Can you safely earn double-digit returns?


I'm going to show you some real-life examples of double-digit returns earned safely. Stock prices go and up and down all the time, the key is to focus on Real Total Return.

Real Total Return = Capital Appreciation + Dividend Income + Dividend Growth

What is a dividend
Quick reminder: A dividend is a payment (share of profits) made to you from the company just for being a shareholder. For example if a company is paying a dividend of $1/share, and you own 1000 shares, you will receive $1000 every year for as long as you own those shares and as long as the company continues to pay the $1/share dividend. You can choose to save your dividends, spend them, or re-invest them into more dividend-paying stocks.

What is dividend yield
The dividend yield shows you how much your return is each year for just holding on to your shares. For example, you buy shares in a company for $10 each and the company is paying $1 dividend per share, your dividend yield is 10%:

Dividend / Share Price = $1 / $10 = 0.1 expressed as a percentage equals 10%

Therefore if you invested $5000 in this company and the dividend yield is 10%, you would earn $500 (10% of $5000) every year for as long as you own those shares, and as long as the company continues to pay the $1 dividend per share.

Dividend Increases = More Money For You
Every dividend increase adds more money to your pocket:

  • Proctor & Gamble has had 61 years of consecutive dividend increases
  • Coca-Cola has had 55 years of consecutive dividend increases
  • Colgate-Palmolive has had 54 years of consecutive dividend increases

There are dozens and dozens of examples of companies that have been increasing dividends consecutively for more than 35 years.

Real-life Examples of Double-digit Returns
Below are three real-life examples of double-digit returns. These returns are possible because of dividend increases.

Your Money Making Machine
$2,500 invested in each of the 3 companies above would give you over $1110 in dividends just this year alone. With these 3 companies you've created for yourself a Money Making Machine (MMM), this MMM will provide you with over $6000 in dividends in the next 5 years.

Focus on quality dividend-paying stocks
Focus on buying quality dividend paying stocks when they are priced low (undervalued). Your passive income will grow when you re-invest your dividends into more dividend-paying stocks, and you invest in companies that have a history of increasing their dividends. Remember your Real Total Return:

Real Total Return = Capital Appreciation + Dividend Income + Dividend Growth

Without dividends you have no dividend growth and no dividend income, you just have to hope the stock price appreciates. Dividends give you real money in your pocket, you no longer have to worry about stock prices falling.

Safely Start today
Safely start today to build your own stream of growing passive income, and I can show you how. I created the 12 Rules of Simply Investing to help you get started right away, and start earning more passive income for yourself. The 12 Rules of Simply Investing are designed to minimize your risk by focusing on quality companies.

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