Many people wait until they have a disposable income before they start investing. This is one of the worst mistakes one can make if they want to retire comfortably. The sooner one invests, the less they need to invest and the more they have in retirement.
When investing in physical gold, there are tricks to make sure that one gets the best bang for their buck. Sometimes, one can purchase numismatic gold for close to spot price rather than simply investing in gold bullion. This allows the gold to have both a collector value as well as an intrinsic value as a hedge against the price of gold dropping.
One does not need to constantly buy low and sell high to generate gains in the market. There are different ways in which stocks grow over time without needing to be actively trading in them. For an investor to sit and wonder if they should sell or panic if the market goes down can lead to insanity. Simply invest and almost forget about it and watch your investments grow.
The reason to almost forget about it and not to entirely forget about it is that one has to monitor a company. If a stock goes down because the market is down, no worries. If a stock goes down due to a systematic issue in a company, it is vital for one to eliminate that stock from their portfolio. Imagine if one held on to Sears stocks, for example, since they became under the helm of Eddie Lampert who is actively running the company to the ground by managing it as he does his hedge funds rather than update the stores and maintain competitiveness.
Many people are aware of the power of compounding but do not understand how it can result in hefty returns. This video explains how dividend increases reduce the amount of years for one's investment to double. The shorter amount of time it takes for an investment to double, the more doubling periods one has before retirement leading to the greater the wealth in retirement.
When I talk to people about stocks, since it's in their best financial interest to be investors, rather than not having any wealth for retirement, many folks don't feel like they know enough to get started. I do not come from a business background, but a scientific one. This may be a reason why I can see things differently than people indoctrinated in the wrong ways of doing businesses. It is also one reason why I don't care about dabbling in bonds, futures, options, etc., but simply stocks. Here are a few things that may help one gain some knowledge about investing in stocks.
Recently, the 2018 Farm Bill was passed into law making Hemp federally legal in the United States again. This can lead to huge gains in the cannabis industry. If an investor picks a winning cannabis penny stock, cashing out may not necessarily be the most profitable thing to do.
It is generally known that making one additional mortgage payment, applied to principal, each year can cut down the time to pay off a 30 year mortgage, by almost half. However, with low interest rates in recent years, one can take advantage of their mortgage to generate more revenue in the market.
In my previous video, Growth Stocks Versus Trusts, where I compare growth stocks to value stocks, I illustrate how companies which increase their dividends over time will generally surpass trusts in their dividend revenue. This video explains how one can find out if a company has been increasing their dividends over time, or not.
In this video, I compare the difference between growth stocks and value stocks (trusts) and illustrate which can generate revenue faster versus longer term potential. While trusts generate wealth a lot sooner than growth stocks, in terms of dividend payout-not capital gains, the dividends from growth stocks end up surpassing trusts after a few decades.
Compounding dividends are more than just earning a dividend revenue. If they were simply that, they would be no different than a certificate of deposit (CD) or money market account. However, many companies increase dividends over time and this vide illustrates how, in doing so, they result in exponential rowth.
Ok. So this video does not deal with stocks. However, it does deal with stocking up in Silver. One reason to do so is to diversify one's portfolio. Unlike stocks, however, silver does not pay dividends and one has to sell in order to cash out. Dividend paying stocks on the other hand, can generate cash flow while still holding on to one's investment.
This is my first investment video where I explain how compounding dividends can generate wealth. I also illustrate how many stocks which are set up as trusts, also known as value stocks, have higher dividend payouts than growth stocks. This is due to their requirement under law to pay the shareholder at least 90% of the revenue.
