Earning $417,792 from just one stock?

Wal-Mart shares multiply

Wal-Mart became a public company on October 1, 1970 and started issuing shares at $16.50 each. Since then the company has had eleven 2-for-1 stock splits. Basically this means that if you purchased 100 shares in 1970, today you would own 204,800 shares:

1970: 100 shares

1971: 200 shares (2:1 split on 6/11/71)

1972: 400 shares (2:1 split on 4/5/72)

1975: 800 shares (2:1 split on 8/22/75)

1980: 1,600 shares (2:1 split on 12/16/80)

1982: 3,200 shares (2:1 split on 7/9/82)

1983: 6,400 shares (2:1 split on 7/8/83)

1985: 12,800 shares (2:1 split on 10/4/85)

1987: 25,600 shares (2:1 split on 7/10/87)

1990: 51,200 shares (2:1 split on 7/6/90)

1993: 102,400 shares (2:1 split on 2/25/93)

1999: 204,800 shares (2:1 split on 4/19/99)

Suppose you purchased 100 shares in 1970, your initial investment would have cost you: 100 shares x $16.50 = $1650

Worth over $19.9 million today

Your $1650 investment would be worth over $19.9 million today: 204, 800 shares x $97.48 = $19,963,904

Dividends are even better

Today the annual dividend per share for Wal-Mart (WMT) is $2.04. If you had invested $1650 in Wal-Mart in 1970, today you would receive $417,792 in dividends each year: 204,800 shares x $2.04 dividend = $417,792

Dividends continue to grow

Wal-Mart has also increased its dividend for more than 44 consecutive years; therefore it is highly likely that the $417,792 would continue to increase in the future. Not a bad way to earn $417,792 annually, think of all the money you’ll save without having to drive to a job every day  🙂

How should you invest?

This example shows you the power of holding a quality dividend paying stock for the long-term. This example is not meant to dissuade you from investing, don't think you had to start in 1970, you could have started 5 or 10 years ago. Or you could start today. Focus on buying quality dividend paying stocks when they are undervalued, then hold for the increasing dividends.

When it comes to investing the Simply Investing way, patience is very well rewarded!

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