Normally, I focus on the selection of individual investments that hold the promise of the greatest returns over a particular holding period. This is because I recognize that earning an extra percentage point on your investment returns over the course of a lifetime can lead to outsized wealth creation effects. For someone who invests $1,000 per month over a working career, an extra percentage of compounding could have a million-dollar impact.
But it is also true that the net aggregate amount that you save has outsized effects as well. I was reviewing data pertaining to the Silent Generation, which encompasses those born between 1925 and 1945 who are roughly 75-95 years of age. In 2010, it was predicted that the millennial generation would wield more wealth than those in the Silent Generation age cohort by 2020. Now, that date has been revised to 2027, and even then, the figure is … Read the rest of this article!
BBL, the British-traded shares of the world’s largest miner BHP Billiton, is trading at $30.50 per share. It pays out a $2.48 annual dividend. Based on current market prices, this amounts to a 8.13% dividend payout. Once a large-cap starts yielding in that range, we are talking about investments that can entirely self-fund mini-blue chip portfolios in their own rights if you make a heavy initial investment.
If someone invested $100,000 into BHP at $30.50 per share, I would imagine that such an investor would receive at least $100,000 in dividends cumulatively over the coming seven or eight years. You could build an entire mini-portfolio filled with $10,000 positions in Chevron, Nestle, Johnson & Johnson, AT&T, Exxon, Pepsi, Johnson & Johnson, Procter & Gamble, Hershey, and General Electric from the BHP Billiton dividends alone. And, of course, ten years hence, you would be collecting dividend payments from the BHP Billiton … Read the rest of this article!