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Investing/Strategies / Drip Investing - The Basics
|Subject: Re: How Do You Know When to Stop??||Date: 9/5/2001 4:51 PM|
|Author: OperaBob||Number: 20467 of 27818|
For the record, OB, I'm 46, so I have slightly less than 20 years till retirement.
I'm 50 so your 20 years to go looks good to me! ;-)
An example of "lump summing" it and just letting the dividends reinvest I've used before:
1982 my parents purchased 500 shares of BCTel at $6 per = $3000 total investment.
Over the next 16 years they just let dividends reinvest and made no further OCPs.
In 1998 they had 850 shares @ $55 per = $46,750
This equals a 19% annual rate of return.
At the same time the 850 shares were paying approx. $1200 /yr. dividend.
This is a 40% return yearly on their original $3000 investment.
This is all without making a single OCP.
That's in 16 years (which is under your 20 yr. time horizon).
But as I said you have to stay on top of things. As you know the telecoms have been having a rough go. BCTel merged with Alberta's Telus to form TELUS and TELUS has been active in reinventing itself as Canada's second national carrier. As there is a lot of uncertainty the shares have fallen to about $25. But the dividend is purchasing 48 more shares per year at the moment. As I don't see TELUS going under I'm quite happy at the moment picking up the extra shares in my own account.
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