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The Easy Way To Get Rich | The Mesh Report

The Easy Way To Get Rich

Dividend Sensei October 6, 2016 Comments Off on The Easy Way To Get Rich

Over the last 145 years the S&P 500 is up 518,856 fold, including dividend reinvestment. This staggering statistic clearly shows the incredible long-term, wealth building power of the stock market; the single greatest way for regular people to become wealthy and achieve financial independence.

BUT a major problem for many people is finding any amount of money to invest. After all, since the market is highly volatile, sometimes dropping as much as 50% in a year, you should only invest discretionary money. In other words, money you won’t need for at least five years.

That’s why living beneath your means, by practicing solid budgeting, is so essential. BUT what if you are currently living paycheck to paycheck, and or drowning in debt? Having just finalized a very painful, and messy divorce, one that left me under a mountain of debt that I’m still paying off, I can certainly relate to this. After all, knowing the basics of sound, buy, hold, add on dips, and reinvest the dividends investing is no use if you can’t scrape together enough money to actually build a quality dividend growth portfolio.

So here’s some helpful suggestions that show how a few minor lifestyle changes, about things many of us don’t even think about, can help you get rich.

Consider: A person who buys a $4.25 coffee at Starbucks each morning could save $128 per month by forgoing this luxury.

If you eat out once a week, you can easily spend $50 for dinner for two. That comes to another $200 in potential savings.

If you spend $12 per week ordering a pizza, that’s another $48.

An average soda at your local gas station can run you $1.20. While not much by itself, one soda a day comes to $38 per month.

The average eat out lunch runs about $8. Buying 30 of these a month is another $240.

By eliminating just these simple things, you can save $654/month. While that may be a surprisingly large number, consider this.

The S&P 500 has averaged 9.05% per year since 1871. Schwab now has an S&p 500 index ETF, which it will let you buy from it, commission free, with an expense ratio of just 0.03%.

So let’s take a look at what you could accomplish by just tightening your belt with just the 5 changes listed above, and doing nothing more complex than investing in the S&P 500 each month, and reinvesting the dividends.

After 10 years you would have: $130,187.21 paying $2,733.93 in annual dividends

20 years: $439,237.02 paying $9,223.98 in dividends

30 years: $1,172,886.50 paying $24,630.62 in dividends

40 years: $2,914,487.78 paying $61,204.24 in dividends

50 years: $7,048,853.14 paying $148,025.92 in dividends

And that’s just with the simplest index fund you can own. Something so simple as a slightly frugal lifestyle, and patient, simple index investing, via dollar cost averaging, and dividend reinvestment can turn you into a millionaire in 29 years.

BUT what if you knew how to build a high-quality, diversified dividend portfolio that yielded 5%, and generated 10% dividend growth? And used a broker such as Robinhood, which charges no commissions for unlimited trades?

Well academic studies indicate that over time you could expect to earn about 15% total returns. What would that $654 per month in simple savings come to? The shocking answer is why I have devoted my life to the study of dividend growth stocks, and spreading the word about this, the greatest wealth building engine ever created.

After 10 years: $183,245.12 paying $9,162.26 in dividends

20 years: $924,573.84 paying $46,228.69 in dividends

30 years: $3,923,661.99 paying $196,183.1 in dividends, equal to $16,348.59 per week

40 years: $16,056,646.20 paying $802,832.31 in dividends, $66,902.69 per month, $15,439.08 per week

50 years: $65,141,334.38 paying $3,257,066.72 in dividends, $271,422.23 per month, $62,635.90 per week, $8,943.27 PER DAY

That my friends is the power of long-term, dividend growth investing combined with simple frugality.

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