The story was picked up by the major news sources a few years ago as a "cute" human interest feature. You might have seen the headlines like "How a Secretary Made and Gave Away $7 Million."
But for me, this wasn't some light news piece. This was a story that resonated deeply with me.
I didn't know Grace Groner, from Lake Forest, Ill. From the stories, she was a woman who lived frugally. Her passing was of interest because her three shares of Abbott Laboratories (NYSE: ABT) grew into more than 100,000 shares through decades of worth roughly $7 million. And while I didn't know Grace Groner, I did know Lillian Calistri.reinvestment. In total, her became
The last time I saw Aunt Lillian was in 1990. I remember that a nephew had the misfortune of addressing her as "Lillian." She promptly looked us all in the eye and said, "Youcontinue to me Aunt Lillian." We were all over 25 years old at the time, but in Lillian's world, adulthood was no excuse for bad manners.
Aunt Lillian taught home nest egg from the 1952 of the family's ice cream business.at Charleroi High School in Pennsylvania. After she retired in the 1950s, she moved to Tucson, Ariz. I remember thinking it was nice that Lillian had been able to live comfortably in her golden years -- aided by a teacher's retirement and a
Here's the estate was worth north of $5 million.. When Lillian died in 1993, her
But there's something else to this story. And it's something that can help you earn larger dividends soon -- helpful if you don't have a lifetime to invest as Aunt Lillian and Grace did.
They may not have realized it at the time, but the women in these stories chose their investments wisely.
Abbott Laboratories, the company Grace Groner invested in, has paid more than 350 consecutive dividends since 1924. If you go back to 1983, adjusted for stock splits, the pharmaceutical paid a of just 1.1%. But since Abbott consistently grew its dividend since then, its latest dividend was $0.56 per share -- 3,485% more than its first payout.
One of Aunt Lillian's investments was International Business Machines (NYSE: IBM). IBM dished out its first dividend in 1962. Since then, the company has grown its dividend by 94,900%.
Neither Abbott nor IBM had a particularly juicy yield at the time these women bought their shares. But they had something equally powerful: a corporate culture dedicated to dividend growth. Throughout Grace and Lillian's lifetime, these companies never cut their dividend. In good economic times and challenging times, these companies found a way to deliver ever-increasing income to their shareholders.
And those extra dividends add up aquicker than you'd think.
In my Daily Paycheck portfolio, I have two classic dividend payers that Iin the same class as Abbott and IBM -- AT&T (NYSE: T) and Altria (NYSE: MO).
If you put $5,000 into AT&T five years ago, you'd have earned a 5.5% yield at the time. That's $275 per investment would be paying $417 a year if you simply reinvested your dividends. That's an 8.3% yield on your original investment.. But today, that $5,000
Altria is an even better story. Right now, the shares pay a solid 5.4%. It's nothing to sneeze at, but thanks to the company's commitment to dividend growth, $5,000 invested just five years ago -- plus reinvested dividends -- is now earning 13.2%, or about $660 every year. That makes for a 144% higher yield in just 5 years.
TheAnswer: It's doubtful most of us will have decades and decades to invest like Grace Groner or my Aunt Lillian. But that doesn't we can't see our dividends grow enormously in a span of just a few short years by simply choosing our dividend payers wisely and then reinvesting the payouts.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.