This Can Make a $1M Difference in Your Portfolio
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There are two things I can tell you right now that will boost your returns significantly over the long term.
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- Invest more every year (duh)
- Re-invest your dividends in your Index Funds,
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If you are not automatically re-investing dividends you are missing out on an amazing opportunity.
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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.
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The blue line shows the portfolio value with dividends reinvested, while the orange line represents the value without reinvesting dividends.
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The gap is staggering, showing how reinvesting dividends unlocks the power of compounding.
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Now letโs 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.
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Without reinvestment? It only grows to $850,000.
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The best part? Itโs effortless.
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All you have to do is check a box and let the dividends do the heavy lifting.
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So hereโs your reminder: If youโre not reinvesting dividends, you could be making a multi-million dollar mistake over the long term. Donโt miss out.