When it comes to money, my money, Your Survival Guy’s habit is to focus first and foremost on the return of assets and then, and only then, look at the return on them. No one I know likes losing money. And if you don’t have money to compound—in other words, you lost money—the magic of compounding can’t do its work. I’ve been compounding money for most of my life, starting young with a paper route and scooping ice cream. Both taught me to appreciate a dollar earned and to be careful with my savings. Using the rule of 72, I want you to divide it by your rate of return and see more or less how … [Read more...]
The Magical Word We’re Taught in School
Not to bore you with math, but investing is math. Hoping for a stock to get to some price is just that, a hope. It’s qualitative, not quantitative. Collecting income from all areas of your portfolio—even that money your nephew owes you—is quantitative. You can actually see it hit your portfolio, your bank account, or your wallet. When I think about the magic of compounding money, I think about math. It’s simple. You get paid like you did from your nephew. You got back what you lent out (though maybe you didn’t expect it) and usually some interest. But because he’s your sister’s son, you … [Read more...]
Part II: When Others Resent You for Your Success
You appreciate what you have, where you’re at in life (maybe a little more money wouldn’t hurt), and where you’re going. You saved ‘til it hurt, and you know you definitely don’t want to have to do that again. You worked hard at your job, your business, and you put in the time. It went by fast, but a lot of those days were long. Now, you need to keep what you’ve made. A different skill set is needed. What are you going to do? First, I want you to avoid the mistakes that keep investors from realizing the success they deserve. Mr. Market has a way of wanting to change people’s lives, and not … [Read more...]
Time Is Money: Are You Over 40?
You, my fairly wealthy, highly successful reader, learned a long time ago how to harness a most powerful force: t-i-m-e. You saved ‘til it hurt and put money away with the faith that you might be in a better spot down the road. And now, when you look back on it all, you think, “No way I want to do that again. Not sure how I even did it. Can we change the subject?” Don’t worry, I won’t tell anyone. But saving ‘til it hurts does something magical. It puts the most powerful force into action. You put time on your side. You become a compounding machine, and without even knowing the miracle … [Read more...]
There Is No Miracle More Powerful than This
If you want to get a bird’s eye view of how hard your money works, spend a few minutes reviewing my piece Rich Grandchild, Poor Grandchild. When you start saving early, good things can happen. It’s probably why you’re able to invest today for the retirement you deserve. Accumulating money is work. Literally. You get up every day and do it. You go to work and save ‘til it hurts. Investing money in retirement is a different kind of work. You get up every day and wonder what it’s done for you lately. The reason Your Survival Guy recommends living below your means is because it gives your … [Read more...]
Two Essential Ingredients to Wealth
Diversification and patience. Two essential ingredients to wealth that are often discovered on the road most traveled. Because most investors are too busy working and accumulating money to think about diversification and patience, it’s done for them. They’re on autopilot. But when you start thinking about retiring, it’s hard to stay on the road to wealth—especially with all the distractions. Right now, I’m thinking about all those treks driving to Florida. It’s hard to miss the billboards to visit Pedro at South of the Border—the roadside attraction we all know from driving route … [Read more...]
The Same Prices Until You Retire?
In times like these, prices can be your friend. All those juicy dividends and income checks get reinvested at prices you can live with. When you’re an income investor, you aren’t thinking about rising stock prices. Sure, that would be nice, but prices are what they are. Income, on the other hand, is what you see coming into your account regularly. You almost want prices to stay the same until the day you retire. That way, you can be a compounding machine and buy more shares at the same price. Prices can go up, and prices can go down. Hopefully, your income will only grow. Action Line: I … [Read more...]
Friends, Come with Me on a Road Less Traveled
You’ve come a long way. Pretty nice view, isn’t it? Look at your savings. Who would have imagined you’d be where you are today? Nice. And because of who you are, I want you to become intimately familiar with the yield curve. Fixed income is alive and well. Pretty nice, I’d say. And before we try and rain on this parade with inflation talk (I’ll get to that in a minute), let the yield curve sink in. Better yet, show it to your lazy cash sitting at the bank doing nothing for you. Your Survival Guy’s life has been one of compounding. Compounding experiences. Compounding money. Both are … [Read more...]
For Whom Is Your Portfolio Serving?
Pressure and prices are no friend of the Prudent Man. When there’s pressure for your portfolio to “do something,” then you’ve already lost the game. The same is true with prices. If you need prices to get to some level, then forget it. Pressure and prices? These are terms for the speculator. Someone Your Survival Guy has no interest in serving. But there is a brighter way forward. Once you focus on a portfolio built on patience, dividends, interest, and compounding, an entire world opens up to you. One in which you control your destiny and can rise above the fray. You know, trusting other … [Read more...]
Two Ways You Can Make Time Stand Still
Your Survival Guy survived a weeklong liver cleanse, and I’m here to write about it. OK, it was a five-day deal. I made it four and three-quarters. I can’t say I recommend it, but here I am, wondering how this week will go. So far, so good. Now I’m thinking about every little bite and sip I take. But hey, a little bit of self-reflection goes a long way. That’s the beauty of a reset. If you want to make time stand still, dear reader, and not let life pass you by, then do a liver cleanse. Talk about watching paint dry. Five days will feel like an eternity. All in the name of prolonging … [Read more...]
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