REINVEST YOUR DIVIDENDS AUTOMATICALLY AND LET COMPOUND INTEREST RAMP UP YOUR RETURNS!
Compound interest is often hailed as the eighth wonder of the world and for a good reason. Its magic lies in the ability to generate earnings not just on the initial investment but on the accumulated interest from previous periods. This financial phenomenon plays a pivotal role in building wealth and is a cornerstone for successful long-term investing.
At its core, compound interest is the interest on a sum of money that is continually reinvested, allowing the investment to grow exponentially over time. Unlike simple interest, which is calculated solely on the principal amount, compound interest takes into account both the principal and the interest accrued.
The real beauty of compound interest becomes evident when time is on your side. The longer your money is allowed to compound, the more significant the impact. Picture it as a snowball rolling down a hill, gradually accumulating more snow. Similarly, your investment grows not just on the initial amount but on the interest earned in previous periods, creating a compounding effect that can result in substantial returns.
The example below shows how an investment from which dividends are paid out (example A) compares with an investment where dividends are reinvested (example B) over a ten-year period. Assume the initial capital investment was R1 000 000, on which the dividend yield is 7% a year and the IRR is 10%:
Example A: Example B:
The AccretivPLUS compounding opportunity.
This option follows on the recent launch of AccretivPLUS Healthcare Portfolio, which is the consolidation of its best, separately listed buildings into a single lower-risk diversified structure.
AccretivPLUS, has launched with a convenient automatic reinvestment option, which is likely to appeal to investors who are currently keeping dormant cash in their wallets (trading accounts).
When investing in AccretivPLUS, an investor is required to sign a subscription agreement, which now also includes the option to select automatic reinvestment of dividends during the term of the portfolio. The magic of compound interest is particularly effective as dividends are reinvested immediately as soon as they are paid after each quarter. If they are invested automatically in real time the investor will earn interest on their dividend immediately the following month until the new issue of shares occurs.
“We find that our investors normally wait for dividends to accumulate and become more significant in their wallets (trading accounts) before considering reinvesting, so we have millions of dollars sitting dormant. This may have made sense when waiting for the next syndicated building to launch but with the new structure you can pump your returns by compounding immediately, "says Justin Clarke, the company COO.
To take advantage and auto reinvest to compound your returns, contact your investment consultant, or simply email support@orbvest.com.
The content being shared by OrbVest is for information purposes only and should not be construed under any circumstances by implication or otherwise as advice of any kind, or as an offer or a solicitation to buy or trade in any commodities, securities, or currencies. Information is obtained from sources believed to be reliable but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are provided. In no event should the content of the information being shared be construed as an express or implied promise guarantee from OrbVest or any of its officers, directors, employees, or other agents that your profits or losses can or will be limited in any manner whatsoever. Any investments made in light of these opinions and/or forecasts expressed or implied herein are committed at your own risk. This below content is for information purposes only and it is the responsibility of each investor to obtain prior independent advice prior to making any investment. Prior performance does not guarantee future performance. The information shared is based on best efforts. OrbVest provides information relating to investments and the buying and selling of securities or investments in real estate, but you should not construe anything as legal, tax, investment, financial, or any type of advice. In the USA, filings are made under Regulation 506C, and the investments are limited to "Accredited investors" only. OrbVest is an authorized financial services provider in South Africa.
