FOLLOW ME AND LET’S MAKE $5.8 MILLION. OR GO THE EXTRA MILE FOR $8.1 MILLION. I’LL MAKE IT EASY ON YOU.
Ok before we get started… before you have to listen to me rant on about doubling your money or looking for value or stashing cash or not worrying so much about debt reduction… my biggest question this week is HAVE YOU STARTED YOUR MOTIF INVESTING ACCOUNT YET?
I mean, I appreciate your loyal readership. Five hundred people are reading this blog week in and week out. On Medium. On Twitter. On LinkedIn. And on Facebook. Can’t wait until its 5,000+. But we are off to a GREAT start. Thanks so much for reading. It means the world to me (and Mrs. Pearly Pig too!)
I’m giving you very actionable ideas that are proven to be great additions, or a great start, to an investment portfolio. But it’s going to be REAL hard for you to take advantage of them if you don’t have a Motif account.
Motif has a free option (but they charge every time you trade), and they have a Blue account ($19.95/month). This comes with three free trades each month (that pays for it right there), and if you place some trades that you don’t mind filling until the next market day (I do this often), they’re always free with Blue. You get some other cool stuff too with Blue. And they’re going to give you the first 3 months free. That’s nearly $60 of value. And that’s pretty cool of them.
If you decide you’re going to get in the game and start taking action, you’re going to want Blue. So stop. Drop. Roll. And sign up for a Motif account before reading on.
(What’s in it for me you may ask? Great question. I get a month of Blue for free for each person that signs up with the above link. Thanks for asking :)
Gratuitous Pretty Financial Picture
Ok. Let’s get on with it.
This week’s Barron’s is a pretty standard issue. This week’s edition included their quarterly Penta magazine (for $5 million+ households) which is usually a fairly gratuitous magazine featuring expensive things and services to buy (airplanes, watches, scotch, and third homes).
But I was most fascinated by this week’s list of best CEOs. To the point that I had to go build another Motif portfolio with just this list of companies. You can find my corresponding blog for that portfolio in my Medium Pearly Pig publication. I’ll make it public later this week.
The feature article was about Viacom (VIAB), which is a pretty dicey story since the stock has been in turmoil for quite awhile now — case being made that they’re now out of the woods and there is investment opportunity here.
Add fodder to the fire of turn-around stories… Barron’s also discusses Yahoo! (YHOO) and how long we (I’ve been a YHOO investor for about 18 months now) have waited for the break up strategy to play out, and a feature article about Highland Capital’s Jim Dondero in his “Bet Big Win Big” investment philosophy. I guess we write about Wall Street tycoons and strategies that emulate them when the market, and Washington D.C. isn’t giving us much else to talk about.
After all, do we really want to discuss Trump’s headlines and the GOPs failed go at reforming the American health care system?
I didn’t think so.
Another couple of themes that have been coming up now for a month or so, across many different credible sources, is 1) oil has been sagging but there is opportunity here, and 2) small caps might finally shine and beat large caps in 2017. This week’s edition highlighted both themes (again). And so this week’s portfolio has two different exchange traded funds (baskets of stock, if you will) inside of it — one that focuses on oil and one that focuses on small companies. So we’ll see if there is any muster to these.
I invested a little light on this week’s portfolio. Primarily because I’m not all that super pumped up and wild about this week’s ideas (albeit that is probably exactly when I should invest the most).
But also because I saved little investment power for the Best CEOs portfolio.
I usually try to invest $1,000 each week into the Barron’s Picklist portfolio. But this week I put $500 into the Picklist portfolio and then put $1,000 into the Best CEOs portfolio. The Best CEOs companies have kicked S&P500 butt over the past 12 months, when the S&P500 has done pretty well on its own.
It’s simple really. The Best CEOs lead the best companies. The best companies outperform the general market. It’s called “Best of Breed.”
If you’re following along at home, that means I try to invest about $50,000 — $75,000 a year into this strategy.
That doesn’t always mean new money though. I understand that you may have a hard time shaving your cable bill, cutting out the latte, the craftbrew, and the gym membership enough to get to fifty grand.
But realize that I’m also rolling money out of old (at least 18 months old) portfolios and strategies and into the new portfolios.
So don’t sweat it too much here. And I only began making my work public since December 2016 — so we haven’t even had the opportunity to discuss rolling from an existing portfolio. Don’t worry, just keep investing and getting that cash to work. When the time comes to possibly roll from one portfolio to another, I’ll fully explain what I’m doing, why I’m doing it, and how you can follow along. And it will be a piece of cake for you, promise.
Because Motif portfolio minimum investments are $250, I’d love for readers to try to reach that goal — invest $250 in each portfolio I build.
Follow along here. I do 4 Barron’s Picklist portfolios each month — once each week. That’s about $1,000/month. I also usually do 1 or 2 special portfolios, like this week’s Best CEOs portfolio. Investing in the special portfolios would up your game another $250 — $500, maybe to $1,500/month or so. That’s $12,000 — $18,000 per year.
I do believe that most people, if they live a modest and efficient lifestyle, can get there. Even if your current cash flow simply won’t allow this kind of activity, it may be time then to figure out a side hustle or two to find the extra flow to get that money working. Uber? eBay? Gift Cards? Blogging? PT Job? What’s holding you back?
The majority of Millennials (something like 60% or so), in a recent poll in Time or Newsweek or the Wall Street Journal or somewhere (sorry, didn’t cite that one very well), said they believed they would need a million dollars to retire. (If someone finds that poll/article, please post it with a comment here). So if it’s going to take a million dollars, there’s no time like the present to get to work.
Just a quick reminder and then I’ll let you get on your merry way (or get on to reading the next blog about the world’s top CEOs or why I hate Starbucks or why investing in water may be our best answer to match historical returns only seen by Berkshire Hathaway)…
I went over to Dave Ramsey’s website to play around with some investment projections. Full disclosure — he has no idea who I am, and I’m not necessarily suggesting I love 100% of his views. I just love this easy-to-use calculator. And love his philosophy regarding investing — quit being scared and procrastinating — get to work and get in the market.
Anyway, I punched in a few assumptions, like I’m 30 years old and will retire at age 65. BTW — if you’re 30 now, the current assumption is you’ll retire at age 67 — that’s when you’ll possibly start receiving social security. And I’m betting that will soon rise to 70 and maybe even rise one or two more times in your lifetime. So 65 is pretty dang generous.
So age 30, and retire at 65. Also, as I suggested above, this 30-year-old saves $12,000. I’m assuming this 30 year old also has ZERO cash stashed away for retirement right now — that they’re just starting. If you’ve got a head start, AWESOME. If not, don’t sweat it too much. Just time to get to work.
And I punched in 12% hypothetical growth. If you read Dave’s disclaimer on this calculator, he explains how the long term 30-year track record of the S&P500 is 11% or so. Correct.
And if that’s what you want (average), then go buy the SPY exchange traded fund (ETF) in the open market on MOTIF, STASH, or TD AMERITRADE — or wherever you’d like (just don’t hire a broker/financial advisor to do something as mundane as invest in an exchange traded fund.) It’s super cheap and super simple. Don’t have to think about it. No brainer.
I’m assuming you don’t want average.
That’s why you’re following me at the Pearly Pig.
Because I’m ruthlessly dedicated to beat the market year in and year out. I’m hoping to double my money every 5 years. You do the math. That’s 14.4% per year after fees and after taxes. That’s right. Every 5 years.
Now let’s finish this calculation.
35 years. 12% growth (that’s doubling your money every 6 years). $12,000/year. And that gets us to $5.8 million.
YES. YES. And YES.
Inflation will be a bitch, no doubt. But a 4% withdrawal rate on $5.8 million will be $232,000. If I have all my debt paid off by that point, then that’s a lot of travel and spoil-the-grandkids dough. Sweet.
Lastly, what I love about Dave’s calculator is a couple of not-so-subtle suggestions at the bottom of it. What if I change my “go-out-and-eat” habits. What if I brew some coffee and use creamer at home rather that drive through Starbucks? What if I simply add another $100/month to my savings plan ($12,000/year to $13,200/year?)
Well…. pretty significant things happen over 35 years of subtle lifestyle choices. What if you figure out how to do all 3? That’s an extra $2,303,306 in the bank (or in your Motif account).
If you want to play around on it yourself, go check out Dave’s calculator here.
And that’s what we love at the Pearly Pig.
I’ll stop taking up your time as promised. Read up on some other Pearly Pig blogs. Shoot me your questions at firstname.lastname@example.org. But most importantly, go get yourself signed up at Motif and get started today by throwing down $250 in this week’s Barron’s Picklist 3–27–17 portfolio or BEST CEO’s portfolio.
I’ll be posting my blog about “Why I Hate Starbucks” later this week. Look for it and share it. Otherwise, see you in a week!
Ryan @ The Pearly Pig