Re-invest your dividends

[NickFitz]

What if the bloke had bought a dozen BTL properties instead and then continued to buy more on the back of the income he had received in rents?

They would all have been destroyed in the Blitz.

HTH.

[Churchill]

Indeed.

And I can't remember what that was...

That's your amazing memory trick gone for a burton then, eh?

[RightLaugh]

Might be 2 years wages...

My great grandfather bought 2 houses for £600... can't imagine how.

They were compulsory purchased in the 70s & my great aunt got £1200 for them...

We're talented with money in my family.

so you've only got a talent in 1 thing then.

[Pinto]

£100 in 1899 was a fair whack, I presume.

[Bagpuss]

The Motley Fool is only for fools though, i.e. those that have no financial savvy at all. A place for everything though eh.

That's a bit harsh, some very clever people post on that site. Sounds like you're confusing it with moneysaving expert

[ChimpMaster]

Last bit doesn't sound right to me. Am I missing something?

No it's correct. It's simply implying that compound interest works its wonders over a long period of time.

And of course the figure is adjusted for inflation so.

The Motley Fool is only for fools though, i.e. those that have no financial savvy at all. A place for everything though eh.

[King Cnvt]

What if the bloke had bought a dozen BTL properties instead and then continued to buy more on the back of the income he had received in rents?

[Not So Wise]

Last bit doesn't sound right to me. Am I missing something?

Not my area of expertise but i would say you are forgetting Inflation

To have the same purchasing power of £100 in 1899 you would need about £8500 in 2007

So while that £100 worth of shares would be aprox £17000 now, in real terms the purchasing power has only doubled.

[Gonzo]

If your grandfather had bought £100 in shares in 1899, and the dividends received had been re-invested in more shares, the pot would now be worth £25,022 adjusted for inflation. But without dividends, that original £100 investment would now only be worth just £213 in real terms.

Last bit doesn't sound right to me. Am I missing something?

If my Grandfather had brought £100 in shares in 1899 it would have been something of a miracle, since he wasn't born until 1920.

Does depend on the market that you are in though, they like their dividends in the UK, this is not true in every country. In others it is more common to reinvest profits in the business and the dividends can be a rarity.

[sasguru]

Aye, the number e is amazing.

[Bagpuss]

Just got this e-mailed from fool.co.uk

Dividends make a huge difference. Here’s another example from Barclays. If your grandfather had bought £100 in shares in 1899, and the dividends received had been re-invested in more shares, the pot would now be worth £25,022 adjusted for inflation. But without dividends, that original £100 investment would now only be worth just £213 in real terms.

Last bit doesn't sound right to me. Am I missing something?

You're finding Compounding, Confounding that's Astounding


I'll get me coat

[kingshuk]

Just got this e-mailed from fool.co.uk

Dividends make a huge difference..... Am I missing something?

Yes - the grandfather

[RightLaugh]

Just got this e-mailed from fool.co.uk

Dividends make a huge difference. Here’s another example from Barclays. If your grandfather had bought £100 in shares in 1899, and the dividends received had been re-invested in more shares, the pot would now be worth £25,022 adjusted for inflation. But without dividends, that original £100 investment would now only be worth just £213 in real terms.

Last bit doesn't sound right to me. Am I missing something?