Let's see if this describes your investing strategy during the
past few years:
In 2008, you got out of the
, but only after your retirement account lost 35%. Then, even after
the market started to rally, you just couldn't pull the trigger to
get back in. The memory of those sleepless nights was still too
But sitting on the sidelines hasn't been without pain. As the
market rebounded, your money-market fund paid an averaging between
0.05% and 0.07% in the years after the
, meaning you were on pace to double your money in roughly 1,000
years. Savings and CD rates were only slightly better.
If this describes what you went through, then don't worry. You're
not alone. As of mid-April, more than $2.5 trillion dollars sat in
stingy yielding money-market
But it doesn't have to be that way. I have a way to earn
considerably more on your cash...
Millions of investors, one simple solution
In the past I asked some of my
subscribers about their investing experience over the past few
Turns out, many of them were in the same boat. They used words like
"burned," "scammed," "devastated," and "lost my butt" to describe
their fallout from the dreadful 2008 market. Two readers
specifically mentioned taking a 50% hit on their retirement
accounts. And they complained about the "measly" yields their
sidelined cash was earning.
But there was some good news.
I was happy to see that many people said the strategy behind
The Daily Paycheck
gave them the confidence to finally get back in the market. And I
was truly impressed by their results so far. (One subscriber told
me he earned $4,004.14 in dividends in 2010. Another said he was up
Now, no strategy or investment is without risk. But the "Daily
Paycheck" strategy focuses on solid, dividend-paying securities to
provide steady income streams. And if you have just a little time
on your horizon, then reinvesting those dividends can grow the
streams into rivers.
For instance, my readers who invested in the conservative
Reaves Utility Income Fund (NYSE:
received 27% more income in April 2012 than they did in December
2009 -- just by reinvesting the dividends. Including
, UTG had total returns of 23% since I first added it my portfolio
in December 2009 ... and that's on a utility fund.
Meanwhile, the income my subscribers will receive this month from
one of my newsletter's master limited partnerships (MLPs) is 25.5%
higher than it was in December 2009. So far, the total returns from
that investment are over 60%.
The market rally might be fizzling, but that won't stop
This year, the market has been an up and down rollercoaster. And
maybe you're worried that you waited too long to get back in. But
the beauty of a strategy that uses
reinvestment is that your income continues to grow, even when the
The chart to the right shows your potential annual income stream
assuming a $20,000 initial investment in securities with an average
of 7%. Thanks to the power of reinvested dividends and dividend
growth, after 10 years your portfolio could be generating $5,299 in
annual income -- that's 278.5% more income when compared to an
investor who doesn't reinvest. In fact, it could be generating an
of 26.5% based on your initial $20,000 investment.
If you have even a little bit more time on your investment horizon
(or more money to invest, or additional dollars to invest each
year), then the numbers only get better. And keep in mind that
these are conservative estimates. They don't include one penny of
No one should have to wait 1,000 years to double their money. And
now may not be the best time to plow all your money into high-risk
stocks. But there is another alternative.
Action toTake-- >
Reinvesting your dividends may not be as tempting as the
get-rich-quick schemes you read about. To some extent, it is the
tortoise of the market. But after watching what can happen to the
hares, you may want to consider a strategy that gets you across the
-- Amy Calistri
Amy Calistri does not personally hold positions in any
securities mentioned in this article. StreetAuthority owns shares
of UTG in one or more if its real-money or investment