The Key to Getting Rich

I have long interested in discerning the contradictions between how the wealthy are portrayed in the popular culture and the mass media at large compared to their actual behaviors. This discrepancy has been most widely documented in the 1996 work of Dr. Thomas Stanley’s “The Millionaire Next Door”, who pointed the portrait of the typical American millionaire as a member of a two-member nuclear family that owns a small business or participates in a high-earning profession that drives a Toyota.

In my own observations of the behaviors of the wealthy, I have noticed the following behaviors:

The wealthy and fast-becoming wealthy have a ridiculously low spending to post-tax earnings ratio.

Most finance articles encourage Americans to save 10% to 20% of their annual income to retirement, speaking of the effort in an infantilizing manner as though you were telling a child to gin up and eat their spinach. The wealthy Read the rest of this article!

If You Are Investing A Few Hundred Dollars Per Month, Computershare Should Be Your Best Friend

www.computershare.com

Check it out. Scroll through the terms of some of the plans available.

If you looking to put less than $250 or so into a given stock each month, I’d stick with the companies that charge $0 in purchasing fees for each transaction by clicking here:

https://www-us.computershare.com/investor/3x/plans/buyshares.asp?stype=nof

Paying $2.50 in fees on a $1,000 monthly purchase is only a glorified rounding error, but paying $2.50 on a $100 monthly purchase is shooting yourself in the foot as you run the marathon of your investing life—you’re giving up 2.5% in your first year’s annual returns right away.

And plus, the companies that charge no purchase fees give you a good collection of offerings to choose from.

Want to own the most powerful energy supergiant that makes $35+ billion in annual profit across almost 40 countries and has returned 14% annually since 1965 while raising its dividend for three decades? You’re … Read the rest of this article!

Bob Dylan, Columbia Records, And The Abuse Of The Scarcity Principle

Yes, you can ruin a sound economic principle by taking it too far.

One of the basic underpinnings of Economics 101 is this: the creation/illusion of scarcity is good for the provider because it (artificially) stimulates demand, giving the owner of the good the option to make a tidy profit either due to increased volume and/or the ability to raise prices.

A company that demonstrates a sound understanding of this economic principle is McDonalds Corp. They regularly roll out the Monopoly challenge for “a limited time only”, increasing demand among fast food customers weighing their options about where to eat by convincing them to go to McDonalds because those Monopoly pieces will only be around for a couple weeks (if the promotion ran year-round, the novelty would wear off to the point where it provided the company no additional edge).

McDonalds also does this with the … Read the rest of this article!

Why You Should Follow James Altucher At The Altucher Confidential

There’s about fifteen or so writers in the personal finance realm that I make a point of following regularly. I’ve highlighted some of them—Mr. Money Mustache, Jason Fieber at Dividend Mantra, and Greg McFarlane at Control Your Cash—in previous posts already mentioned on this site. The next writer I wanted to highlight is James Altucher who runs “The Altucher Confidential” at www.jamesaltucher.com.

The one common thread that links every finance writer I admire is that they almost all regard money as a tool that can allow them to reach a particular goal in life (whether they want a sweet beach house in Foley Beach, the accompaniment of a gorgeous woman, or the ability to say cyanora to a soul-sucking job, etc.) and they often document the psychological aspects of the journey. Almost all good finance writing focuses as much on psychology as mechanics. We all know the key to … Read the rest of this article!

Beer, Banks, and Airplanes

For me, 2018 was a somewhat difficult year to find new investments because so many stocks were trading at prices that were not deals. With some publicly traded stocks seeing some real declines in December, we are now starting to see the type of deals that make you think “Hey, this has a fair chance of compounding at 13-15% over the long haul.” That type of opportunity is usually the line that brings out my full energies to the quest.

In my recent Patreon post, I profiled a beer company, a large bank, and a logistics company that are each trading what I consider to be meaningful discounts that put them each in a position to deliver annual returns of at least 13% annualized over the next five years. You can click here to become a subscriber.

Originally posted 2018-12-18 00:02:03.

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