Friday, November 20, 2009

dividends = interest!

So, I decided for simplicity’s sake that I would go ahead and look at my dividends as interest. This way I don’t have to change anything around, and to be honest, dividends are interest. It’s the company paying you money for investing in them.

So how do I figure out if it was a smart move to buy mutual funds this year? (Besides the fact that by purchasing more I’ve been able to make up almost all the money I lost). I can compare the interest earned on my CD’s to what I get in dividends!

By the end of the year, I’ll have roughly earned around $60 in interest from my Roth CD’s (on about 2,500 dollars.) – Because CD rates are really pitiful right now… That’s 4.6 times what my Mutual funds should be worth since I’ve contributed $11,500.00 in mutual funds… So, if I earn more than $60.00 in dividends for every $2,500.00 I have invested, it was smarter to buy mutual funds then the CD’s.

So As long as I receive over $276.00 in dividends, It was a good investment move for the year.


According to Google,

My mutual fund is currently offering a Yield of 5.66%

I’m assuming that means I’ll be receiving 5.66% of whatever my mutual funds are worth… So if I base that on yesterday’s closing price of $8.36, that’s $0.47 for every share I have... and since I have 1,317.656 shares that’s $619.00!

I think I like my mutual funds a lot more right now then I did before I fully understoof them (that $600 would put my account into the land of profit!).

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