What screws a lot of people up from accomplishing good things in life is this desire to wait for the moment to be perfect before beginning. The problem with that mentality is this: there will never come a moment when everything seems perfect for you to get started.

I remember how my writing on the website Seeking Alpha got started. At the time, I was working for a Missouri Congressman from 8:00 AM to about 6-6:30 PM. For a while, I told myself that I’d wait for things to “settle down” before I’d get started. Eventually, I realized that I was only two weeks away from returning to college (and I’d be busy doing lord knows what, then) and if I didn’t hunker down and start writing, it would never happen.

I had this vision in my head of being able to sit down for an afternoon and pour through annual reports and write these epic analyses 3,000 word analyses of ExxonMobil, Chevron, ConocoPhillips, and so on, but then  I quickly learned I would never accomplish anything if I waited for that moment to arrive. I had an hour here, an hour there, and I grinded it out. And now I am here two years later, still finding a way to spend sixty to ninety minutes each day talking about personal finance. If I waited for everything to get perfect two years ago, none of this would have happened, and I can guarantee you that this site wouldn’t be here today.

I mention that story for one reason. When I talk to some of my readers via e-mail that are looking to get an investment program started, I sense that they are waiting for that chance to get everything perfect in their personal lives before they get started investing. The problem with that kind of thinking is that it leads to paralysis—either you’ll needlessly delay your investment plan, or you won’t get started with it at all.

Look, there is no such thing as the perfect investment. But you can always acquire a high-quality asset that will send you a share of the profits on four different days each year. Between Coca-Cola, ExxonMobil, Procter & Gamble, Johnson & Johnson, and Colgate-Palmolive, I have no idea which of those five companies will post the best total returns over the next ten years. I know I would be perfectly happy to own any of them on a ten to fifteen year, basis. Heck, hopefully, I’ll reach a point where I own each of them. That’s twenty different high-quality dividend checks coming into the bank account over the course of the year. That ain’t bad.

If you need to get started, just apply a quick and dirty test to pick a company to meet you needs:

(1) Find a company that has grown profits in at least seven of the past ten years, and hopefully it’s 2012 profits are much higher than its 2002 profits.

(2) Make sure it has raised its dividend every year during that time period.

(3) If it is an oil company, make sure it is trading below 10x earnings. If it is a consumer staple, utility, healthcare company, or conglomerate, make sure it is trading below 20x earnings.

(4) Ideally, it has a diversified set of products it sells which, in your common-sense judgment, will be around for awhile. For instance, I’d be willing to bet parents still give their kids Johnson & Johnson’s Tylenol when they are sick, Colgate toothpaste to brush their teeth, wash their clothes with Procter & Gamble’s Tide Laundry Detergent, and so on.

Then, go to a website like computershare.com and make sure that the company charges less than $1.00 for each purchase transaction. Many of the companies are free. For instance, Exxon Mobil charges no fees whatsoever to purchase their stock. If you got in the habit of purchasing $100 worth of Exxon every payday, you would buy $200 worth of Exxon stock each month and $2,400 each year. That would give you $67 in immediate income, and here is the kicker, it will grow every single year thereafter, assuming people still consume oil and natural gas in a way that the Big Oil companies can achieve 10% returns on equity over the full course of the business cycle.

The point is this—the key to everything is stop thinking about doing something intelligent, and finding ways to structure your life so that you do something intelligent.

Originally posted 2013-07-15 08:42:59.

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