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Is a dividend of $100 too small to be of any use?
By paullowinvestmentjourney  •  July 7, 2015
someone commented that the rich can snowball their investments and get richer, while the poor find it hard to do compoundation.Not true. Let me illustrate. Say someone invested $2000 in a counter with a 5% yield. So he gets a dividend of $100. He can spend his family on mao shan wang durians, of course. But he can choose to invest this. Just regard the broker fees as a one off fee, remember we are talking about investment for long term basis. As a real example, $100 minus broker fees of $25, gives, $75 left. This can buy 100 shares of a stock with yield of 5% pa worth 75c a piece. Fast forward 30 years...what do we have..? At just 10% compoundation, he could be missing out on $1308!!! Or even more. If i were in that position, I would choose to give up on that mao shan wang....
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By paullowinvestmentjourney
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