Investing 102

[GregWeld]

INTERESTING......




5. Millionaires are not necessarily super savers.

You don’t have to sock away 30%, 40%, or 50% of your income to amass $1 million (though that would help get you there faster). In an analysis of 401(k) savers who made less than $150,000 a year and still had more than $1 million in their plans, Fidelity found that those millionaires saved only 14% a year on average.

Their secrets? Save steadily, of course. And let the company do some heavy lifting. Fidelity’s 401(k) millionaires saved 19% on average when employer contributions were included, and 28% of their account balances came from the match. In fact, a new study from the Center for Retirement Research confirms that saving 15% a year for three decades is enough for a comfortable retirement.

6. About 15% of millionaires didn’t bother with a college degree.

Mark Zuckerberg and Bill Gates aren’t the only millionaires without diplomas. Spectrem Group found that 85% of millionaires have college degrees. Another 12% attended college and dropped out. On the other hand, 31% earned an advanced degree.

7. The young generation of millionaires lives lavishly.

Gen X and Y millionaires have had less time to reach seven figures, so not surprisingly they tend to earn far more than their baby boomer millionaire brethren: $677,000 a year on average, vs. $198,000 a year, reports Fidelity. And they tend to act the part to the hilt: 63% of Gen X and Y millionaires own vacation homes (vs. 21% of boomers), 44% own boats (vs. 12% of boomers), 63% belong to country clubs (vs. 15% of boomers), and 38% fly first class (vs. 5% of boomers).

8. Ultra-millionaires love Home Depot.

Where do the wealthy shop? Not where you’d think. About 57% of millionaires worth more than $5 million say they shop at Home Depot all the time, according to the Spectrem Group. Other favorites include Costco, Lowe’s, and Target. Only 8% say they regularly shop at Neiman Marcus.




I drove 4 hours round trip yesterday --- to go to COSTCO....

[SSLance]

Sold my 70 shares of MCD today... What Greg says makes a lot of sense.

I haven't decided what to replace it with yet, but I will soon.

I'm up 9.61% overall since rejoining the market in February and have booked over $1200 just in dividends during that time period...with more to come soon. And I'm still only about 33% invested.

Should I have been putting more in, sure...but at the same time this last little dip didn't bother me in the least. I remember all too well all of the nights spent worrying about dips like that. This time it is different, and I'll continue on with my plan of just putting in what I'm most comfortable with and learning as I go.

[Sieg]

On a similar note, a few years ago I bought both ATT & VZ due to dividend rates. ATT has delivered a 13% gain, VZ 26%. As a satisfied VZ customer I'll be rolling the ATT shares into VZ when the timing is right.

As a current Comcast customer...........there's no way in h*ll I'd buy their stock.

[GregWeld]

Originally Posted by SSLance

Sold my 70 shares of MCD today... What Greg says makes a lot of sense.

I haven't decided what to replace it with yet, but I will soon.

I'm up 9.61% overall since rejoining the market in February and have booked over $1200 just in dividends during that time period...with more to come soon. And I'm still only about 33% invested.

Should I have been putting more in, sure...but at the same time this last little dip didn't bother me in the least. I remember all too well all of the nights spent worrying about dips like that. This time it is different, and I'll continue on with my plan of just putting in what I'm most comfortable with and learning as I go.

And that's exactly the way you should be doing it Lance!! And good for you on the returns!

Originally Posted by Sieg

On a similar note, a few years ago I bought both ATT & VZ due to dividend rates. ATT has delivered a 13% gain, VZ 26%. As a satisfied VZ customer I'll be rolling the ATT shares into VZ when the timing is right.

As a current Comcast customer...........there's no way in h*ll I'd buy their stock.

Yes -- I too used to own both... then thought that was dumb. Turns out I'm dumb. But I sleep fine at night knowing T (or VZ) is a good company that will continue to contribute to my retirement bliss.... 13% isn't as good as the 26% but it could have just as easily been the other way around. What I don't like is to see DOWN 1% vs someone else that's doing WAY better!!

[GregWeld]

Found this "calculator" via Seeking Alpha.... it shows the power of compounding.

It's completely hypothetical of course because you wouldn't be using real actual numbers of a particular stock. But it certainly is a powerful "message" when you see the numbers even if you just use the 100 shares at $100 -- leaving all the 5's in place -- but change the number of years to 30... or then change that to 35 etc.

Mostly what it compares though is the power of REINVESTING the dividend versus what I do - which is spend it (But I'm already retired). LOL



http://www.buyupside.com/calculators...tmentdec07.htm

[Vegas69]

Looks like my purchase of Costco was just in time.

[GregWeld]

Originally Posted by Vegas69

Looks like my purchase of Costco was just in time.

That's the thing about investing. There's never a good time in anyone's mind. That's the biggest hurdle to get over. Doesn't make any difference if a guy is buying $100 -- $1000 -- $10,000 or a million at a time.... I personally guarantee the stock you picked WILL be lower than your cost basis at some point. Usually 15 minutes after a guy buys. I will also guarantee the shares will be higher right after you sell. It's that long space in-between where the money is made.

The other day I decided to cut my holdings in British Petroleum Prudhoe Bay Trust (BPT) by half... I held 20,000 shares and while it pays a huge dividend percentage -- There's other stuff I want to buy -- and I like to always have pretty substantial cash positions. So I put in a limit sell order at $92 - which was well above the current trades... I put in orders like that and then go do something else. If they get sold fine - if not - the shares are still in my account and we'll try it another day. Of course they sold - and the shares closed the day at $92.50. 50 cents per share @ 10,000 shares is $5,000.... So I left a little on the table. But I don't get caught up in that - because I know I'll never ever get it "right". I just do what I want/need to do. I still had a very nice gain in the shares on top of the outsized dividends collected.

My point -- it takes time to get over "losing" the last nickel of gain.... and it takes time to get your mind right that no matter when you buy - you probably could have waited and bought cheaper. In the long run - it just doesn't matter.
You do get used to it.

Kind of like the housing market. Most must sell to buy another.... we wouldn't buy another if we thought the market was going to hell.. so at some point we must put up a for sale sign -- close a deal - and take the plunge into the next home. We just KNOW that it's going up over time so we're okay with it. I never can figure out why that's okay but stocks are thought of differently.

[Vegas69]

I was just kidding around since you mentioned your trip to Costco.

[GregWeld]

Originally Posted by Vegas69

I was just kidding around since you mentioned your trip to Costco.

Still gave me good segue for a good post!


I don't own Costco (COST) because the dividend is just too low for
me... but it's a good well run outfit.

[Vegas69]

I sold off Target and bought Costco. The retail market seems saturated, Costco appears to have somewhat of a niche. I'm not going down there and wasting 3 hours of my Saturday for bulk jalapenos and two cents off gas, but hey, I see value there.