Pop quiz: What did Albert Einstein describe as, "the greatest mathematical discovery of all time?"
Keep reading below to find the answer.
But first, consider this…
To double your stock portfolio in 10 years, all that's needed is a 7.2% average annual return. Yes, that's right, a $10,000 stock portfolio becomes $20,500 in just 10 years, with a 7.2% average annual return.
However if you add an extra $1,000 per month to your stock portfolio, you'll have $195,503!
Fun fact: Since January 1900, the Australian stock market has achieved an average annual return of 12%.
Now, let's say, you achieve the market's historical average of 12% and put $1,000 into your portfolio every month.
Suddenly, your portfolio is worth a huge $263,043.
The five dividend stocks you can start with…
If you're reading this and thinking, "But how can I achieve a 12% return year-on-year?"
You're not alone.
But, if you consider some small-caps and S&P/ASX200 Index (INDEASX: XJO) stocks offer dividends with franking (a tax effective income) of more than 5%, your chances of achieving a 7.2% annual return are greatly increased.
For example, the following five growth stocks I've identified each have grossed-up dividend yields above 5%. Meaning a much more modest capital gain is required, each year, to potentially double your investment.
1. M2 Group Ltd (ASX: MTU) is the owner of Dodo, Primus and Commander Internet brands as well as other retail utility services. It is forecast to pay a 5.4% dividend, grossed-up.
2. Village Roadshow Ltd (ASX: VRL) is the name behind Village Cinemas, Warner Bros. Movie World, Wet'n'Wild and much more. It is forecast to pay a grossed-up dividend equivalent to 6.3%.
3. Cash Converters International Ltd (ASX: CCV) is Australia's premier second-hand goods dealer and provider of payday loans. Its forecast 3.6% fully franked dividend equates to 5.2% grossed-up.
4. Collins Foods Ltd (ASX: CKF) is an owner and operator of KFC, Sizzler and Snag Stand restaurants throughout Australia and parts of Asia. It is forecast to pay a grossed-up dividend of 5.2% in the next year.
5. Hills Ltd (ASX: HIL) is a technology and communications company which is currently in a state of transformation. It is forecast to pay a grossed-up dividend of 5.6%.
Our #1 dividend stock idea – Yours Free!
Albert Einstein, once described compound interest as the "the eighth wonder of the world." And it's easy to see why.
