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Don’t forget to reinvest dividends

This mistake happens more often than you’d think. And this can make a HUGE difference over long periods of time.

What are dividends? Profitable companies often make cash payments, called dividends, to the people who own their stock. This usually happens every quarter. The amount is pretty small, (somewhere between 0.5% and 3% of the company’s stock price) but it adds up and compounds over time.

Usually by default, these dividends will just sit in the cash balance of your account. BUT, you can set it so they are automatically reinvested. That means automatically using that cash to buy more of the same stock, ETF, or mutual fund.

So what to do? Go check your investment accounts and make sure the box is checked for dividends to be reinvested. It takes less than a minute to do this! One minute could make you $400,000 richer.

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.‎

-Vivi & Shane

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Jeremy Circle

Hi, I’m Jeremy! I retired at 36 and currently have a net worth of over $4 million. 

Personal Finance Club is here to give simple, unbiased information on how to win with money and become a multi-millionaire!