Investing in shares for income

Shares can provide income

Shares can provide capital growth, but did you know that they can also provide you with a strong and steady income over the long term?

The income you receive from shares is in the form of dividends. Dividends can grow over time as the capital value of your investment also grows.

For example, if you invested $10,000 in the National Australia Bank (NAB) fifteen years ago, the income (or dividend) that you received in the first year was $719. Over time, the share price of NAB has risen, and so too has your dividend income. At the end of 2010, your annual dividend income had grown to $1,256. Over the fifteen years you would have received a total of $17,653 in dividend income.

Shares can provide a steadily growing income stream
$10,000 invested in NAB – growth in dividends

Adjusted for bonus issues. Source: RBS Equities. As at 31 December 2010.