The Easy And Hard Ways To Create Million-Dollar Fortunes

I am friends with a woman whose father is a partner at a law firm in Missouri. I do not talk about her dad’s occupation much, other than the fact that she constantly mentions that her dad works a “ridiculous amount of hours.”

Me, being me, I immediately sought to put some labels and back-of-the-envelope numbers on what I knew, and then I wanted to relate those facts back to business ownership, on a comparison basis.

These are the estimates I came up with:

Although “ridiculous hours” is a vague term, I guessed it to mean something roughly analogous to this:

8 AM-7 PM daily, with an hour for lunch.

6 hours aggregate on the weekend.

48 weeks per year of work.

That means= 10 hours per day for 5 days, plus an extra six spread out over the course of the weekend. In other words, a 56 hour workweek.… Read the rest of this article!

The Promised Land of Dividend Investing

Sometime in the past twelve months, Realty Income did it. Since becoming a publicly traded company three and a half decades ago, every dollar that you invested into Realty Income back then would be paying you $1.00 in annual dividend income this year. In the next five years, the dividends alone should give you more than 5x your initial investment. That is what can happen when you buy an ownership stake in a business that relentlessly churns out cash, and then you allow it to keep doing its thing while you grow older.

For those of you who are curious about yield-on-cost, here is what the data looks like for thirty-year investments in the following companies, without any dividend reinvestment:

If you bought Coca-Cola in 1983, your $1000 would have grown into $74,000. You’d have $2,125 in annual dividends coming your way. Basically, you’d be looking at a dividend yield-on-cost … Read the rest of this article!

Don’t Tell Jason Fieber He Can’t Retire By Age 40, Professor

If you would listen to Rob Weagley tell it, it’s a foolish game to try and pursue early retirement. He was recently quoted in The St. Louis Post-Dispatch speaking approvingly of bloggers that encourage readers to get out of debt, but he took a needless shot at investors pursuing an early retirement. Here’s his full quote on the usefulness of the personal finance blogosphere:

“There are dozens of similar blogs on the Internet in which people who aren’t financial experts share stories and tips for dealing with money.

They are generally a good thing, because they motivate readers to improve their finances, says Rob Weagley, who chairs the department of personal financial planning at the University of Missouri-Columbia.

“I think these bloggers can sometimes get people excited, turn the switch on and get them to actually do something.”

That said, he notes that not all the advice is good.

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How To Find Success, Wealth, and Good Fortune In The Stock Market

If you follow the Fama-French models or read the work of people like Larry Swedroe who espouse something called “the efficient market hypothesis”, you may think that it is dumb to invest in individual individual stocks because everything is already “priced into the market.”

This kind of logic is wrong, and I will tell you why: the value of any individual stock is always going to be determined by the amount of cash that it generates in the future, discounted back to the present. Of course, there are other factors that feed into this—What does the company’s balance sheet look like? What is the earnings quality/economic moat of the company? What is the probability that you can predict future profits—is this something with stable earnings like General Mills or wildly fluctuating performance like Sirius radio stock?

Since we do not know what the future will bring, we can never definitely … Read the rest of this article!

My Coke Rewards: What Happened?

As someone who owns Coca-Cola stock because it controls 3.5% of the world’s liquid beverage supply and earns obscenely high profit margins of 29%, I follow the beverage maker’s marketing efforts over the years. In particular, I paid attention to My Coke Rewards, which was launched in February 2006 before being discounted on June 30, 2017.

The purpose of Coca-Cola’s reward program, like any other, is to try and convince its customers to be more loyal to its brand or consume more of its product than would otherwise be if the case due to an incentive. Maybe this means forsaking the occasional Dr. Pepper, or hitting up the vending machine for soda when tap water would do.

What is interesting to me is this. When Coca-Cola first launched a reward program in 1992, it would simply give customers a peelable entry that would tell them whether or not they … Read the rest of this article!