From Tom Dyson in The 12% Letter:

Wal-Mart raised its dividend again...

Wal-Mart has raised its dividend every year for the past 33 years. This year, it raised it 11%. Next year, it'll raise it again… probably by a similar amount. It'll raise it again the year after that, and the year after that...

People look at Wal-Mart's dividend yield – currently 2.2% – and they don't see anything special. What they don't appreciate is the effect of double compounding. On one hand, you reinvest your dividends every year, so your dividends pay dividends and so on. On the other hand, the dividends get bigger every year by 10%.

Combine these two forces together – the double compounding effect – and you create a powerful money machine. For instance, if you'd invested $1,000 in Wal-Mart 20 years ago, your investment would be worth $21,000 today.

This is why I'm such a big fan of Wal-Mart's DRIP plan. When you sign up for Wal-Mart's DRIP, you buy stock directly from Wal-Mart, cutting out the broker. Wal-Mart will reinvest the dividends for you, and if you like, you can set up a monthly investment plan. It's the perfect savings vehicle. Make sure you give your investment at least a decade to grow.

Crux Note: Tom Dyson is the editor of The 12% Letter, and he just released a new report on DRIP investing. If you'd like to learn all the details on this fantastic strategy, click here.

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