How to Get Rich “Doing Absolutely Nothing”

Drip, drip, drip… [TradeSmith Daily]( How to Get Rich “Doing Absolutely Nothing” By Lucas Downey, Contributing Editor, TradeSmith Daily A year ago this week, something extraordinary happened. On Nov. 30, 2022, OpenAI released ChatGPT, an artificial intelligence (A.I.) chatbot that gives detailed responses to user prompts. I’d argue it’s one of the most groundbreaking A.I. tools ever released. And one public company allows you to invest alongside this megatrend: Microsoft (MSFT). Microsoft began a public partnership with OpenAI earlier this year worth over $10 billion, making them the closest thing to investing in the company behind ChatGPT. Microsoft is a savvy company, and history shows it’s an even savvier investment. That’s why, to celebrate the one-year anniversary of ChatGPT, I’m going to share my personal investment journey with Microsoft that began in 2017. I tell this story to demonstrate why reinvesting dividends is the easiest way to dependably grow your wealth. It’s so simple, anyone can do it. All it takes is a bit of time and patience. Here’s my real-life example of how a $7,208 investment ballooned into a $40,000 windfall… RECOMMENDED LINK [The #1 Bubble-Avoiding Play for 2024 (That Could Also Lead to Windfall Profits)]( A lot of folks are looking ahead to 2024 and asking how to make it their best year financially. But many of them have zero idea about the bubble they accidentally invested in. This bubble is going to burst soon. Getting out early could be the difference between big profits and dropping a socioeconomic class. If you’re looking for the chance to add huge sums to your account in 2024 by ringing up one win after another... I recommend giving Jason Bodner’s 3-step plan a hard look. [You can find out about the scheduled cash bubble pop here](. GOAT and DRIP As investors, we are fortunate to have the greatest investor of all time teach us how to create immense wealth. I’m talking about the Greatest of All Time, the GOAT, Warren Buffett. He famously once said, “My wealth has come from a combination of living in America, some lucky genes, and compound interest.” As it relates to the latter, he’s exactly right. The effect of compounding on your portfolio will do wonders. To prove it, let’s walk through my Microsoft investment made back in June 2017. Back then, shares were trading at roughly $71. As of today, those shares are now valued at $377. Yahoo Finance That’s a beautiful chart pointing up and to the right. It’s a gain of 430%. Still, 430% isn’t enough to turn $7,208 into more than $40,000. To fully understand the power of compounding, take a look at the “D” signals in the lower frame of the chart. Each of these represent a dividend Microsoft paid to investors, including myself, every quarter. Think of dividends as a share of profits paid in cash to people who do one simple thing… hold shares of the stock. And to supercharge your stock returns, you should buy more shares of the stock with each and every dividend payment. Brokerages call this a Dividend Re-Investment Plan (DRIP), and it’s essential to your wealth-building strategy. DRIP unveils the magic of compounding. Each quarter that you buy more shares, not only is your income compounding… but your position grows, benefitting from capital gains… and you keep your cost basis lower. Let’s look at all of my dividends from Microsoft to prove this point… RECOMMENDED LINK [This A.I. “oracle” nail prices predictions on over 3,000 stocks — 30 days in the future]( What if you could know the price of every stock 30 days in the future? It would give you a HUGE advantage — and make investing in the stock market a whole lot calmer. That's why we built An-E, which predicts prices on over 3,000 stocks — 30 days in the future — with jaw-dropping precision, nailing predictions sometimes within seven cents! But how does An-E hold up to the ultimate test on Wall Street? [Click here to see the shocking results]( The Compounding Effect: An Extra Three Grand Back in June 2017, Microsoft paid a quarterly dividend of $0.39 per share. At the time, my initial investment was 48 shares, paying me $18.72. A couple of months later, I beefed up my position to a round 100 shares of MSFT, spending a total of $7,208.60. Starting in 2018, Microsoft raised its dividend to $0.42, which is when I made the smart decision in December to begin reinvesting my dividends. As you can see below, on Dec. 11, 2018, my first dividend payment was $46 (the “Cost Basis Total” column), which purchased 0.421 shares of MSFT. As time has gone on, you’ll note how each quarter’s dividend payment has increased simply due to owning more shares every quarter and the fact that Microsoft raises its dividend each year: The first dividend reinvestment was $46 and my last reinvestment was $71.65. It may sound tiny, but those small investments start to add up. My initial purchase of 100 shares has now grown to 105.576 shares by doing absolutely nothing. With Microsoft’s last price of $377, this puts the total investment at nearly $40,000. If I hadn’t reinvested my dividends, my position would be about $37,000 instead. An extra three grand! Not bad if you ask me… This is why I consider reinvesting dividends as the easiest get-rich strategy there is. Even little old ladies like [Grace Groner turned $180 into $7 million]( by using this exact strategy. With dividend investing, tiny seeds become mighty trees before our eyes. As for how to start reinvesting your dividends, log in to your brokerage and look for the DRIP options… Or, simply call your broker and ask about it. Hopefully my story empowers you to begin your own wealth journey with strong dividend stocks. And maybe some of you have stories of your own… Stories we’d love to hear. Do you have a powerful dividend reinvesting story? Just send an email to feedback@TradeSmithDaily.com and we’ll look to share it with your fellow readers. Have a great week… and keep on reinvesting. Regards, Lucas Downey, Contributing Editor, TradeSmith Daily P.S. You may know that I'm good friends with Jason Bodner, editor of Quantum Edge Pro and Power Trends. If you’re familiar with Jason, you know he’s a very optimistic, but levelheaded guy. He’s made a lot of money being right about the stocks he sees Big Money flowing into. At the same time, he isn’t blind to risk — far from it. That’s why [this latest message from Jason]( really caught my attention. Jason is warning of a $6 trillion financial bubble that could pop as soon as Dec. 13. He’s urging investors to [unwind an incredibly popular money move]( from the past couple years… and do something entirely different than you might expect. Jason doesn’t normally issue warnings like this. It’s not in his nature. That’s why we should pay very close attention to what he says. Make sure you [hear Jason’s urgent message]( as soon as possible, and especially before Dec. 13, then act accordingly. Get Instant Access Click to read these free reports and automatically sign up for research throughout the week. [25 Doomed Blue Chip Stocks]( [3 Stocks to Build Your Wealth in 2024]( [Download now on the Apple Store]( [Get It On Google Play]( [Customer Support: 866.385.2076](tel:+866-385-2076) | support@tradesmith.com [Request Customer Service](mailto:support@tradesmith.com) ©TradeSmith, LLC. All Rights Reserved. You may not reproduce, modify, copy, sell, publish, distribute, display or otherwise use any portion of the content without the prior written consent of TradeSmith. TradeSmith is not registered as an investment adviser and operates under the publishers’ exemption of the Investment Advisers Act of 1940. 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