 Published on 2/3/2023 on LifeCanBeSimple.net
Published on 9/21/2023 on LifeCanBeSimple.blog DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment. WHAT IS PASSIVE INCOME? Few people realize the importance of Passive Income. In life, we must either work for a paycheck, or we can wisely invest and let those investments pay us. Last year I had virtually no substantial income from dividends. By purchasing a lot of Growth Dividend Stocks, CEFs (Closed-End Funds) at huge discounts to Net Asset Value, and some Preferred Stocks, we have now over $70 per month coming in. We are planning for over $100 per month in the next six months, with a goal to get above $500 within 2 years. We did an article on DGI Dividend Growth Stocks (Click here). This Article goes into CEF funds in detail. And this one explains Preferred Stocks. Passive income makes you money while you sleep. We were taught in school to work hard, to make good grades, go to college, and then get a good high-paying job. Put your money into the 401-K or IRA and then retire at 65 and be happy. How does working your life away for 45 to 60 years sound like a good plan? If we can leverage some passive income to our advantage in our 20’s and 30’s, there is no reason we should have to work most of our lives. If you are much older, it still works to your advantage, so keep on reading. You are never too old to develop passive income. Passive income is income that you don’t work for on a daily basis. It can come from dozens of sources. Some may have required earlier work, but it is mainly money today for efforts put in the past. Probably the most common passive income is interest from your savings account. Here is a short list of some Passive Income sources. Common Passive Income Streams
We did articles on Dividend Paying Stocks and how to pick some good ones. One was on the Dividend Aristocrats and the other was on the Dividend Kings. Check those out for good leads on stocks that will not only pay dividends but grow in value also. https://lifecanbesimple.net/blog/what-are-dividend-aristocrats https://lifecanbesimple.net/blog/what-are-dividend-kings Why Passive Income? - SIMPLE AND REQUIRING NO INVOLVEMENT You wake up and money flows into your bank accounts and all you do is watch it grow. My friend Joshua King started writing content at the age of 36 and now has over 140 kindle books bringing in a monthly income of over $650. With the compounding effect that this has, he will reach over $1,000 of book-producing revenue each month within five years. So being a writer can clearly be a method of obtaining passive income. Joshua King is the one who got me started on the quest for Passive Income. This next book link is one of the top 5 most important Investment Books I have ever read. Joshua wrote a 319-chapter book on just Passive Income named: The Biggest Book on Passive Income Ever. You can buy it at Amazon using this link: Biggest Book on Passive Income To be able to write on topics such as investing, we must study and read every day. There is no substitute for filling our minds with new information that is pertinent to business and investing today. Much bad information is there too, so learn whom you can listen to and whom you can not. Who should pursue Passive Income? I think we all should. Producing more income, allows us to give and help others in need. And having a steady source of income is very comforting in tough times. List of All Investment Articles List of All Minimalism Articles Facebook Internet Direct Store
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 Understanding Preferred Stocks
Published 2/2/2023 on LifeCanBeSimple.net Published 9/20/2023 on LifeCanBeSimple.blog DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are my own and are not to be used as professional advice. These are my findings and can hopefully help you make informed investing decisions. Consult a Broker or Lawyer before making any investment. One of the better investment vehicles available to investors is the equity class called Preferred Shares or Preferred Stock. Not much is said about them, so I am going to try and shed some light on the topic and teach a bit about the basics involved in Preferred Stock. Many Preferred Stock shares pay excellent dividends, and some pay above 10%. Many can be purchased well below their par value which is normally $25 per share. Preferred Stocks (or Preferred Shares) are simply a class of equity stocks. They hold a senior position over common shares. One of the big differences (which is of little significance to small investors) is that Preferred Shares do not hold voting rights. In concept, they are much like a bond, but they are not a debt. In case of bankruptcy, bonds being debt would be paid first, then Preferred Shares, and if any money was left, the rest would be paid to the common stock shareholders. Another investment method not well known also are Closed-End Funds. We did an article on those at the link below: What Are Closed End Funds? Preferred Stocks typically always sell at $25 which is par value. If you pay over $25 a share, you are paying a premium. Under $25 means you are purchasing at a discount. The dividends are paid on the value of $25 even if you purchased it at a lower rate, meaning you can get substantially higher returns than the stated rate if you buy at a good discount. There are several terms, characteristics, or properties that you need to understand when buying Preferred Stocks. You need to try and buy those that are Cumulative, Redeemable, Perpetual, and Fixed. Cumulative means that all dividends must be paid. If a company is low on funds and suspends the dividend, then later reinstates it, that means the prior dividends must be paid. A Non-Cumulative share will not be paid on missed dividend payments. Call Date is the date that the company can buy back the shares. They must be bought back at par value. (Normally $25 per share.) If a share is past its call date, then it becomes what is called Perpetual. Once past the call date, it could be called at any time. But perpetual means it will continue to pay dividends on an ongoing basis each quarter until called. Perpetual shares exist forever until called. Non-Perpetual shares mean that they retire at a specific date which can be after the call date. Redeemable preferred shares can be called. If redeemable, they will pay the par value per share when called. (Normally $25 a share.) Fixed Dividend payments mean that no matter what price you pay, you will receive the same fixed dividend payment. So an 8% payment based on $25 would net much higher if you purchased the stock at under $20 per share. The lower the price per share, the higher your net yield. Do not purchase the Floating Rate preferred as the dividend rate can vary. My good friend Joshua King has written some good articles on Preferred Stocks. You can find that article here: https://militaryfamilyinvesting.com/2021/03/17/preferred-shares-101-getting-started-with-preferred-shares/ In his article, he tells of a website that can explain what code to use to pull up preferred shares on various websites. It has a lot of information about income investing. https://quantumonline.com/ Preferred shares pay normally by the quarter, and they are consistent much like interest received on bonds. They are steady income producers and can be very useful in setting up a good portfolio. I purchased a preferred stock today that meets all of the requirements we have mentioned. It is KREF/PA which is the preferred stock shares of KKR Real Estate Finance Trust. Coupon Type: Fixed Rate: 6.5% nets 8.40% at the purchase price of $19.34 Cumulative: Yes Perpetual: Yes If the shares are eventually called, each share will pay $25 meaning a gain of almost $6 a share. Since this stock is perpetual, it may never be called, but the 8.40% net is still a very good dividend. One of the best websites to find information on Preferred Stocks is the Preferred Stock Channel. https://www.preferredstockchannel.com/ When you signup for their weekly emails, they will send you good stocks to review that are paying some of the highest returns. Be sure to pay attention to the rules we listed as all types of Preferred stocks are recommended. Another site that has information on Preferred Shares is Yahoo Finance. You can find information from Fidelity Investments at: https://digital.fidelity.com/prgw/digital/research/ A better screener on Preferred stocks is at Schwab Investments: Note: you must be a Schwab customer to use this service. https://client.schwab.com/app/research/#/tools/stocks/preferredscreener So in summary, Preferred Shares/Stocks can be great income producers. Review for the following characteristics of the stock:
If you prefer to buy ETFs and not study the individual stocks, several good ETFs deal only in Preferred shares. Here are 3 that I have purchased that pay consistently good dividends. (6 to 10% yearly)
Few people understand Preferred Stocks; they are a great method to increase your earnings. You can take advantage of the many Preferred Stock offerings with just a little effort. Review the Preferred Stock Channel for many offerings: https://www.preferredstockchannel.com/ List of All Investment Articles List of All Minimalism Articles Internet Direct Laptops  DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are my own and are not to be used as professional advice. These are my findings and can hopefully help you make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
Why I Love Passive Income – Part 2 What is greater than Passive Income? I started last week’s first part of this 3 part series on Why I Love Passive Income. I think it will help you to start on this topic beginning with part one. Why I Love Passive Income One of my favorite authors on Amazon Kindle Books is Joshua King. He has been a real inspiration to me to get active in making income from various methods. In the book I was reading today “Diversify Your Passive Income”, Joshua King pointed out several important things. One is that we need to diversify our income by using our creative selves. Many never let their talents show. You may have a tremendous skill to do things that can make you money. Perhaps you can write books or start a business that uses your creative talents. Like me, Joshua is a firm believer in investing in stocks that pay dividends and finding growth stocks that will appreciate while paying consistent dividends every month or every quarter. And most importantly, he says we need to think right about investments. He said so many people try to adapt retirement to fit their investments. While you may have to do that, it is not a good long-term plan. We need to develop a mindset to grow our money. (Growth Mindset.) Trying to make do comes from a scarcity mindset. If you grew up in a poor or modest family, your parents may have caused you to have that scarcity mindset. What our parents believe carries over to us, but we do not have to stay with that scarcity mindset. Having a fixed mindset is not good. We should grow and continue to learn our entire lives. I read a great book on Mindset by Carol Dweck. Below is a link to the book on Amazon. Mindset by Carol Dweck Another great book to stimulate your thinking on Mindset is “Limitless” by Jim Kwik. Limitless by Jim Kwik What you believe and think has a lot to do with your success in life. Henry Ford once said: “If you think you can or you think you can’t, either way, you are right.” So it is crucial to have the right mindset. “To be successful, you must know what you are doing, like what you are doing, and believe in what you are doing.” Will Rogers There are literally dozens of ways to earn passive income. You can make your own YouTube channel, open a side business that you or someone else runs. You might own land and rent it out as farmland. Cattle can be raised for a profit with minimal work on your part. As I said there are dozens if not hundreds of things that can make you Passive Income. Passive Income comes in without you trading your time for pay. What Is Passive Income? Another option is to buy real estate and rent out rooms or the whole house. There are many advantages to making real estate investments. It takes a lot of money to get into real estate, but you can purchase Real Estate Trusts and get most of the advantages of increasing home prices without the hassles of paying for all the maintenance costs. No annual mortgage tax payments, no wake-up calls for broken sinks or commodes. Also if money is tight, you can quickly cash out your REITs. Try turning a house quickly and get enough to make a profit. You can buy direct Real Estate Trusts or buy them via ETFs or Closed-End Funds or stocks. A great stock that deals in Reits is AGNC. They currently pay over 14% in monthly dividends and are very steady and consistent month to month. Other good stocks that pay monthly are PDI and PDO. How to Invest in Real Estate Trusts So my method to acquire passive income is to purchase assets. These can be as I mentioned in last week’s article, ETFs (Exchange Traded Funds), stocks, or mutual funds. I will discuss my other two high-paying dividend categories in the next few weeks. These next ones are my numbers 2 and 3 in regards to making me the most money. Those two next week will be CEFs (Closed End Funds) and BDCs. (Business Development companies.) I urge you to continue to study and find some methods to start earning passive income. As Joshua King said, having a growth mindset is the starting point to gaining a lot of Passive Income. Grow and learn every day. List of All Investment Articles List of All Minimalism Articles Facebook Internet Direct Store Internet Direct Laptops  DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are my own and are not to be used as professional advice. These are my findings and can hopefully help you make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
What I Love About Passive Income What is greater than Passive Income? Perhaps in this 105-degree weather this week, a bowl of ice cream with some fruit might be better. But as far as money growth, there are few things better than Passive Income. What Is Passive Income? Day in and day out, here are a few things greater in life in regards to bringing in steady money than passive income. If you are like me, you were taught to go to school and get a great education, find a steady high-paying job, and exchange your time for money. So the only way you receive a paycheck is by trading your time for the pay. The problem is you only have so many hours a day, and then tomorrow, you must start over to get more money. You only have so many hours in life, so we need to find a better way to bring in money. Rich people do not trade time for money, but they buy assets. Robert Kiyosaki has written many books on this topic beginning with his best-selling book “Rich Dad, Poor Dad”. In his books, he teaches that we all need to find ways to make Passive Income. He says we need to create assets that will make us money. So passive income can come in so many ways. You could write a book and sell it, and that would be passive income. Written once, but it sells over and over. One of my favorite methods of passive income is to buy an asset. That could be a rental property, but my choice is to buy stocks and ETFs (Exchange Traded Funds) that make me money via dividends. Investing with ETFs There are so many good dividend-paying stocks. I like to use my Schwab IRA to buy ‘stock slices’ in companies I feel are good dividend payers and also are potential growth companies. This is called DGI / Dividend Growth Investing. These are companies that will make you steady dividend income, but due to growth may also gain in value as their stock prices go up. What is Dividend Growth Investing There are many ways to invest and to find high-paying dividend growth companies. Two of my favorites are those on the Dividend Aristocrats list and those on the Dividend Kings list. Dividend Aristocrats are companies that have raised their quarterly dividends for 25 years or longer. Dividend Kings are those who have done that for over 50 years. Requirements to meet the lists are different, but there are some companies on both lists which certainly are worthy of consideration. Read about those two lists at: Dividend Aristocrats Dividend Kings This past year I have come upon 3 other classes of investments that are making me the most in dividends. I will discuss only my favorite of the 3 today. Those high-paying dividend stocks are called Preferred Stocks. Briefly, the advantage of Preferred Stocks over normal stock is they sell at a fixed par value which is normally either $25 a share or $10 a share. And because the stock market is liquid, these vary in price a lot. So, if you buy a company’s preferred stock that is out of market favor, it will sell at a discount to par. I try to buy all of mine on those with 14 to 70% discount to par. The dividends are still paid on the par value. So if you buy a stock that pays 8% dividends and you buy it at a 50% discount to Net Asset Value, the real return is 16%. And if purchased at a discount, normally these move back to closer to par value over time. You make a lot more in dividends and the percentage of dividends is great. When you combine that with my plan of stop loss orders at 92% of the value I paid for it, your chances of much loss are greatly minimized. I find most of my Preferred Shares on the PreferredStockChannel.com. If you sign up for their weekly newsletter, they will send you a complete list weekly of the top 10 highest-paying Preferred Stocks. Be careful of following that list as some companies are in trouble and may wind up in bankruptcy. Also, some have declared dividends but have not paid them. So being on the list simply gives you a stock to review. Due diligence is required to purchase those that are good buys and not in a serious financial state. Understanding Preferred Stocks I will discuss my other two high-paying dividend categories in the next few weeks and also discuss REITs (Real Estate Investment Trusts) which are another great method to earn passive income. Have a great week. Study and find some methods to start earning passive income. A year ago I had almost no dividend income, and this month we are now up to $175 per month. Not a lot of money, but we are increasing it by $25 to $33 each month and should be at over $1,000 in a few years. What is great is they pay you while you sleep. No effort is required on your part but to maintain and monitor your investments and stop loss orders. I update mine at least once per month. List of All Investment Articles List of All Minimalism Articles Facebook Internet Direct Store Internet Direct Laptops  Originally Published 8/1/2022 on LifeCanBeSimple.net Published 9/12/2023 on LifeCanBeSimple.blog The Compound Effect by Darren Hardy DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment. The Compound Effect by Darren Hardy is one of the best books I have ever read. While not geared specifically to investments like I thought it would be, it is a very eye-opening book. Darren Hardy is a no-nonsense motivational speaker, and his success and determination are very apparent in the book. I have now read 69 books in 2023, after I read my all time high of 90 books in 2022. I can not tell you how important it is to continue to read and grow with topics that give you greater knowledge in investing. All of these books have been about investing, habits, simple living (minimalism), or mindset. Having a growth mindset is so important. Darren Hardy is the publisher of Success Magazine, and from page one, this book resonates with HOW TO BE SUCCESSFUL. When I got the book, I thought it was going to be about how you win in the investing world by the compound effect. While it is true, this covers so much more than investments. I did an article a few months ago called the Rule of 72. If you are not familiar with that rule, it is an accounting rule that makes it easy to determine how long it will take for your money to double. You take the percentage of return and divide it into 72. So if you get 12% interest, that means it will take 6 years. If you want to know how many years it will take to double your money if receiving 9%, you can also divide it into 72 and it will take 8 years. Check out the article at: The Rule of 72 What Darren Hardy explains in his book is that success is truly a mindset. Reminds me a bit of the book Limitless by Jim Kwik. You must learn that success comes in small consistent habits. If you have bad habits, you need to break those and replace them with good habits. Every single win comes from starting with small manageable steps. What I learned from The Compound Effect: Darren begins with the phrase “Slow and Steady wins the race.” He believes that given enough time, he can defeat anyone, just like the tortoise did to the hare in a fairy tale. Darren was raised by his father in a single-parent home. His dad started him early in teaching him to have discipline. Each day as a child, Darren remembers his dad out in the garage pumping weights. He had a big sign over the barbells that said “No Pain, No Gain.” A former University football coach, he was out there daily working out. He did not believe in wimpy excuses, and would not let a player come out of a game unless they were puking, bleeding, or showing bone. Sounds pretty hard nose. My dad was very similar in that he just wanted us to get the work done and keep our excuses and complaints to ourselves. Darren relates much of his success to being taught to have discipline in his life, and I totally agree that it made a huge difference in my own life. I never in all my years of working ever had to have someone come up and tell me to get to work. We are supposed to work and that is why we are paid by our employers or clients. Darren’s dad set an example in discipline, and had a saying: ‘Be the guy who says “No”. It’s no great achievement to go along with the crowd. Be the unusual guy who is the extraordinary guy.’ Darren never had trouble with drugs as he never wanted to let his dad down. The Compound Effect reveals the “Secret” behind Darren’s success. He believes it began with his dad modeling it and living it out day by day. He had to live that way, and that is the reason he has been so successful. The Magic Penny Story. Darren asks if you were given an option, take 3 million dollars on Day 1 or a penny on day 1, and let it double in value for 31 days, which would you choose? Most every one of course would select the 3 million. However, if you multiple it out, on Day 30, your one penny that doubles each day would be worth 5.3 million. On Day 31, it kicks when it comes out to $10,734,000. This is the effect of the compound effect. Slow steady builds win the race. Everything done in small simple steps is the key to success. If you work slow, with consistent good habits day after day, you wind up winning. Choices, Behavior, and Habits send you up the ladder or down. Depends on what you choose and how consistently you do the same things over and over. Sit around watching tv all the time, be sure you won’t accomplish much. The choices we make are at the root of all results. Every decision we make alters the trajectory of our life. To be effective, we must own 100 percent of our actions. To be accountable is the beginning of the compound effect. Preparation + attitude/mindset + opportunity + action = luck. Luck is truly earned, not just some random happening. Arnold Palmer, the great golfer, said “It is funny. The more I practice, the luckier I get.” To get a handle on our lives, we must track everything. Darren urges everyone to get a little notebook and for 3 weeks, write down everything. Every penny you spend, every food you eat, every use of your time, everything you do in regards to exercise. Then you can see where your mistakes are being made so you can make improvements. Most people have no idea how much time they are wasting watching mindless drivel on television. Watching the news can cause us to be depressed. And we waste so much money. He gives an example of the $4 latte which many spend daily on the way to work. In 3 weeks, it costs you $60. In a year, that is over $1,000. In 20 years, if you count the compound effect of simple interest, you have thrown away $51,000. Buy a $10 gallon can of coffee and you have enough to make coffee for over a month. Habits are very important. Aristotle said, “We are what we repeatedly do.” 95% of all we think, feel, or do is a result of a learned habit. The core motivation for doing the things we're doing is based on your Core Values. It is crucial to write down what makes up your core values. I watched a one-hour video presentation Mr. Hardy put on, and he had us write down those core values and stressed we must never do anything that compromises our core values, regardless of the money we might make. In the same presentation, he had us write down our definition of Success. That means so many different things to people. In The Compound Effect, he gives us 4 strategies to clean up bad habits. 1. Identify your triggers as to what motivate you. The who, what, when, and where that is triggering a bad habit. 2. Clean house – scrub out the bad and get rid of it. 3. Swap your bad habit with a new good habit. 4. Ease in and start slow with new habits OR Jump in with both feet and immerse yourself with a new good habit. Be patient with yourself in breaking old habits. Some will be difficult. Momentum plays a big part in the compound effect. Big Mo is the main force in our success. Darren Hardy gives the sample of the Merry Go Round which we all played with on the school ground. Very hard to get it rolling, but once started, it turns and turns on its own. Our lives lived in a successful mode have this same kind of Momentum and Compound Effect. We are affected by 3 kinds of influences in our lives. 1. Input – What do you feed your mind? 2. Association – Who do you spend time with each week? 3. Environment – What kind of surroundings do you have? We can not let garbage come into our lives. The result is the old computer adage of Garbage in, Garbage out. What we take in has much to do with what we put out in our lives. Darren urges us to limit our intake of television or media to one hour per day. Spend worthwhile time with our families. Cut back on watching the news or reading non-pertinent news. We need to be sure those having input into our lives have a positive influence. Reduce or eliminate all negativity. Invest in good relationships and associate only with those that share your passion for excellence and positivity. Change your perspective and be sure it aligns with your core values. Go way beyond others' expectations. Those who go the extra mile become EXTRAORDINARY. Strive to always be extraordinary. Motivation without action will only lead to self-delusion. We must act on the areas of our lives that need improvement. The compound effect is a tool that when combined with positive and consistent action will make a huge difference in your life. Make your life different… make it one with significance. Darren Hardy urges us to give generously of our time and energy, and the ripple effect will be a great blessing back to us. I urge you to read this book. This is another book like Richard Kiyosaki’s Rich Dad Poor Dad where you must question your limiting beliefs. I am not saying to question God or the accuracy of the bible, but question what habits you have and modify those to let yourself have a full, joyful life that will be a blessing to your family and everyone who associates with you. I watched a podcast on DarrenDaily.com, and he urges his listeners to figure out what would improve their life the most. Then in each quarter of the year, study that one thing. For instance, in quarter 3, I decided to try and eliminate all negative self-talk and replace that bad habit with a good one. He suggested reading 5 books on that topic and zeroing in on that one thing. I searched for Amazon books using the search “Free kindle books Negative Self Talk” and then “Free Kindle books Positive Thinking” and found more than 20 books in these 2 searches. I downloaded the ones that appeared to be the best for me. I intend to read all 8 of those books and strive to eliminate one more bad habit and replace it with a good habit. All of this is just an example of using some of the ideas from Darren Hardy which first started my thinking in “The Compound Effect.” I Highly recommend this book. List of All Investment Articles List of All Minimalism Articles LifeCanBeSimple.Blog Internet Direct Laptops  Originally published on 5/23/2022 on LifeCanBeSimple.net
Published on 9/6/2023 on LifeCanBeSimple.blog DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment. The Rule of 72 and Saving $1 a Day I attended Midwestern State University and majored in accounting. In my Junior year, we studied the Rule of 72. It is a super simple rule and helps you determine how long it will take for you to double your money. 72 ÷ your compound annual interest rate = how many years until your investment doubles If you want to double your money in 6 years, you can divide 72 by 6 and it tells you that you must make 12% on your interest rate. Basic algebra (keeping both sides of the equation equal) means that if you divide 72 by the interest rate, you get the number of years it will take. So if you know you are making 9% interest, your money will double in just 8 years. 8% interest means it will take 9 years. So it is a fast and simple method to determine years and percentages. That is what compounding of interest does for you. If you take our initial example of making 12%, the reason it will double in 6 years is after the first year, you have your initial investment amount (say $1,000) plus that year’s interest of $120. So the second year, you make much more interest as your basis is now $1120 * 12% = $134, etc. until you roll into $2,000 at the end of the sixth year. May not be exact, but is a good rule of thumb. The rule of 72 has been around for a lot of years. Luca Pacioli, a mathematician from Italy wrote about it in his book “Summary of Arithmetic, Geometry, Proportions and Proportionality”, around the year 1494. Some credit Albert Einstein for the rule, but no documentation supports this claim. The Rule makes it easy to see why compounding is super important, especially if you will start the process in your early years, particularly around 20 to 25. What if I told you that you could save One Million dollars by investing just $1. Not once a year, but ONCE. It can not happen with 0% interest. But with 3% interest, it can happen. Sound impossible?. In his book “Multiple Streams of Income”, Robert G. Allen gave that exact example. He said if you just save $1 you will accumulate 1,000,000 dollars if you receive 3% interest in just 468 years. What?? 468 years. I doubt many of us would live to see that happen. However, if you change that interest rate to 5%, it would only take only 264 years. 20% nets you one million in 75 years. Think of that… One dollar invested and because of time, it would be worth One Million. Most people are not disciplined enough to leave the money alone, much less invest more consistently. So Consistency and Discipline are very important. Now let’s bump the ante a little bit. What if you saved $1 a day. How long would it take? At 3% interest, 147 years, 5% - 100 years, 10% - 56 years, 15% - 40 years, 20% - 32 years. See the importance of consistent steady investments. It is not nearly as important on the amount as the steady savings month after month. And using our rule of 72, if we can average 12% returns, our money doubles every 6 years. In his book “The Total Money Makeover” Dave Ramsey points out that there are dozens of growth mutual funds that average 12 to 15% per year. So a person who starts young and consistently invests in an investment that makes 10% or more is sure to have a large amount in their savings by the time of retirement. Robert Allen said in his book: “The real key is to keep socking away the money. Let the numbers whisper their silent but relentless message. Consistency. Day in, Day out. Save, Invest, Save, Invest. It may be dull, but no matter, just do it.”a www.lifecanbesimple.blog Internet Direct Laptops |
David ParhamChristian Minimalist and Investor. God guides and helps me everyday. Archives
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