Saturday, July 24, 2010

$1000 turns into $18679 in 30 years

How Dividedend Reinvesting Works:

Take $1000 and invest it in a company that pays dividends each year and is typically a safe harbour ivestment. Say Kraft (KFT), Proctor and Gamble (PG), ExxonMobil (XOM) or 3M (MMM).

Below is a consevative estimate of an inital $1000 investment with a 5% dividend return and a 5% average yearly return/appreciation.

Even if you never add additional money and "set it and forget it" after 30 years, your $1000 investment becomes over $18K!

See the results below:

Year Investment Worth
1 $1,000
2 $1,103
3 $1,216
4 $1,341
5 $1,478
6 $1,629
7 $1,796
8 $1,980
9 $2,183
10 $2,407
11 $2,654
12 $2,926
13 $3,226
14 $3,557
15 $3,922
16 $4,324
17 $4,767
18 $5,256
19 $5,795
20 $6,389
21 $7,044
22 $7,766
23 $8,562
24 $9,440
25 $10,408
26 $11,475
27 $12,651
28 $13,948
29 $15,378
30 $16,954
31 $18,692