There’s nothing quite like the feeling of collecting a dividend distribution. It’s almost like a paycheck – but without any of the work. And if you have the option of reinvesting those proceeds into more shares, which in turn yield their own dividends, which then purchase more shares… even better. You’ve probably seen some of the charts and graphs illustrating the long-term wealth-creating power of dividends (in fact, I shared one recently). But let me put this in another way to really drive the point home… The S&P 500 has given investors a 10.2% average annual return since 1965. Read More
There’s nothing quite like the feeling of collecting a dividend distribution. It’s almost like a paycheck – but without any of the work. And if you have the option of reinvesting those proceeds into more shares, which in turn yield their own dividends, which then purchase more shares… even better. You’ve probably seen some of the charts and graphs illustrating the long-term wealth-creating power of dividends (in fact, I shared one recently). But let me put this in another way to really drive the point home… The S&P 500 has given investors a 10.2% average annual return since 1965. Nothing wrong with that. But Warren Buffett has famously chalked up 20% annualized gains at Berkshire Hathaway over the same period, for a market-crushing cumulative return of 2,810,526%. In the process turning a modest $1,000 stake into $30+ million today. Dividends have played a major role. It’s no coincidence that Buffett’s favorite long-term holdings are all dividend payers. I’m talking about anchor positions in timeless businesses like American Express (NYSE: AMEX), Coca-Cola (NYSE: KO), Bank of America (NYSE: BAC), and Verizon Communications (NYSE: VZ). With growing income streams from these and other holdings, Berkshire Hathaway will pocket more than $5… Read More