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Gold Goose Inc. Keeps Banks off Your Farm

October 29, 2021 By E.J. Smith - Your Survival Guy

By Oleksandr Lysenko @ Shutterstock.com

Listen, this is how I want you to think about yourself as an investor. Imagine you own a wonderful business. We’ll call it Gold Goose Inc. It pays you a handsome salary, plus annual increases to keep up with the times. You retire with a nest egg worth more than you ever thought you’d be worth, and you need to invest it. What do you do?

Life Comes at You Fast. Slow It Down with My Friday Email. It’s Free.

For Your Survival Guy, the next best thing to Gold Goose Inc. is to invest in a basket of eggs that pay dividends that regularly increase to keep pace with inflation. That’s exactly what Young Research’s Retirement Compounders stocks try to do.

Unfortunately, too many investors believe investing is about the stock market going up in value. That’s not how to think about it as far as I’m concerned. Think about your home or farm, for example. Your goal should be to own it by retiring your mortgage. Because when times are tough, we know what can happen if mortgage payments are missed, and the bank comes swooping in like a vulture.

OK, with that in mind, as a stock investor, you’re the bank providing your capital to a company to work with. In return, you’re paid part of the earnings in the form of dividends with regular increases to boot. All of a sudden, after several years of payments, your initial capital investment has been paid back. Now, future payments are “house” money, so to speak. Read this for a real-life example illustrated in the Summer 2021 edition of the Handbook of Dividend Achievers.

Take for example a household name, Coca-Cola Co (NYSE: KO). It consistently raised its dividend every year for 49 years as of January 2012. If you had bought its stock on January 13, 2012 (when its stock was in a slight dip and priced at $66.99), you would have been able to benefit from the 0.51¢ per share dividend it declared on February 16 and that went ex-dividend on March 13 and paid on April 1. If you had bought, say 100 shares, the consideration would have cost you $6,699 (that is, without factoring in any brokerage fees). Assuming it continues to raise its dividend by about 7% a year, the dividends alone you receive would have paid off the consideration for the stock after about 17 and a half years. After that time you would be receiving a dividend, every year, of $644.40 per year, and yet you would have received your initial outlay of $6,699 back in the dividends you had received over the years. Plus you still own the stock. This is hypothetical and there are other variables. The point is that investing in dividend stocks that have a track record of dividend growth provide stability and certainty and this allows for better planning.

Action Line: Do you have a Golden Goose Inc. you want to keep in the family and nurture? Pass this along to someone you care about to keep the bank off your farm.

Originally posted on Your Survival Guy. 

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E.J. Smith - Your Survival Guy
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998.

E.J. has trained at Sig Sauer Academy in Epping, NH, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention.

E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris.

Please get in touch with E.J. at ejsmith@yoursurvivalguy.com

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