Would you like to earn $385,024 a year?

investing dividends

Imagine earning $385,024 each year for the rest of your life, and getting annual increases too! I’ve written many times about the power of dividends especially increasing dividends.

Now let’s take a look at a real-life example with Wal-Mart. Wal-Mart became a public company on October 1, 1970 and started issuing shares at $16.50 each. Since then the company has had eleven 2 for 1 stock splits. Basically this means that if you purchased 100 shares in 1970, today you would own 204,800 shares:

1970: 100 shares
1971: 200 shares (2:1 split on 6/11/71)
1972: 400 shares (2:1 split on 4/5/72)
1975: 800 shares (2:1 split on 8/22/75)
1980: 1,600 shares (2:1 split on 12/16/80)
1982: 3,200 shares (2:1 split on 7/9/82)
1983: 6,400 shares (2:1 split on 7/8/83)
1985: 12,800 shares (2:1 split on 10/4/85)
1987: 25,600 shares (2:1 split on 7/10/87)
1990: 51,200 shares (2:1 split on 7/6/90)
1993: 102,400 shares (2:1 split on 2/25/93)
1999: 204,800 shares (2:1 split on 4/19/99)

Suppose you purchased 100 shares in 1970, your initial investment would have cost you:

100 shares x $16.50 = $1650

Your $1650 investment would be worth over $15 million today:

204, 800 shares x $77.00 = $15,769,600

Today the annual dividend per share for Wal-Mart (WMT) is $1.88. If you had invested $1650 in Wal-Mart in 1970 today you would receive $385,024 in dividends annually:

204,800 shares x $1.88 dividend = $385,024

Wal-Mart has also increased its dividend for 39 consecutive years; therefore it is highly likely that the $385,024 would continue to increase in the future. Not a bad way to earn $385,024 annually, think of all the money you’ll save without having to drive to a job every day  :)

When it comes to investing the Simply Investing way, patience is very well rewarded!

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