Albert Einstein is merited with saying that compounding ‘is the most powerful force in the world' or the ‘eighth wonder of the world'.
When you apply this to reinvesting your dividends, you'll see why compounding is so powerful.
Compounding or compound interest is basically earning interest on interest that you've already received.
When it comes to dividends, it means instead of ta... ››› more
The only way to live a worry-free retirement these days is to have steady streams of income coming in, month after month.
Without income you can count on, you're dependent on your retirement annuity to get by. And that's not a spot you want to be in…
That's why, part of my job as Real Wealth editor, is to find investments that consistently pay investors dividends - as well as - investmen... ››› more
From mid-2002 to mid-2017, the JSE All Share returned a cumulative 420%.
Doesn't sound too bad, right?
But if you had re-invested dividends, the return would be over 700%
Just think about that for a second…
That's an extra 300% growth thanks to simply reinvesting the dividends.
To put it another way, R10,000 back in mid-2002 would be worth over R50,000 invested in the JSE. Bu... ››› more
Did you know in a 200-year period, nothing has come close to matching the long-term compounded returns of stocks?
In a study conducted by University of Pennsylvania finance professor, Jeremy Siegel,
showed that every $1 invested in:
• Treasury Bills, grew to $5,061
• Bonds were worth $18,235
• Gold rose to $32.84 204
And stocks returned a phenomenal $12.7 million.
But do... ››› more
Here's a simple question…
What do you think is the best investment to own during and after a market crash?
Well, logic will tell you that safe haven assets like gold and silver should be number one on your list, as investors flee to protect their portfolios.
Even government bonds will spring to mind as investors seek guaranteed income.
But this is far from the truth.
In fact,... ››› more
Investors will search high and low to discover the real secret to what generates wealth in the long term.
Today I'm going to tell you the answer is simple.
Professor of Finance at the University of Pennsylvania and well-known market commentator, Jeremy Siegel did a comprehensive study to discover the best investments over 188 years.
And what he found proved, that one particular asset outp... ››› more
Wouldn't it be a nice for a change, to see consistent income flowing in your account instead of out?
I'm talking about the kind of income that could help you:
• Pay off debts
• Supercharge your retirement
• Build the wealth you need to live the lifestyle you want
Basically do whatever you want, when you want - with no money worries. The kind of income that comes streaming in no m... ››› more
The other day, while making my morning coffee, a work colleague asked me about an opportunity to earn an 11.5% return on a fixed-term bond investment.
And she wasn't talking about RSA Government Retail Bonds. She was talking about investing in a Participation Bond Fund, specifically the FedGroup Participation Bond Fund.
When you invest in a Participation Bond Fund, money is pooled with oth... ››› more
If you've been holding Redefine Properties (RDF) shares, you have an important decision to make. You see, the company is paying a dividend of 41.70 cents for the six months ended 29 February 2016.
You need to choose if you want to receive the cash dividend or use the dividend to reinvest to buy more shares.
The biggest advantage of reinvesting your dividends is compounding
You accumulate... ››› more
I love receiving dividends but reinvesting dividends is not always the most cost effective way to invest it.
Let me explain...
When you only get paid out a couple of hundred or thousand rand in dividends, the brokerage costs of reinvesting that cash can eat away a large chunk of the money.
That's why some investors draw the cash and spend it. This isn't a wise move either.
So, today ... ››› more
Dividends can account for a lot of the returns you see from your investments over the years. And high yielding stocks tend to make better long-term investments.
So how can you suss out a company's dividend before you invest?
Read on to find out more…
Weighing up dividends with dividend cover
You have to tread cautiously when investing in shares for their dividends. Just be... ››› more
Investing in government retail bonds is a good savings vehicle to consider if you want to lock your money away for the longer-term.
By lending money to the South African government by buying these bonds, you receive two interest payments a year until your bonds mature.
But should you take your interest or should you reinvest it?
Let's take a closer look…
The interest you receive f... ››› more
By reinvesting any return you receive from an investment, you can benefit from the power of compounding.
Compounding provides you with a way to let your money snowball over the years.
So which asset does compounding work best with?
Read on to find out…
How best to make use of compounding
Compounding works at its best with shares.
You can see this with a study Professor Jerem... ››› more
Investing with a long-term horizon has many benefits. By buying quality shares that pay dividends, you can stick them away and almost forget about them.
This is because your investments will benefit from compounding. It's a powerful way to build your wealth. It even works with your savings.
So what is compounding?
Read on to find out…
The ins and outs of compounding
Albert Eins... ››› more
When deciding which stocks to buy, it's common to spend time trying to find the ones that are going to be the next big thing.
In fact, the best shares to buy are the ones that pay dividends. By investing in dividend paying stocks and reinvesting those dividends, you can boost your stock market returns.
Let's take a closer look…
Dividends boost your returns
When building a long-ter... ››› more
In March 2012 African Bank was worth R32 billion.
By March 2014 the share price tanked, and the company was worth only R8.8 billion.
By the time the company's shares were suspended on 11 August 2014 it was worth a mere R465 million.
The share price hit rock bottom at 31c, down from R42 share just a couple of years earlier.
Likewise, in May 2013 I warned investors Abil could go under.... ››› more
If you hold stocks that pay dividends, you have two choices. You can take the cash you receive out of your investment account or you can put it to work buying more shares.
So what is the best option for you?
Read on to find out…
Investing for income with dividends
If you’re investing for the long-term, chances are you’ve got some sturdy dividend paying companies in your portfo... ››› more
One popular way to invest your money at low risk is RSA Retail Savings Bonds.
You can choose between buying fixed-rate bonds and inflation-linked bonds over various terms.
Whilst these bonds can be a good way to earn interest on your cash, they have their drawbacks.
Read on to find out more…
What are RSA Retail Savings Bonds?
When you buy RSA Retail Savings Bonds, you’re len... ››› more
I was sitting at my laptop drinking my morning coffee and scrolling through unread emails from the previous day.
One email that caught my eye was from etfSA.co.za. I read about a brand new way to take advantage of a Tax-free Investment Account (TFIA). And, when I read it, I just had to share it with you!
In fact, if you do use this TFIA today, you could earn up to R8 million tax-free! And it... ››› more
When you first invest, you should decide on what asset allocation you're going to stick to. For example, what percentage of your portfolio you'll hold in stocks and what percentage you'll hold in bonds.
Over time, the asset allocation of your portfolio will change as their underlying values rise and fall. So every now and then you need to rebalance your portfolio.
But what's the best way to ... ››› more
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