Imagine a person invested Rs 1,800 in Yr 2000 to buy 10 stocks of ABC company at Rs 180 per stock. (This is an educational content about the power of long term investing and power of Dividends.. not a buy or sell call).

If he got Rs 55 in Yr 2000… then in 2015 he gets Rs 1,900… meaning he gets his ENTIRE INVESTMENT as a dividend EVERY YR as long as the company performs similarly… based on the track record… it will EXPLODE over next 15 yrs at same rate of profit.

If he had invested Rs 1 Lakh… he would have got Rs 1 Lakh back every year as dividend after 15yrs.

Multiply it by how much you could have afforded to invest in Yr 2000.

Thats the power of dividend… earn in a very BORING WAY to make money… REAL PASSIVE MONEY… in spite of all the ups and downs in stock market.

DIVIDENDS opens another source of Income…and it keeps growing every yr as long as thr company is growing so you can invest that back… very powerful.

BANK FD INTEREST RATES vs DIVIDENDS:

1. Bank Fixed Deposit rate has fallen from 10.50% to 6.05%.. and would have fallen much more if not for the war in Iran. Interest On Rs 100 in 2000 would have doubled it to just Rs 400 in 15 yrs…(doubling every 7.5 yrs… max).
2. Mthly and Qtrly payment of Interest is even lesser… to compare with dividend you need to compare Qtrly payouts… 3% for FD vs 1% for Div… a difference of 2%
3. Since payouts are Qtrly… Dividends are more liquid than FDs.
4. If you need money and break FD before term is over you will get EVEN LESS… no such thing happens in Dividends.
5. There is a huge difference between a 1% Div today on Rs 100 Share… and 1% div on Rs 1,000 Share 15 yrs later of the same company… its payout grew 10 times its div 15 yrs ago… meaning 15yrs later its equivalent to 10%.
6. Also in 10-15 yrs a company will grow much more start new subsidary or sister companies each earning more profits for parent company.
7. In 10-15 yrs the company will grow and even issue Bonus and stock splits which increase your Div Amount by a big margin… meaning a 100 shares can become 200 to 500 shares… although the share price falls by that much… usually over a period of time it comes back to earlier levels.
8. Even if share price falls the company will continue paying dividends… as long as the company is making profits… because dividends are paid out of profits.
9. Sometimes a cash rich company might give dividend even if it had a loss. But such behaviour is only for short term.
10. But if the company is in loss there will be no dividends… but such loss making companies should be avoided if future profits are going to be bleak.
11. If company is in loss it could shut down and you could loose the investment in it.

THERE IS ABSOLUTELY NO COMPARISION BETWEEN BANK FD RATES AND DIVIDENDS.