My story begins in 2000 when I decided to buy 185 shares in a company called TransCanada (TRP). After applying the 12 Rules of Simply Investing I decided that TRP would be a great investment. TRP had:
- A strong history of profitability
- A strong history of growing dividends
- A product that would be in need for a very long time
- A stock price that made the shares undervalued
I paid $13.40 for each share for a total investment of $2479 ($13.40 x 185 shares). In 2000 TRP was paying a dividend of $0.80 per share, since then the dividend has increased each year, today the dividend is $1.92 per share.
This year my investment in TRP will produce $355.20 in income:
$1.92 x 185 shares = $355.20
$355.20 of $2479 (my original investment) represents a return of 14.33% annually and possibly more if the dividends continue to increase every year.
$355.20/$2479 = 14.33%
It’s gets even better; since I’ve owned shares in TRP I’ve received a total of $3481.66 in dividends (cash). Remember I only paid $2479 to buy those shares.
Today TRP shares are trading at $51.54, if I was to sell all my TRP shares the return including dividends would be 525%!
Join me in Montreal, Toronto, or Ottawa and I’ll share more real-life stories with you, and show you how you too can achieve great returns.
If you are curious about fees, keep reading….. My purchase of TRP shares cost me $29.99 in fees. Had I put the same amount of money in a mutual fund and held the mutual fund for the same amount of time, the total fees would be $1431.14, a 4672% increase!
Would you rather pay $29.99 in fees or $1431.14?
See the screenshot below (BTW I’m not picking on any specific mutual fund, I just picked the first Canadian Equity Fund I could find in the drop-down list.):
Screenshot taken from: GetSmarterAboutMoney.ca
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