The Massive Profits in Super Dividends
A wise investor is, if nothing else, cautious. So when the word “super” is added to the description of any kind of offering, a wise investor proceeds cautiously: a sound strategy for investing and a sound strategy for life.
But when one talks about a certain type of dividend known as a super dividend, it isn’t meant to arouse suspicion. It is actually an accurate description of this type of dividend. A super dividend, like any other type of dividend, pays you a return on your investment. If you invest in a bank CD, for example, with a return rate of 2% (which is on the high-end), it will take you 36 years to double your money. It’s a small return but it’s safe, secure, and guaranteed. Perhaps your grandmother bought you one for a high school graduation gift.
If you took that same amount of money and put it in a super dividend, however, a dividend that pays out at 18%, it will only take 4 years to double your money. And it just grows exponentially from there.
This is where even the most optimistic investor becomes suspicious. After all, if there are investment opportunities out there that pay back at such a higher rate, why would anyone waste their time on low-return investment like CDs?
The ugly truth is, not many people are aware of the existence of super dividends. But rest assured, they exist. In Chapter 11, Section 27 of the 2004 International Monetary Fund (IMF) Balance of Payments and International Investment Position Manual (not exactly the most welcoming name, is it?) it clearly says, “Exceptional payments by corporations…to their shareholders that are made out of accumulated reserves or sales of assets should not be treated as dividends. Such exceptional payments, sometimes called super-dividends, are treated as withdrawals of equity. The exceptional nature of the payment is normally determined as being disproportionately large relative to the recent level of dividends and earnings.”
The IMF mentions super dividends in another of its publications, The Handbook on Securities Statistics (another gem of a title) from 2012. Buried in Part 3, Chapter 6, it says the following: “Dividends do not include super dividends. Super dividends are dividends that are large relative to recent dividends and earnings…[and] super dividends are large and irregular payments.”
Those are virtually the only mention of super dividends but we know they are real because they are included in official publications of the largest monetary fund in the world, the IMF. The reason for this obscurity is because they are meant for a select few of inter-connected corporations which often share board members and are closely associated with the IMF. Super dividends have been kept a secret from those outside of these exclusive financial institutions because they don’t happen often, and when they do happen, the pay-out can be enormous.
So why haven’t folks in the know been talking about these super dividends before? Well, for the board members of the companies that pay out these super dividends, it’s well-known that the inner-workings of their institutions are to be kept private. Most companies in every industry operate on a certain level of internal secrecy. Same goes for financial institutions.
For the folks who’ve seen super dividends land in their retirement accounts, they’ve just assumed that what they got was a very large regular dividend. But super dividends are anything but regular dividends. Let me put it this way: a nice dividend will rent you a nice yacht for the weekend. A super dividend will buy you that yacht.
The trick, therefore, is to know when one of these super dividends will come around and which companies pay out super dividends. The first step is to find a publicly traded American company where at least 20% of the ownership is controlled by board members. The reason for this is, if a company is going to pay out a super dividend, the owners of that company is going to make sure a large chunk of that goes in their own pocket. Owning part of the company ensures just that.
Once you’ve found a company with a large percentage of insider ownership, the next step is to narrow the field down to those that are very profitable. There are currently 8,696 publicly traded American companies. Narrowing down to those with high insider ownership and high profits leaves 28 companies.
That’s 28 companies that have the right components in place to be able to pay super dividends. And super dividends are like any regular stock play and are available to anyone. Like I said, the trick is to know when and where one of these super dividends will come around.
Usually, there is a triggering event. For a business like a bank, that could be a merger or new legislation coming out of Washington. For an insurance company, Obamacare will definitely have an effect on their business; whether that’s profitable or not for them will vary. It could trigger a super dividend or a sudden drop in stock prices. You have to look at the big picture. You have to seek out patterns and apply strict requirements. So keep your ears to the grindstone, investors.
But here’s what is certain: the payout from one of these super-dividends can reach into six figures. This is confirmed fact. Folks across the country have seen $100,000 or more for a single stock trade in a single day. That number is usually lower, but the payout can still be comparable to what you make a year at your day job.
So rest assured, super dividends are real and they happen all across this country. They don’t happen more than a handful of times in a year but when they do, the income they can bring can be enormous.
As always, all the best in health and best in wealth.
