This Can Make a $1M Difference in Your Portfolio
There are two things I can tell you right now that will boost your returns significantly over the long term.
- Invest more every year (duh)
- Re-invest your dividends in your Index Funds,
If you are not automatically re-investing dividends you are missing out on an amazing opportunity.
Here is an example:
This chart illustrates the difference dividend reinvestment can make in an S&P 500 index fund, starting with just $10,000 in 1990.
The blue line shows the portfolio value with dividends reinvested, while the orange line represents the value without reinvesting dividends.
The gap is staggering, showing how reinvesting dividends unlocks the power of compounding.
Now let’s crank up the stakes:
This next chart demonstrates what happens when we start with $100,000 instead of $10,000. With dividends reinvested, the portfolio soars to over $2.25 million.
Without reinvestment? It only grows to $850,000.
The best part? It’s effortless.
All you have to do is check a box and let the dividends do the heavy lifting.
So here’s your reminder: If you’re not reinvesting dividends, you could be making a multi-million dollar mistake over the long term. Don’t miss out.