Dividend Investing 101 | Dividends Explained

If You Only Invested Then…A Little Motivation for Now

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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

Coca Cola
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.

Abbott Labs
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!

I'm a dividend growth investor who is aiming to retire early in 5 years at the age of 45. My goal is to live off the income my dividend portfolio and rental property produce exclusively and leave the corporate rat race. I hope you will join me in this journey!


  1. Yes, this is quite inspiring. The longest time frame is 1970 to today which is 41 years or essentially a working lifetime. What a great little retirement income you could enjoy!

  2. DP, that’s a great reminder! Time flies – which is terrible in every other context (except investing) 🙂

  3. I love reading this stuff 🙂

    Consider you booked in my weekly roundup again 🙂

    Any particular online calculators you used for your math?

    • I use the investment calculators on the investor relations page of each company. Most larger, well established companies have them.

  4. This is the kind of stuff that keeps me smiling at night! I too live in the clouds at times. It’s these kinds of numbers that keeps me investing large chunks of my income every single month. I’m OK with a little delayed gratification if it means huge checks from quality companies coming my way!

    I agree with SS that in every other context the term “time flies” sucks! Only in investing is it such a wonderful thought.

    • Mike Scott

      Even if you make a fortune being old still sucks..Only good time to get money is when your young and can enjoy it. However being young and wealthy is hard on your character..

      • Ranga Nara

        @Mike: So very well said. Sometimes it seems that one generation toils to build wealth only for the next generation to enjoy or squander!

  5. Ah yes, woulda coulda shoulda…. I have heard the legend of a couple of people at work who retired Walmart millionaires, simply by making an early investment.

  6. Eye popping results and worth showing young people. It is hard for young people to think longer term. These examples definitely help.

  7. I cried the whole way through! Man, if I was only alive in 1970 to invest…

  8. These type of calculations are interesting…but what if you had invested in kodak or xerox? In 1970 those stocks looked as good as coke…

    • That’s absolutely true – but’s why you have monitor your portfolio regularly. It’s buy and hold, not buy and forget.

      Both Kodak and Xerox, while not the great companies they once were, did not experience sudden crashes. They were slow declines over years, as their products and technology fell behind. If you had monitored them carefully, you could have gotten out, and used that money, including dividends, to invest in a better stock.

  9. Hi DP, how did you start your investment? Did you split your initial investment into a number of dividend stocks at the onset? Or did you build up one stock at a time via monthly infusion? I’ve just started my journey and so far I’ve picked three stocks. I’m contemplating if I should keep adding more to these stocks or find another one to add in my portfolio. Any advice from your end would be superb. thanks!

    • If you’ve done your research and feel confident in your stocks I don’t see why you need to spread the wealth so soon. Making to many buys will increase your cost, assuming you pay per trade. Find a good stock, and enter a position over time. My two cents.

  10. Eloise Weary

    That is some astonishing information and I was wondering if you can tell me the value of Yahoo stock, if purchased in 1983m with a $500 investment, because this was something that I wanted to do and have always wanted to know if I had convinced my parent s to give me that money, how much I would have been worth in 2003????

    • Yahoo! became a publicly traded company in April 12, 1996. Its initial public offering at $13 per share, selling 2.6 million shares, raising $33.8 million dollars!

  11. It’s a lovely dream, but the Median Household Income in 1970 was $8,734.00. That’s the equivalent of $49,000 today. If you could scrape up $50k today and invest it for forty years (’til 2050), in a stock that will still be around halfway through the 21st. Century, you’d be earning an annual dividend of the 2050’s equivalent of $12,000 today (Taking Proctor & Gamble as our model).


    • Hmmm…I’m intrigued by the idea, but I’m not sure how much water it will hold. I haven’t gone through and checked any numbers, but I’m not exactly sure how you got from point a to point b.

      According to P&G’s stock calculator, if you had purchased $8,734.00 worth of shares in January of 1970, today that would be worth $313,760.81. At the current yield of 3.1%, that would be $9,726.59 in dividends yearly, essentially more than your “average household income” or investment, at the time. Using this logic, wouldn’t 50k bought today, assuming the same rate of return, mean dividends well over 50k yearly in 2050?

      And as far as I know, this calculation does not include reinvested dividends, or any additional capital added in.

    • Median household income in 1970 was about $35,000, not $8734

  12. You are not factoring in dividend reinvestments.

    Factor that in, and the payoff on 10,000 investment in 1970 in Altria is worth millions.

  13. I believe Tim is trying to point out that you have not considered inflation in your analysis. True, you would get dividends over 50k in 2050, but 50k would no longer be as large an amount then, as it is today. If you consider the long-term inflation rate to remain the same as it has been in the last 4o years, then 49k then would be 8734 today. So you would have invested 50k now & have dividends worth 9-10k coming in 40 years later. Not as rosy a picture as it seems just from the numbers.

  14. Your WMT calculation is wayyy off if you bought $1500 worth in 1980…. ***note avg share price in 1980 was .15 cents/share! You would have been able to buy 10000 shares for $1500. 8 2 for 1 splits = 2^8 1,280,000 shares – Value = $97,702,400, paying an annual dividend of $1.88 or $2,406,400 annually!