Quote:
Originally Posted by rocketrod
Here is a simple example NOT a recommendation to buy.
I bought MO (now called Altria) in Jan 2008. Shortly afterwards they spun off PM (Phillip Morris) with a special dividend so for each share of MO I owned, I received a share of PM.
MO stock price has since appreciated 80%, and in addition I receive a dividend, which has increased from 5.27% to 8.72% on an annual basis.
PM stock price has since appreciated 90%, and in addition I receive a dividend, which has increased from 4.17% to 7.61% on an annual basis.
The investment, with dividends, has more than doubled in 6.5 years.
In hindsight, my only regret is not reinvesting my dividends from the beginning as my returns would have been even better. I have since started re-investing my dividends.
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And it truly is just that Fn simple. It's when people try to get cute that it goes all wrong.
Simple ='s Great companies, a little diversity, reinvest the dividend, don't try to get all excited about the CURRENT value... You must trust Father Time. That all works when you stick to basics. When you start to loose your ass is when you try to game the IPO market -- or buy the "next hot stock" the traders on TV are talking about.... or you buy companies you know absolutely nothing about.
The other thing that works over time - is real estate that is RENTAL... not your own house (that is NOT an investment nor is it the piggy bank!). Having someone else make a mortgage payment for you --- so they're paying your loan down -- and the house or apartments go up in value at the same time over a LONG period of time. That's a winning strategy.
Getting into some cockamamy scheme your buddy just got into.... that's how you end up having nothing to show for your years of labor. You'll never find rich people that invest that way. EVER. You'll find SALESMAN on TV trying to get rich selling you their book about how they got rich (if they're rich... why are they on TV trying to sell you something?).