Investing 102

[GregWeld]

Originally Posted by toy71camaro

I should be done with my Emergency fund soon, and can start getting back into investing into my future. My goal is 10% of my income into a non-retirement account and 10% into a retirement account (Roth).

Albert -- that might seem really painful to many folks -- but think about how painful it's going to be if you DON'T do that!


So many play now - thinking they'll somehow take care of everything later.


Like I said to a buddy the other night --- Dude! If it costs you 150K a year to live right now - and you want to live the same in retirement…. that's the income off 3 MILLION DOLLARS! He stared at me like a deer in the headlights. Given that he's 62… I'm thinking he might be in a dark tunnel and there's a train on the other side.

[SSLance]

Originally Posted by GregWeld

Altria (MO), maker of cigarettes and other tobacco products, shifted all its ownership of Philip Morris International to shareholders. If you owned Altria on March 19, 2008 you were given shares of Philip Morris International on March 28, 2008.Shareholders received one share of Philip Morris International for every share of Altria they owned.

Lance --- Go back and refigure your MO scenario If you'd just bought them the first day they traded as separate companies (because we know those costs and dates).

We know Altria closed at $22.20 on March 31,2008 the first trading day after PM was split off. That day, Philip Morris International closed at $50.58. The value of the two stocks together on that date was $72.78

Today -- the two stocks combined trade for $122.34

In March of 2008 PM paid .46 a quarter -- today it pays .94
In March of 2008 MO paid .32 a quarter -- today it pays .48

So, just quickly -- since 2008 you had a cost basis of $72.78 and you're now picking up a 1.42 per quarter or $5.68 per year. The dividend is now paying you 7.80% based on your cost. AND you have a $49.56 unrealized long term capital gain. That's a 68% capital gain so far.

What part of that is hard to grasp?

5 year TOTAL RETURN on PM --- 152%

5 year TOTAL RETURN on MO --- 229%

I don't know - maybe it's just me…. The way I FIGURE IT… it might be part of why I'm sitting pretty and retired and running my race cars and hot rods… (forget that we were LUCKY AS HELL to begin with - I still have to manage that).

Boom!! Now that wasn't so hard, was it?

I figured that MO holders got something out of the spin off, but hadn't looked into exactly what. Looks like those that held onto PM afterwards did pretty well also.

Today should be one of my business's busiest days of the year (hopefully) and this week one of the busiest weeks as well...so I won't have time to look around much this week. I have caught up on reading the thread though and am soaking it all in.

This week will be more about making money the other way though...for me anyway. Keep up the good work everyone, love reading the success stories.

I'm off to pack and ship some Christmas gifts...

[GregWeld]

Have a Merry Christmas!


We'll all still be here when you're done shipping stuff!!

Originally Posted by SSLance

Boom!! Now that wasn't so hard, was it?

I figured that MO holders got something out of the spin off, but hadn't looked into exactly what. Looks like those that held onto PM afterwards did pretty well also.

Today should be one of my business's busiest days of the year (hopefully) and this week one of the busiest weeks as well...so I won't have time to look around much this week. I have caught up on reading the thread though and am soaking it all in.

This week will be more about making money the other way though...for me anyway. Keep up the good work everyone, love reading the success stories.

I'm off to pack and ship some Christmas gifts...

[toy71camaro]

Originally Posted by GregWeld

Albert -- that might seem really painful to many folks -- but think about how painful it's going to be if you DON'T do that!


So many play now - thinking they'll somehow take care of everything later.


Like I said to a buddy the other night --- Dude! If it costs you 150K a year to live right now - and you want to live the same in retirement…. that's the income off 3 MILLION DOLLARS! He stared at me like a deer in the headlights. Given that he's 62… I'm thinking he might be in a dark tunnel and there's a train on the other side.

Well, I started fairly early, an old store manager that i worked at when i was 19 suggested i start a 401k ASAP (they'd just changed the laws so i would be eligible). His quote stuck in my mind (every 7 years it doubles, if you start now, think about those extra last 2 doubles you'll get!!). Anyhow... If i'm so lucky as to save $5k a year going forward, investing that and earning 7% rate of return, by the time i'm 65 i "could" have upwards 1.5MM. BUT, I hope to be earning MORE than a measly 7% and contributing MORE than the $5k/yr.

[GregWeld]

Originally Posted by toy71camaro

Well, I started fairly early, an old store manager that i worked at when i was 19 suggested i start a 401k ASAP (they'd just changed the laws so i would be eligible). His quote stuck in my mind (every 7 years it doubles, if you start now, think about those extra last 2 doubles you'll get!!). Anyhow... If i'm so lucky as to save $5k a year going forward, investing that and earning 7% rate of return, by the time i'm 65 i "could" have upwards 1.5MM. BUT, I hope to be earning MORE than a measly 7% and contributing MORE than the $5k/yr.

Just know that I'm bowing to you!!!


'Cause that right there is awesomeness!


The reason for setting the bar LOW (the 5% I always use) is so that there is an upside surprise rather than a fudge it factor that is just plain BS. The AVERAGE market is around 9 to 11% -- which at that rate - doubles money every 5 years rather than 7…. but if you count on that and save that way - you'll end up short. Better to end up way better than way short!!

[toy71camaro]

Originally Posted by GregWeld

Just know that I'm bowing to you!!!


'Cause that right there is awesomeness!


The reason for setting the bar LOW (the 5% I always use) is so that there is an upside surprise rather than a fudge it factor that is just plain BS. The AVERAGE market is around 9 to 11% -- which at that rate - doubles money every 5 years rather than 7…. but if you count on that and save that way - you'll end up short. Better to end up way better than way short!!

Thanks Greg! I'm learning that I really dig this kinda stuff. lol

[toy71camaro]

On a side note. Today was dividend payday for me and my fellow MCD, KO and ED owners. Woot!

[WSSix]

woot! I got paid today too.

[96z28ss]

Originally Posted by toy71camaro

On a side note. Today was dividend payday for me and my fellow MCD, KO and ED owners. Woot!

All ready this month I got paid from F CHD PSX COP OLN ED MCD KO
then on the 19th I'm getting an AIG dividend.

Keep them coming.

[GregWeld]

You guys crack me up!!


Don't ya just love getting money for nuthin'????



Glad this is working out okay for all of you!! Merry Xmas!