Get the Miracle of Compounding Working for You

Friday, 08 Mar 2013 07:41 AM

By Bill Spetrino

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Many Americans older than 70 survived the Great Depression, and despite being immigrants without connections, trust funds or a fancy education, they built themselves a significant nest egg while providing their children and grandchildren with the education and advantages they never had.

Sadly, their thrift and determination wasn’t passed down.

Many seniors worry about passing a “legacy” to their heirs. Even worse, many of their adult children have consciously, or unconsciously, funded their current lifestyle with doses of financial “outpatient care” from their parents and grandparents.

Editor's Note:
Small-Town Ohio Accountant Uses Simple Forgotten Secret to Help Investors Pocket Millions


Today, many senior citizens have their money in banks (which nearly went broke four years ago) and collect 0.5 percent interest. Banks are backed by a country that is $16 trillion in debt and running deficits that are shameful.

That sounds kind of risky to me.

Why not own shares in a company that pays a handsome quarterly dividend and has a high probability of capital appreciation? For example, a company that’s more than 100 years old with a cash flow in the billions of dollars — and which hasn't run a deficit in more than 50 years.

I would rather trust such a company with my money than trust the U.S. government with it.

The key is knowing at what price to buy such a company.

A person who saved $500,000 used to collect 5 percent risk free on their money in a money market fund, and with their social security, they could live without depleting their nest egg.

Today, their interest income has been cut by almost 90 percent.

And a person who is 60 years old could very easily live another 36 years.

If they have $500,000 and if it compounds at 2 percent annually they would have about $2 million in 36 years. The same $500,000 at 12 percent would be $32 million.

Can you see the difference?

Your job is to find an adviser you can trust to be honest and competent.

Honest is easy. Someone who charges you a low daily fee with a money-back guarantee isn’t trying to take advantage of you. But many so-called gurus want $5,000 or more up front for a yearly subscription.

The second part is harder: finding someone who has already achieved great success in finding dividend-yielding companies.

Obviously, a person who at age 32 was nearly broke — and at age 50 has an annual dividend income almost twice their annual living expenses — is better than someone 65 years old who went to Harvard and only has $10,000 of annual dividend income, as is an adviser with a documented track record of success through Hulbert Financial digest.

Predicting rain doesn't make you wealthy, building arks does.

Now, stop predicting the weather and start looking for someone who can build you your own personal ark that combines safety, growth and income.

Editor's Note:
Small-Town Ohio Accountant Uses Simple Forgotten Secret to Help Investors Pocket Millions


For less than $2 per week and a money-back guarantee, you can hire someone who fits that description.

ME.

The only person stopping you is YOU.

About the Author: Bill Spetrino
Bill Spetrino is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of the Dividend Machine. Discover more by Clicking Here Now.

© 2014 Moneynews. All rights reserved.

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