What the Mainstream Media Won’t Tell You About Investing

How to collect dividend yields up to 10% … 25% … even 50%.

| More on:
The Motley Fool

Why isn’t anyone talking about the most spectacular dividend in Canada?

I’m talking about a way to collect dividend yields up to 10% …  25% … even 50%, paid by honest Canadian businesses. This is an income stream so big and safe, you could quite literally live off of it.

Thousands of ordinary investors are using this strategy to build wealth in the stock market, even though they don’t have PhDs or MBAs. However, you will never hear about it from your stock broker — and you will almost certainly never read about it in the mainstream media.

Why isn’t anybody talking about this?

Let me tell you some hard facts …

Most newspapers are in debt to a bank from the day they open. Also, like every television station in the world, business channels are financed by commercials. Thus, every financial journalist must obey the cardinal rule: Never anger the advertisers.

The next time you turn to your favourite news network, watch the commercials closely. Every other advertisement is for a bank, brokerage firm, or financial advisor.

Brokers make their money every time you buy or sell a stock. Do you think they really care about your retirement goals? If it interferes with their commissions, probably not.

How about bankers and advisors? No, they’re no better. Most would rather try to sell you a bunch of high-fee financial products.

Is it any wonder why the financial media is crowded with programs like “Quick Money”? Because of how it’s funded, the press wants to promote the idea that you have to be constantly buying and selling stocks to build wealth.

But as I’m about to show you, that idea couldn’t be further from the truth.

The secret “they” don’t want you to know about

The trick to building real wealth in the stock market is simple: Buy wonderful businesses that regularly reward shareholders through growing dividends… and hold for the long haul.

It’s common sense, right? But given enough time, even a tiny income stream can become a raging river of cash flow.

Enbridge (TSX: ENB)(NYSE: ENB) is a great example of the power that tiny dividend hikes can have on a stock’s yield with time. Over the past decade, the company has increased its dividend at a 12% compounded annual clip. If you had bought and held the stock over that period, the yield on your original investment would be 11.5% today.

What if we were to play out this hypothetical investment for another 10 years? Assuming Enbridge can continue to increase its dividend at a 10% compounded annual rate, the yield on your original investment would grow to 30% by 2024. That’s the power of compound growth.

There are plenty of other examples of this concept in action. Take utility company Fortis (TSX: FTS)(NYSE: FTS), for example. Since 1993, it has increased its dividend more than threefold. If you had bought and held the stock over that time, your yield on cost would be almost 21% today.

The Toronto Dominion Bank (TSX: TD)(NYSE: TD) has done even better. Over the past two decades, the company has increased its payout at a 12% compounded annual clip. If you owned the stock for that entire period, the yield on your original investment would be 41% today.

Here’s what the financial media won’t tell you

Nobody in the financial media is going to tell you how to really make money in the stock market because the only one who benefits is you. However, as the examples above demonstrate, the secret to building wealth is to buy wonderful businesses and hold them for the long haul.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robert Baillieul has no position in any stocks mentioned.

More on Investing

Dividend Stocks

2 of the Best Dividend Stocks to Buy Before They Start to Recover

These dividend stocks offer superior deals for those seeking long-term passive income, but these prices certainly won't last forever.

Read more »

Dividend Stocks

Algonquin Insiders Are Loading Up on AQN Stock – Should You Follow?

Algonquin Power and Utilities (TSX:AQN) insiders poured millions into AQN stock last week. Share valuation multiples seem compelling.

Read more »

Young adult woman walking up the stairs with sun sport background
Stocks for Beginners

New Investor? Buy These 2 Growth Stocks

These two growth stocks are perfect if you want superior growth in the near future but a long-term hold that…

Read more »

Man data analyze

A Passive-Income Triple Play: 3 Top TSX Stocks to Buy Together

These two top Canadian dividend stocks provide long-term investors with much-needed stability and passive income right now.

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

TFSA: 2 Stocks To Earn Passive Income Even in a Recession

Investors are coping with 2023 recession fears differently. Some are investing in stocks that can create long-term passive income.

Read more »


2 Top Canadian Retail Stocks That Could Get a Holiday Boost

Here's why Canadian Tire (TSX:CTC.A) and Canada Goose (TSX:GOOS) are two top Canadian retail stocks to buy right now.

Read more »

Cogs turning against each other
Dividend Stocks

3 Stocks You Can Confidently Own in an Upside-Down Market

Although many stocks have lost major value this year, here are three high-quality companies you can confidently own in this…

Read more »

Increasing yield
Dividend Stocks

2 Ultra-High-Yield Dividend Stocks on Sale Today

Besides their ultra-high yields, here are more factors that make these two of the best Canadian dividend stocks worth buying…

Read more »