Howdy Partner 👋
Investing regularly in high-yield, high-quality businesses is one of the most reliable ways to build income.
That’s why we are adding $5,000 every month to Our High Yield Portfolio.
We’ll add to two stocks we already own that both offer very attractive yields
The power of Dividend Reinvestment
Let me tell you a little secret.…
High yield doesn’t have to mean high risk.
Many investors think that a high dividend yield automatically means a business is in trouble, or that it isn’t reinvesting enough capital to grow.
But historically, companies in the top 40% of dividend yields actually outperform the broader market.
When you find the right businesses, you get the best of both worlds:
A reliable stream of income
Attractive historical returns
One of the best parts of high-yield investing?
When you can reinvest the dividends, you grow your wealth much faster.
You’re using your income to buy more income.
Our High Yield Portfolio
We launched the High Yield Portfolio in December.
We have an average Yield on Cost of over 6%, and we’ve got a Market Return (stock price only) of over 7%.
Our Total Return is calculated based on the dividends received so far.
Which means even if the stock prices don’t move, by the end of December, we should have a Total Return of 13.6% (Market Return + Yield On Cost).
We’re starting with $40,000 invested so far.
If this performance would continue, in 10 years, we’ll have:
More than $112,600 in the portfolio
$6,146 in annual dividend income
A 14.1% yield on cost
That’s if we don’t add any money to the portfolio and only reinvest our dividends.
But we’re investing $5,000 every month.
Watch what happens when we add this and reinvest our dividends.
More than $1.1 million in the portfolio
$60,000+ in annual dividend income
A 9% yield on cost
This is something to look forward to.
Generating more than $60,000 a year for doing absolutely nothing is a big deal.
The snowball effect can be very powerful in a High Yield Portfolio:
You are not convinced yet that dividend-paying stocks are the way to go?
Read this quote from John Bogle:
“Successful investing is about owning businesses and reaping the huge rewards provided by the dividends and earnings growth of our nation’s – and, for that matter, the world’s – corporations.”
And if you aren’t convinced after reading it, please read it again.
Adding to the Portfolio
Let’s add to three existing positions that I think offer good value today.
See the Full Portfolio
If you want to see the High Yield Portfolio, upgrade your subscription right here:
One Dividend At A Time,
-TJ
Used sources
Interactive Brokers: Portfolio data and executing all transactions
Fiscal.ai: Financial data
Disclaimer
As a reader of Compounding Dividends, you agree with our disclaimer. You can read the full disclaimer here.