A Great Reader E-Mail About Coca-Cola Investing | The Conservative Income Investor

A Great Reader E-Mail About Coca-Cola Investing

One thing I have strong mixed emotions about is my terrible track record of responding to reader e-mails. At my current rate, I’m only responding back to about one out of every fifteen or so that spend some of their precious time to contact me. It is the way it is because I made the value judgment that I’d rather spend most of my days acting—that is, setting out specific things I want to accomplish and then putting in the work to make them happen—rather than reacting, which you can easily found yourself doing if you interact on Facebook, e-mail, and Twitter for good chunks of time. The reason I feel bad, though, is because I should respect the time of anyone who spent time crafting a chat with me, because I’m grateful for the generosity of others who did it for me, and well, it’s the right thing to do.

One e-mail, though, that recently caught my attention was from a guy who was just getting started out with his Coca-Cola empire and was setting aside $500 per month to make his investment through Computershare. At the time he wrote me, he had already piled up $3,000 worth of the stock.

To some of you reading this, that $3,000 may not seem like a big deal. And to be honest, that $90 in passive income may not be life-changing if he stops now. What is more interesting is what those $500 investments will continue to do when added each month, and what happens once the investment reaches the critical mass point where simply reinvesting dividends starts to generate copious amounts of cash on its own.

That $6,000 per year will generate about $180 in current income right now. Assuming reinvestment, that will generate somewhere around $360 seven years from now. And fourteen years from now, it will create $720. And twenty-one years from now, it will generate $1,440. Twenty-eight years down the road, it’ll be somewhere around $2,880. It’s entirely possible that the $6,000 set aside could be the seed planted that will give him Coca-Cola dividend income that is one-fifth of the amount of money he could be getting from Social Security each month.

It’s exciting to think what might happen if he increases his investment amounts over time or when he adds $6,000 investments into Exxon, Colgate-Palmolive, Procter & Gamble, Nestle, and Johnson & Johnson, and then lets them grow. That’s what is crazy about all of this—someone who buys $6,000  stakes in each of those companies and lets them grow for thirty years could more than double what he brings in from this country’s version of a government-funded pension. The formula would be: $36,000 into quality companies + 11,000 days= Doubled Standard of Living.

The other thing I really liked about the e-mail is that recognized that doing something is better than debating endlessly in result of the perfect result. Sure, maybe there’s something better out there than Coca-Cola. Sure, maybe it would be cheaper to go through Loyal3 instead of Computershare. The debates about “better” can turn you into one of those “analysis leads to paralysis” people and prevent you from having something to point at and say, “Here’s something I’ve built with my life.”

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