In the 1982 Letter to Shareholders of Berkshire Hathaway, Warren Buffett included spent a few paragraphs explaining the accounting realities that come into play based on whether or not you own at least 20% of a company in which you invest. Basically, it works like this: if you own less than 20% of a company, your balance sheet only reflects the dividends that the company pays to you on the balance sheet. If you own more than 20% of the company, your balance sheet reflects both the dividends that the company pays you and the retained earnings that the company keeps.
As Buffett put it in 1982:
“The appended financial statements reflect
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Welding trade schools frequently run late night TV advertisements that targets a demographic susceptible to the dream of a better life. Specifically, these commercials show guys having fun with a welding gun and wiring feed molding metals at a promised starting salary of $25 per hour (which often amounts to annual income in the $50,000-$55,000 range) with some even alluding to possible compensation of $50 per hour (i.e. the $100,000 per year threshold). This type of advertising is often misleading, as the median salary for first-year welders is $18 per hour, or annual income the $35,000-$40,000 range.
More broadly, there seems to be a naivete from people in their late teens and early … Read the rest of this article!