A Post from the Past:
A Post from the Past:
This Week's Links:
A Post from the Past:
Woo-hoo, I have completed four goals already! I still really need to start working toward achieving the fitness goals. Feel free to share how your goals are going!
A Post from the Past
The results were great! In order to achieve my goals, I only need to yield 5.06% on my investments throughout retirement, which suggests I can be pretty conservative if I maintain my current contribution rate!
I have made substanial progress on nine of these goals, but I really need to start working toward achieving the fitness goals. Feel free to share how your goals are going!
Every Friday I am planning on sharing two great links that I stumbled across during the week. I will also share a previously written article to ensure new readers can still use great tips from the past.
This Weeks Links:
A Post from the Past:
I ran the beverage savings calculator and found that I could save $208/year and $3,315 after 10 years if I order water every time I go out to eat, assuming that my beverage usually costs $2 and I go out to eat twice a week. I also ran the retirement savings now vs. later and found that a person my age would have to pay $254 more each year to have the same ending balance if they choose to wait a year to fund a retirement account, assuming a $2,500/year contribution.
Feel free to share your favorite calculators...
Many established stocks release dividends to their shareholders. Dividends are payments (often quarterly) of a specific amount granted per share owned. For example, let’s say you own 215 shares of Proctor and Gamble (PG). P&G paid a $.31 dividend last week. So this means that your 200 shares have earned you: 220 x .31 = $66.65.
So, your a long term investor and want to accumulate value on your stocks. What to do? Reinvest those dividends! Most stock brokerages offer dividend reinvestment plans, which allow you purchase more shares of the particular stock that just paid you dividends with the dividend payment (so this means we could buy another share of PG with our dividend payment).
Over time you will continue accumulating shares and your dividend payments will grow. This process may even be accelerated if the total dividend payments exceed the price of a share of stock. 50 years from now those dividend payments may be massive, providing a sizable amount of portfolio value.
Watch it in Practice:
If you invested 1,000 in Proctor and Gamble in '95 what would your asset be worth today:
- 95': Bought 53 shares (1000 initial investment / $19.00 average per share). Received annual dividend = $.40 and reinvested at a price of $19.50. Now own 54 shares of PG (.40 x 53).
- 96': Received annual dividend = $.45 and reinvested at $20.00. We now own 55.25 shares of PG.
- 97' Received annual dividend = $.50 and reinvested at $25.00. We now own 56.5 shares of PG.
- 98' Received annual dividend = $.56 and reinvested at $31.00. We now own 57.5 shares of PG. - 99' Received annual dividend = $.62 and reinvested at $41.00. We now own 58 shares of PG.
- 00' 2 for 1 split (shares are now 58 x 2 = 116). Received annual dividend = $.70 and reinvested at $29.00. We now own 119 shares of PG.
- 01' Received annual dividend = $.77 and reinvested at $34.00. We now own 122 shares of PG.
- 02' Received annual dividend = $1.17 and reinvested at $30.00. We now own 127 shares of PG.
- 03' Received annual dividend = $.90 and reinvested at $45.00. We now own 129.5 shares of PG.
- 04' Received annual dividend = $1.00 and reinvested at $54.00. We now own 132 shares of PG.
- 05' Received annual dividend = $1.12 and reinvested at $54.00. We now own 135 shares of PG.
- 06' Received annual dividend = $1.25 and reinvested at $62.00. We now own 138 shares of PG.
So in a little over 10 years we have almost tripled the amount of shares we started with leaving us with a portfolio value of over $8812 (63.86 x 138). A 881% gain!
