Now, what happens if we start off with a 4% dividend yield, but that dividend grows 8% per year? After 10 years, the nest egg is slightly lower at $31,076. You'll have more after 15 and 20 years than you did with the flat 6% yielder. Your totals will be $55,050 and $97,840. Perhaps more importantly for the investor who starts collecting the income after 10 years, the Perpetual Dividend Raiser generates $1,177 - substantially more than the $916 in the earlier example. After 15 years, the income rises to $2,120. If you let the money compound for 20 years and then begin receiving the dividend checks, you'll take home $3,828 - more than three times the amount with the higher-starting, but static, yield. How about if you need the income today and don't have time to reinvest the dividend and let it compound? A $10,000 investment in a stock that yields 6% and doesn't grow its dividend will generate $600 in income every year. The 4% yield that grows by 8% every year starts off paying you $400 per year. By year seven, you're making $637 - more than the 6%-yielding stock. At year 10, you're collecting $799 - 33% more than the $637 paid by the 6%-yielding stock. After 15 years, you're collecting just about double the amount of the other stock with $1,159, and five years after that, your income is $1,726 - nearly three times the amount of the 6% stock. This is a perfect illustration of why I strongly recommend Perpetual Dividend Raisers for long-term investors. Your nest egg will grow faster, and you'll receive more income than if you chased yield and bought stocks that paid higher dividends but didn't grow those dividends. Though the money I earned in high school and over summers helped me get through college, it was a sickening feeling to draw down those reserves, knowing there wasn't much left for a real emergency. Perpetual Dividend Raisers help ensure I never have that experience again. Owning stocks that generate more income every year should help me avoid draining the nest egg at a rapid pace. YOUR ACTION PLANTo learn how to build a bulletproof passive income stream and compound your wealth using dividend stocks, check out my Easy Income Challenge. In it, I show you - through easy-to-follow directions - how to set up your own dividend portfolio. Including how to find winning stocks... How to maximize your future payouts... And plenty more. Click here to take my Easy Income Challenge. |
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