Become A Millionaire By Investing In This Monthly-Paying REIT
- Today, I decided to provide you with an article to highlight the ultimate power of compounding concept, both literally and figuratively.
- As an investor in EPR, you are actually benefitting from the powerful effects of the “snowball effect”.
- While we would not recommend owning just one REIT, we do consider EPR a quality name to hold in the millionaire-maker portfolio.
The key to building wealth is the power of compounding, the snowball effect that happens when your earnings generate even more earnings. You receive interest not only on your original investments but also on any interest, dividends, and capital gains that accumulate — so your money can grow faster and faster as the years roll on.
Thanks to the power of compound interest (the investing magic that allows investment earnings to earn interest of its own), time is the most powerful variable an investor has on his or her side. The chart below from JP Morganshows how one saver (Susan), who invests for only 10 years early in her career, ends up with more wealth than another saver (Bill), who saves for 30 years later in life.
By starting early, Susan was able to better take advantage of compound interest. Chris, the third saver profiled, is the ideal: He contributed steadily for his entire career.
Today, I decided to provide you with an article to highlight the ultimate power of compounding concept, both literally and figuratively. First, let’s start with the “figurative” (metaphorical) approach: EPR Properties (EPR) owns properties with an “experiential” orientation, which means the properties have enhanced customer experiences, such as ski resorts:
So yes, as an investor in EPR, you are actually benefitting from the powerful effects of the “snowball effect”.
Now, in regards to the literal (or exact) example related to the power of compounding, take a look at EPR’s performance since the company listed shares in 1997:
Not bad eh?
If so, you may have recognized the massive discount with EPR and our STRONG BUY recommendation. As subscribers to the Forbes Real Estate Investor know, our New Money Portfolio has returned 16.5% since mid-May and EPR is our second best performer, returning over 29%.
But wait, I’m not suggesting that EPR is a get rich scam, I am providing you with a valuable way to get rich by utilizing the concept of the time value of money. Reinvesting in more of these dividend-paying shares compounds investor returns because the increased number of shares will consistently increase future income from dividend payouts, assuming steady dividends.
Investing in dividend growth stocks on top of reinvesting dividends adds another layer of compounding to this strategy that some investors refer to as “double compounding.” In this case, not only are dividends being reinvested to buy more shares but these dividend growth stocks are also increasing their per-share payouts.