How to Earn Rs 13,08,672 From Just One Stock?
Have you ever considered getting a deposit of Rs 13,08,672 per year in your bank account by doing nothing?
Yeah. It’s possible.
And in this post, we’ll discuss how a long-term investor can earn over Rs 13,08,672 per year just by purchasing good stocks at a decent price and holding it for a very long time horizon.
Infosys became public in February 1993 and started issuing its shares at Rs 95 per share.
Since then, this company has given seven bonuses and one stock split. In simple words, it means that if you had bought 100 shares of Infosys in 1993, today you would own 51,200 shares.
Now, let us analyze its bonuses & splits for the last 25 years:
1993: 100 shares
1994: 200 shares (1:1 bonus on 30/06/1994)
1997: 400 shares (1:1 bonus on 18/06/1997)
1999: 800 shares (1:1 bonus on 25/01/1999)
1999: 1,600 shares (2:1 split on 30/11/1999)
2004: 6,400 shares (3:1 bonus on 13/4/2004)
2006: 12,800 shares (1:1 bonus on 14/4/2006)
2014: 25,600 shares (1:1 bonus on 10/10/2014)
2015: 51,200 shares (1:1 bonus on 24/4/2015)
Suppose you purchased 100 shares in 1993.
Your initial investment would have cost you: 100 shares x Rs 95 = Rs 9,500.
Today, the market price of one share of Infosys is Rs 1,181.
Net Appreciated Worth = Rs 1,181 * 51,200 = Rs 6,04,77,200
Worth over Rs 6.04 Crores today.
Your small investment of Rs 9,500 would be worth over Rs 6.04 Crores in 25 years.
Don’t forget the Dividends…
In the last 25 years, Infosys has given decent dividends to its shareholders. For simplicity, let’s calculate the dividends earned for the last two years only.
For the last two years, here are the annual dividends are given by Infosys to its shareholders:
2016: Rs 24.26
2017: Rs 25.56
Assuming that you bought 100 shares of Infosys in 1993, it would have turned out to be 51,200 shares by now.
Now, let us calculate the annual dividends.
Dividend (2016) = Rs 24.26 * 51,200 = Rs 12,42,112
Dividend (2017) = Rs 25.56 * 51,200 = Rs 13,08,672
Dividends worth Rs 13,08,672 in just an year.
The best part:
Even if you do not sell your shares, you can enjoy the dividends for the rest of your life. Plus capital appreciation on your assets too…
Conclusion: Invest for the long-term
This is the best example to show you the power of holding good stocks for long term.
Besides Infosys, there are a number of good stocks in the Indian share market which has given even better returns to its shareholder for over decades.
Overall, you can create an amazing wealth if you focus on buying amazing stocks at a decent price and have the patience to hold it for the long term.
Value investing works- may be not in short term, but definitely in the long-term.
(Source: Infosys Website, Annual Reports, Corporate Announcements, Moneycontrol)
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