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Originally Posted by CamaroMike
I recently started an account for long term growth. Can you guys give me some input on if its a good idea and if I am diverse enough?
Im currently at 4 companies $1k basis in each company. I plan on adding at $1k increments until I hit 15-20 companies and reinvest all my dividends. Of course if there are any opportunites within I will add/subtract accordingly to how I feel about how that company is doing.
Currently with Ford, KMP, Att, Home Depot. Am I on the right path with diversity and my slow way of getting this account rolling for some big long term gains?
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You are doing quite well! Congrats!!
Remember that your "big long term gains" are going to come with long time lines... Money doubles about every 7 to 10 years. That's IF you stay invested and you reinvest the dividends. It's all about COMPOUNDING.... 2 becomes 4 - 4 becomes 8 - 8 becomes 16 - 16 becomes 32 - 32 becomes 64....
Note how the last "doubling" is also the biggest?!?!?! 64 becomes 128
That's how ordinary earners become wealthy retirees. It's not rocket science. It's common thinking - Saving first versus pissing away every dime... and avoiding debt on high interest rate stuff like 20% credit cards.
I was discussing retirement and spending with a retired buddy yesterday. This guy never made 50K a year in his life -- and he's a millionaire just in stocks - not counting his house. They're thinking about selling the current house (paid 49K - selling for 850K and has been paid off for at least 10 years) and moving to a lower cost - less stressful area. The house they're looking at is twice as nice and half the cost. So their lifestyle will improve and they'll pocket some cash which will create even more retirement income. His biggest worry.... where they're going to take their Airstream next.
His biggest mistake -- investing in 10 year treasury bonds instead of stocks. He made the switch to stocks with my help about 15 years ago. He'd have 3 times the net worth now - if he'd have bought stocks 40 years ago instead of bonds... but regardless of that "mistake" the point is that he's pretty well set.