Reinvest those dividends. You ought to know by now that I like dividends. I especially like monthly dividends. Even better are high yielding dividends paid monthly. What can top that? How about reinvesting those dividends?
Consider this. A company whose stock price hovers around the $25/share area. It pays a monthly dividend of $0.16 which is $1.92 annually, which works out to about 7.68% yield. Not too shabby.
Now reinvest those monthly dividends. Assume you start with 1000 shares so month one you earn $160 which buys an additional 6.4 new shares. Month two you have 1006.4 shares x .16= $161.024. Reinvesting gets 6.44 additional shares. You now own 1012.84 shares that earn $162.054 which buys 6.482 additional share bringing you up to 1019.32 shares which earn $163.09. Hope you see where this is going. If my math is anywhere close to being correct, at the end of one year you should own about 1080 shares which will earn $172.80/ month.
Assuming the share price stayed at $25/share, your initial investment of $25,000 (1000 shares at $25) is now worth $27,000 which works out to an annual yield of 8%. Carry this forward a few more years and you can imagine how much your initial investment will grow and how high the actual yield will be.
Is there an investment out there like this? Absolutely. Consider GOOP which is a cumulative preferred stock paying monthly dividends. GOODP is a commercial REIT. Many companies have a dividend re-investment plan and most brokers do not charge a fee for re-investing dividends.