Snowball effect, the power of compounding showed with Coca Cola
Let’s talk about the snowball effect and how important it is to reinvest your dividends. Manypeople talk about this but some people can't really grasp the power of compounding. I think the best company to use for this is Coca Cola. Most people can relate to this company.
If you had invested $1,000 in Coca-Cola stock back in 1990, today your total investment (including dividends) would have returned 1,400%. that means by investing in Coca-Cola at the start of 1990 would have turned, $1,000 into $15.000 (the 1,400% return + initial investment).