualized return of nearly double what you would have earned collecting the income. This is thanks to the power of compounding. Each quarter as you received and reinvested your dividend from Enterprise, it would have bought fractional shares, which would have earned more in dividends and so on. (Remember, Marc's 10-11-12 System is designed to produce at least 12% annual returns over 10 years with dividends reinvested. Enterprise Products Partners' potential 37.35% annualized return trounces that!) What Are You Waiting For? Because we know the market goes up over the long term, dividend reinvestment doesn't have to be a frightening commitment. In fact, shareholders who reinvest dividends are some of the most fortunate ones when a bear market strikes. Their automatic purchases ensure that they buy at the stock's low. While this also means that they buy at less depressed levels, dividend reinvestors are hardly suffering by "buying at the top." In fact, if you bought at the top of the market just before the Great Recession, you'd have a total return of 176% today collecting dividends and 221% reinvesting them. Not too shabby... This powerful strategy presents an unmatchable opportunity to grow your wealth by leaving it alone. Good investing, Mable P.S. Dividend reinvestment is just one of Marc's top strategies for building a wealthy retirement... Sign up to receive his free Ultimate Dividend Package and gain access to "the safest high-yield dividend in the world" and other powerful secrets. Just click here. |
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