Savvy investors understand that the miracle of compounding
accelerates total return, the longer the time frame, the better. I don’t think
there’s a better gift for a graduating grandchild or other loved one than a
gift of a portfolio of dividend-paying stocks including enrollment in the company’s dividend
reinvestment plan. Assuming that the graduate can fund the portfolio, even with
small amounts to start, the portfolio will compound to produce real wealth over
the long term. How much wealth? Millions of dollars, as I’ll demonstrate.
Instead of giving a gift of money that the young person is
likely to spend frivolously, a gift of a five-stock portfolio held in dividend
reinvestment plans, is likely to stay in place and grow over the years. Your
total cost to set up such a portfolio, depending on the price of the stock that
you select, is somewhere around $500. What’s more, there’s a two-fold advantage
to this gift. Not only will it provide a long-term financial benefit to the
graduate, it will give him or her a first-hand experience with a logical
approach to investing.
Continue to read to find out those five companies that
we would include in a long-term portfolio...
Source: Forbes