Re: Billionaires = Leading Cause of CC
Posted: Fri 11 Jan 2019, 13:10:35
Newfie wrote:If they have, they haven’t spent it.
If you bought Apple at $10/ share, but now it’s trading for $200/share you have greatly increased your prospective wealth. But all you invested was $10. The other $190 is just sitting there. And if Apple shares drop, that prospective wealth vanishes. But it’s not like you invested $200 and it’s doing something.
I've never directly owned a share of AAPL, so just posting as a stock market observer.
That $10 (or $200) is collecting a nearly $3 a year dividend, which has been increasing roughly annually at a roughly 10% clip, so there's that.
People tend to forget that, on average over time, big companies tend to have roughly half their total appreciation come from dividends. Dividends that arrive as cash flow that can be spent, saved, reinvested elsewhere, etc. Dividends that tend to grow over time.