Do you like to travel? I sure do. Thanks to my job, I've seen quite a bit of the United States and Canada. Last year, I was even able to go to Europe for the first time. But if I had to pay for it all myself, forget about it. And that's too bad, because there are neat things to see all around the world.

Many of us dream of traveling somewhere exotic. So many places to see, people to meet, and things to do. But we often think there is no way we could save up enough to be able to afford it each year. When I think of the cost of a modest two-week vacation in Europe, I figure I can never put aside that much in a year. Then I remember: There is a way to be paid that much in a year, while doing next to nothing.

Growing dividends
If you have a credit card, I'm sure you're aware that interest can be a nightmare. If mishandled, it can rapidly inflate the amount you owe. But what if you could turn it around and get interest to work for you instead of against you? Better yet, what if you could get the amount of interest you received to increase each year?

That is exactly what happens when you invest in dividend-paying stocks. The "interest" paid to you (in this case, dividends), starts out small, but over time it can grow to be a large fraction of your original investment. All it requires is some thought, a bit of capital, and time.

Time travel
Let's go back 20 years. Sysco (NYSE:SYY) had been a public company for more than a decade and had been paying a steady, though small, dividend. Suppose you had decided to invest in it, buying 33 shares for $990. You leave it alone, riding its ups and downs in the years since, neither buying more shares nor selling what you have. After four 2:1 splits, you would have 528 shares today, each one paying $0.68 this year in dividends. That's $359.04 paid to you this year, which is a 36.3% return on your original investment. And you'll likely get more next year, as Sysco has raised its dividend 37 times over just 36 years.

Think about that. You would have started off with less than a 1% dividend return per year on your initial investment 20 years ago. Today, you would be getting back more than 36%. And this kind of thing happens all the time:


Shares Bought*

Original Cost*

Shares Owned Today

Current Expected Dividends

Current Yield on Cost Basis

Exxon Mobil (NYSE:XOM)






Wal-Mart (NYSE:WMT)






General Electric (NYSE:GE)






Johnson & Johnson (NYSE:JNJ)






Washington Mutual (NYSE:WM)






Home Depot (NYSE:HD)






*Calculated as of Oct. 17, 1986.

If you invested approximately $1,000 in each of those companies 20 years ago, this year you would be paid dividends worth anywhere from 15% to more than 150% of your original investment. What an easy way to get rich!

This works because the dividends paid to you come out of a company's earnings. As the company grows, those dividends often increase. Let this happen long enough, and as you see, the yearly payments can become a substantial fraction of, or even exceed, what you originally paid.

World travel
If you buy shares in several solid dividend-paying companies and hold on for years, you could even afford to see the world. For instance, from just the seven companies mentioned here, you would be taking in over $3,800 before taxes. Why, that's almost the price of a Caribbean cruise for two. Ah, Jamaica! I can hear the surf now.

Picture it: A different destination every year, just because you were Foolish enough to invest in dividend-paying stocks and do nothing else but hold on and rake in the cash.

World-class advice
Right now you're thinking: This is great and all, but which stocks can become those huge payers of the future? If you need some help, we can help. Our Motley Fool Income Investor newsletter finds companies that are paying decent dividends today and are likely to grow them into the future. Today's brand-new Income Investor releases at 4 p.m. ET and includes two brand-new stock recommendations. A 30-day free trial gives you access to today's issue and every buy report to date, with no obligation to subscribe.

Fool contributor Jim Mueller owns shares in Sysco and Johnson & Johnson, but no other company mentioned. Those same two companies are also recommendations of Income Investor. Home Depot and Wal-Mart are Inside Value recommendations. The Fool has a well-traveled disclosure policy.