The $50,000 Trust Fund

There are going to be some kids, somewhere, born in 2042 that are going to have a great head start in life by getting a free education because of the very intelligent decisions of a man and his wife in 2014.

A reader of this site who told me has been visiting the site since I started it last May told me that he had finally gotten around to putting aside a decent-sized cash egg that he intends to use as an education fund for his grandchildren (at present, he has three daughters under the age of ten).

Because of the low account value for the account right now, he is starting off … Read the rest of this article!

Fortunes Are Built By Being Exceptional In One Of Three Ways

Halleluiah! Break out the tambourines and shake them. Break out the fireworks and make sure you don’t shake them. On the day dedicated to celebrating American exceptionalism, I wanted to point out one of the greatest truths that is necessary for building long-term wealth: You must be exceptional in one of three ways.

Way #1: You possess the ability to identify and purchase an exceptional company that is growing rapidly. It took $8,500 in 1992 to create over $1 million worth of Starbucks stock today. Once it became apparent that Wal-Mart was rolling out stores all across the Midwest in 1982, it would take $8,500 in Wal-Mart to create a $2.1 fortune in … Read the rest of this article!

The “Follow Your Passion” Career Advice

From what I can tell, there are two types of parents out there when it comes to advising and strategizing with their kids when it comes to selecting a major in college and finding something to do with your life after that.

First, you have the “follow your passion” camp.

What this camp gets right is that what you do in class, and what you do for a living, will occupy half of conscious life. It becomes as much who you are as what you do in those eight hours of free time. It is a paramount decision because the seeds of building a fortune start with selling your time as labor for … Read the rest of this article!

No, You Should Not Sell Your Website

This is probably the most important topic that I’ve yet to ever discuss in any of my financial writings: 100% profit growth does not lead to the same results for every type of business.

Let me give an example: Let’s say that over a century ago, you were Mr. Pemberton, and you started Coca-Cola. When you were growing your soda business, you were doing a magnificent thing because you were the owner of a business that could be capitalized at thirty, forty, fifty times profits.

Every time you doubled your profits, you were getting significantly richer. If you made $100,000 in soda profits, you could sell it for $3,000,000-$5,000,000. But if you doubled … Read the rest of this article!

Microsoft Stock: I Wouldn’t Sell

Between 2003 through 2013, Microsoft stock traded in the $20s. The company’s stock price performance history is one of the most illustrative examples of how stock price performance and underlying business performance can differ dramatically. Even though the price of the stock did not increase during this ten-year period, the profits per share climbed from $0.97 to $2.65 per share. Profits were tripling while the stock was stagnating, which provided another example that we cannot control the “when” part of stock price movements but should be satisfied that we have performed our task when we have identified and purchased shares in great businesses whose profits are growing.

Since 2013, profits have continued to … Read the rest of this article!