Albert Einstein—famous for his equation E=MC2 and the 1921 recipient of the Nobel Prize in Physics, along with being widely regarded as one of the most influential scientists of all time— stated, “compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t… pays it.”
By investing in DRIPs, sponsored by great businesses like The Coca Cola Company (KO), you can take advantage of the miracle of compound interest, the Eighth Wonder of the World! There were only seven wonders chosen in ancient times, which were considered to be the most remarkable creations of the human world.[1] Einstein added the eighth, compound interest!
By investing in Dividend Champions/Aristocrats that are S&P 500 Companies that have paid and raised their annual dividends for more than 25-years— through COVID-19 lockdowns, recessions, depressions, wars, and stock market declines — you are able to take advantage of the miracle of compound interest, which is also key to staying ahead of inflation.
Here’s what can happen by using our DRIP strategy. According to Finance Professors Rubin and Spaht, “For those investors who adopt ten and fifteen year horizons, the dividend investment [DRIP] strategy will lead to financial independence for life. Regardless of the direction of the market, a constant and growing dividend is a never-ending income stream.”
The following Dividend Champions/Aristocrats are priced right:
· The Coca Cola Company (KO) - $59.53, yield 3.23%, Paid/Raised 61-Years (Dividend King)
· Exxon Mobil Corp (XOM) - $105.84, yield 3.64%, Paid/Raised 41-Years
· Kimberly-Clark (KMB) - $122.90, yield 4.03%, Paid/Raised 51-Years (Dividend King)
· PepsiCo Inc (PEP) - $164.59, yield 3.06%, Paid/Raised 48-Years
· Archer Daniels Midland (ADM) - $54.24, yield 3.77%, Paid/Raised 46-Years
· 3M Company (MMM) - $91.86, yield 6.56%, Paid/Raised 62-Years (Dividend King)
· Walgreens Boots Alliance Inc (WBA) - $21.49, yield 4.70%, Paid/Raised 48-Years
· Air Products & Chem (APD) - $236.00, yield 3.03%, Paid/Raised 39-Years
· Clorox Company (CLX) - $152.08, yield 3.13%, Paid/Raised 46-Years
· Enbridge Inc (ENB) - $34.80, yield 10.63%, Paid/Raised 26-Years
· Int’l Business Machines (IBM) - $188.20, yield 3.59%, Paid/Raised 28-Years
· Medtronic PLC (MDT) - $83.60, yield 3.30%, Paid/Raised 46-Years
· T Rowe Price Group Inc (TROW) - $113.48, yield 4.38%, Paid/Raised 37-Years
· Bank OZK (OZK) - $43.35, yield 3.47%, Paid/Raised 27-Years
· Enterprise Products Partners (EPD) - $27.75, yield 7.50%, Paid/Raised 26-Year
· AbbVie Inc (ABBV) - $178.91, yield 3.52%, Paid/Raised 13-Years (some commentators consider ABBV a Dividend King because it is a spinoff of Abbott Labs, which paid and raised its dividends for over 50-years)
If you have enough investment capital to purchase 100 shares of these sixteen great businesses (DRIPs), you should do so. On the other hand, let’s say you are just starting out and only have $6,500 to invest in DRIPs. At the prices listed above, you might consider purchasing twenty-five (25) shares of each of the following companies:
1) The Cola-Cola Company (KO) $ 1,500 Dividend King
2) Exxon Mobil Corp (XOM) 2,650 Dividends Paid over 100-Years
3) 3M Company (MMM) 2,350 Dividend King
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$ 6,500
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For more information on how to select DRIP stocks, you should read, The Best Kept Secret to Financial Freedom, Amazon.com: The Best Kept Secret to Financial Freedom eBook : Beard Jr., Robert G.: Kindle Store, and our most recent newsletter, Issue 41, “Great Businesses to Buy Now, available at Newsletters — Jeffersonian Group | Financial Planning & independence.
If you think about it, the only way you can enjoy freedom is if you are actually able to make decisions and act on the basis of your own choices. Did you really choose to work 40 hours per week for most of your life? Are you satisfied with weekends off and 2-to-4 week vacations per year? Some of you may be thinking, I wish I was that lucky, i.e., I wish I had weekends off and a 4-week vacation every year!
To achieve financial freedom, you must acquire assets that pay you passive income that continues to grow each, and every year, and that income must continue to exceed your expenses necessary to maintain your lifestyle. The DRIP strategy to accomplish this goal in 10-to-15 years is explained in, The Best Kept Secret to Financial Freedom. Get it and you’ll be on your way to a new beginning, to financial independence for life!
Dum Spiro Spero—While I breathe, I hope.
Slainte mhath,
Robert (Mike) G. Beard Jr., C.P.A., C.G.M.A., J.D., LL.M.
[1] Of the seven wonders of the world, only the Great Pyramid of Giza (Egypt) remains. The other six were (1) the Hanging Gardens of Babylon (Iraq), (2) the Statute of Zeus at Olympia (Greece), (3) the Temple of Artemis at Ephesus (Turkey), (4) the Mausoleum at Halicarnassus (Turkey), (5) the Colossus of Rhodes (Greece), and (6) the Pharos (Lighthouse) of Alexandria (Egypt). In 2007 a new list of the Seven Wonders of the World was created by a worldwide vote: (1) The Great Wall of China, (2) Chichen Itza (Mexico), an ancient Mayan city, (3) Petra (Jordan), (4) Machu Picchu (Peru), (5) Christ the Redeemer (Brazil), (6) The Colosseum (Italy), and (7) The Taj Mahal (India).