The Tale of the Lazy Investor and the Magical Dividend App
Jerry became the laziest yet smartest investor in town. Find out how below.
Meet Jerry, a proud couch potato and part-time investor. Jerry hates hard work, loves money, and dreams of earning income while eating nachos and watching cat videos.
One fine day, Jerry downloaded a magical finance app called "Dividend Genie". This app whispered to him, “Psst... wanna know what a company is really worth based on how much it pays you?”
Jerry blinked. “Wait, what? How do you know that?”
The app replied, “It’s simple! If a company gives you dividends, and those keep growing, you can use the Dividend Valuation Spell—I mean, Model—to figure out how valuable that company is to YOU!”
The screen lit up and showed this formula:
Value = D / (r - g)
D = Next year’s dividend 💸
r = Your required return 🧠
g = Growth rate of dividends 📈
Jerry thought, “So if the company ‘LazyLoot PLC.’ gives me £5 next year, and I expect a 10% return, and dividends grow at 4% each year, then…”
Value = £5 / (0.10 - 0.04) = £5 / 0.06 = £83.33
💡 “Aha!” Jerry jumped. “I’d only buy this stock if it’s below £83.33, so I can make money while staying in my PJs!”
But the app warned him, “Only use this if the company actually pays dividends and grows steadily. If they don’t, you’ll be valuing air… or worse, a tweet from billionaire.
From that day on, Jerry became the laziest yet smartest investor in town. He used the DVM to make decisions, bought dividend-paying stocks, and lived happily ever after—never missing a single cat video.
