.
You see, the truth of the matter is that you don’t need to be a stock guru to make significant amounts of money in today’s market. In fact, you need to be just the opposite–[b]you need to be a lazy investor.[/b]
That is no typo.
It is true… you really can accomplish more in the markets by doing less.
Of course, seasoned income investors themselves have known this for years.
This is why the ultra rich don’t spend all of their time watching the financial news and trading stocks. They’re too smart for that.
That’s because they know that investing in steady-income producing strategies is just as rewarding, if not moreso.
It works… month after month… year after year.
I’m going to tell you exactly why this strategy works and it’s easier than you might think.
[b][u]The 7 Golden Rules of Income Investing[/b][/u]
You see, every successful income investor lives by a certain set of rules. And if you follow them, you too can build a million dollar portfolio for less than half of what it costs to go the store these days.
[b]Here are the rules:[/b]
[b]1. Ignore the News.[/b] Warren Buffett doesn’t bother to watch CNBC, and why should you? The financial news, after all, isn’t any different than your own 6 o’clock news. Drama may draw viewers, but it’s nothing more than a distraction to long-term holders. Smart income investors set their portfolios and forget them, ignoring the shrieks of the financial press. The one exception to this rule is another; which is to buy on bad new, sell on good. Bad news usually means stocks decline, time to examine the bargains. Good news usually means stocks rise, time to examine your portfolio and dump the underperformers and your mistakes.
[b]2. Be content to take a single.[/b] Sure, home runs are exciting, but a string of singles is just as effective, and much more profitable. Yes, building true wealth takes time, but it’s completely achievable. The right Income Investing plan is the solution.
[b]3. Reinvest your Dividends.[/b] When an investor receives income, he or she has two choices. The first is to take the cash and spend it… the second is to immediately take those funds and purchase more stock. The savvy investor chooses the latter. Income reinvestment programs are an automatic way to build wealth, and they’re the perfect example of why the income investor is often the smartest one in the bunch.When buying dividend producing stocks always ask if it has a [b]DRIP[/b], a dividend reinvestment program.
[b]4. Remember the Rule of 72.[/b] Compounding is one of the most powerful forces known to man. That’s where the Rule of 72 comes in. The rule says that to find the number of years it takes to you double your money at a given rate, you just divide the interest rate into 72. For example, to figure out how long it’ll take you to turn $12,857 into $25,714 at 9%, you simply divide 72 by 9, and get 8 years. Now, what if you actually saved $12,857 a year at 9% interest—for a period of 24 years. Then how much would you have? The answer is roughly $1,076,154. Not bad, eh? Income investors know it’s the turtle that wins this race–not the hare.
[b]5. Avoid taxation.[/b] Inflation is bad enough, but taxation is even worse. As a result, smart, income investors get to know all the legal ways to avoid the Tax Man… and they execute these strategies, without fail, year in and year out. That leaves more money for the income investor to reinvest, fattening up their portfolios all along the way
[b]6. Protect your Principal.[/b] Successful income investors realize that chasing yield and yield alone is much too risky. So, instead, they search for income-producing investments with a long, solid history of earnings and plenty of future upside.
[b]7. Income Investors Don’t Procrastinate.[/b] Time, after all, is literally money. Smart, income investor’s don’t hesitate to act on opportunity.
And for those of you who may be dissuaded by the rocky state of today’s stock markets–Don’t be!
Income investing is the winning ticket in every market–even this one.
[b]The Death of The Dow Jones…and the Rise of Income Investing[/b]
By Warren Buffett’s own calculations, matching the gains of the U.S stock market over the last century is going to be almost impossible.
In his most recent annual report, Buffett pointed out that in order to equal the U.S. market over the 20th century, the Dow will need to close at roughly the 2,000,000 mark on December 31, 2099.
That means that the Dow will need to gain about 1,987,000 points to match the incredible gains in the years known as the American Century.
It was in those years that the Dow advanced from 66 to 11,497 at the close of 1999. That’s a compounded annual growth rate of 5.3%, an impressive achievement to say the least…
But let’s be realistic…
The Dow closing at the 2 million mark by the end of the century is nothing short of a pipe dream, maybe. I’ve learned never to say never.
After all, nearly a decade into the new century, we’ve added barely 1,500 points. And at that pace, it would take until the year 2174 to reach 2,000,000. The “Oracle of Omaha” himself even said we’d have to be extremely lucky to crack this mark over the next 92 years…
So, this raises the million-dollar question: How can we hope to match the performance of the last century when it’s clear that U.S. equities, as a whole, aren’t likely up to the challenge?
The answer is two-fold:
You’d have to be an incredibly brilliant and proficient stock picker, or…
You’d need to juice your returns with steady monthly income payments.
You see, investing for income allows you to win two ways–steady cash payouts and significant price appreciation.
And by taking advantage of both the growth and income sides of the investing map, you can achieve unbelievable returns–even if you’re a novice investor.
Remember invest in [b][u]value[/b][/u]
[b]Dawg[/b] ]:)
