I was just curious and thought about modeling a 10,000 portfolio and seeing what kind of dividends it would spin off for reinvestment.... and then I took a look at one high yielder - ANNALY CAPITAL MANAGEMENT (NLY) and thought --- WHAT IF a guy just bought 10,000 worth of that....
$10,000 would buy 583 shares paying .57 per quarter... $332 per quarter -- so the first quarter you'd buy 19 more shares now you have 602 shares - second quarter dividend would be 602 shares @ .57 which would buy 20 more shares -- so third quarter would be 623 shares @ .57 per share and would buy 20 more shares...for a total of 643 shares -- fourth quarter would buy 21 shares for a total of 664 shares... so now you have a 10 percent increase in shares and you can see how in just one stinky year this is starting to snowball...
So without all the typing here's 2nd year
22 shares
23 shares
23 shares
24 shares
Now in year two you have 756 shares YEAR THREE you're adding 100+ shares!
Okay -- my fingers are worn out just thinking about it.
