How dividend paying stocks will make you rich fast?

Dividend paying stocks

Now you must wonder how I can earn the first million of my life through, which is a good question. This article will provide you with all the essential tips and tricks used by the world's most prosperous personalities.

After reading this article, you will be confident about your self just like Warren Buffet. At the time in his life when he had no penny, he said:


 He said so because he was aware of the secret of Compounding in dividend stocks.

How Compounding works:

Here we will learn the force of compounding with small examples and how you can apply it in the real stock market.

Let's take an example that after the interview, you got selected for a job. When it comes to the salary, the company's HR makes an offer that instead you can earn 100 thousand a month or we will pay you 1 cent per month. But the main thing is you will it double each month. Like you will get one cent in the first month, two cents in 2nd month, four cents in 3rd month, and the chain continue. Isn't it amazing?

Which option will you choose?

If you choose the first option, you will earn 3.6 million in three years, which is not bad. However, do you know you will earn 68 million in three years? Surprised? What do we learn through this example? You are getting the lowest money in the initial month but the highest income in the last month.

Real Example of Compounding in Stock Market:

Compounding in Dividend Paying Stocks

An Indian invested ten thousand in one dividend paying stock company "WIPRO" which is now worth seven hundred crores. It all happened when he purchased 100 shares in a new company from ten thousand. Then over time, the value of the shares and the number of claims were compound in the stock market. With this, at the end day, that Indian had 256,00,000 shares, but he had bought only 100 at the start. Now the value of each share is around about RS 350.

                        350 x 256,00,000 = Rs 70,000,000 (Approx)

This is the power of Compounding, which helps you earn crore with a bit of investment. Can you guess at what rate the acquisition of 10,000 has grown? According to a chart, this investment has grown at the rate of 41 percent CAGR. 

Dividend investing is a technique that provides investors with dual areas of potential profit: monthly dividend payouts and financial asset growth over time. Investing in dividend stocks may also be attractive to investors seeking lower-risk investments.

Last year “Wipro” paid only Rs. 1 dividend per share, which is equal to 0.37 percent Dividend Yield. However, this Indian investor received 2 56,00,000 dividends within a year. But we are not counting the dividend the investor received in his forty years of investment. No doubt it's a rare example. Since it is not easy to earn 40 percent long-term in the market. But I am just trying to help you understand the power of Compounding. If you get an dividend of 15%, you can quickly become financially independent after twenty years. But if we take this 15 to 10 %, it will make a substantial difference lets see how. 

According to Elbert Einstein:
Compounding is the 8th wonder of life. Those who understand it earn it. Those who don't understand it will pay it

Now you have the bulk of information about the compounding in dividend paying stocks; it's time to invest some money and become financially independent. 

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