One of my favorite activities is dreaming about the net worth I will have in 50 years, and how much money I will make each year in dividends.
I could be living in the clouds a bit, but it gives me motivation to keep saving and investing. Luckily, many of the larger dividend paying companies out there offer handy stock calculators that allow you to calculate your investment returns for various periods of time.
Since I plan on holding my stocks as long as I can, I usually go back as far as the calculators will let me. Just for fun, and maybe a little motivation, take a look at what a $10,000 investment, in various companies, would be worth today.
Proctor and Gamble
Had you invested $10,000 in PG in January of 1970, today, you would own 5,727 shares, worth about $363,000 dollars, and an annual dividend payment of $12,026.70
Coke’s calculator only goes back to 1990 – still, if you had invested $10,000 in January of 1990 in KO, today you would own 1,047 shares, worth approximately $73,143 and with a yearly dividend of $1,968.36.
Walmart has been one of the best performing stocks of the past 30 years, so let’s see where you would be today if you were had enough foresight to invest in 1980. If you had bought $10,000 worth of WMT in 1980, today you would own 74,472 shares worth $3.9 million dollars. Your yearly dividend check would be $108,729.
Bill Gates could have made you a very rich man – if you had purchased $10,000 worth of shares during Microsoft’s ipo, today you would own 137,088 shares worth 3.6 million dollars. Annually, you would earn $87,736 in dividends.
Using your $10,000 to buy into this health care giant in 1990 would today have earned you 1,319 shares worth $68,000. You would receive a steady, rising paycheck every year, and in 2011 that paycheck would be $2,532.
In 1970, you would have bought 303 shares of what was then Phillip Morris for $10,000. Today, not counting your stock in spin-offs Kraft and Phillip Morris International, you would own 29,000 shares worth $786,000. Yearly dividend payments would equal $44,080.
Though these figures assume reinvestment of dividends, they do not include any added investment – just imagine how much you could have with added investment! This is the real power of a dividend investing strategy.
These calculators aren’t perfect, and they assume you knew 30 years ago which companies would still be doing well. Still, they offer some great motivation for us just in the beginning years of our investing lives.
Good luck out there!