7 Secrets to Successful Income Investing

Secret #4 –
Re-Invest to Get Rich

Some income investors need their dividends and interest to survive on. If you can get by without spending your take, channel that money back into more income-rich investments. Re-investing harnesses the true power of compounding, more affectionately known as the Eighth Wonder of the World.

For example, let’s say you bought $10,000 of stocks in the S&P 500 on December 31, 1952 and made the necessary adjustments over the next 50 years to mimic the index. At the end of 2002, the portfolio would have grown to $331,100, multiplying your money 33 times.

Now let’s assume you reinvested your dividends by purchasing additional shares. By December 31, 2002, your portfolio would have skyrocketed to $1,901,700. Reinvesting would have created almost six times more wealth. Now that’s a secret worth sharing!

NEXT – Secret #5