You Must Think Long-Term

A few weeks ago, I was listening to The Steve Harvey Radio Show.  He told a story about something that happened to him many years before he became rich and famous.

At one point, when he was an up-and-coming comedian getting paid here and there, he succeeded in saving about $33,000.  He entrusted his business manager to manage this money.

One day, he went to the bank to withdraw some funds.  To his surprise, his account was at zero.

When he arrived at his business manager’s office to find out what was going on with the account, all of the furniture was gone – and so was his business manager. Steve never heard from him again.

Losing his life savings at that time was devastating.

Fast-forward 30 years.  Now ask yourself: how stupid was that business manager?

You see, today Steve Harvey earns tens of millions per year.  As his business manager, you get 10%.  That’s one million a year.

So in essence, Steve’s former business manager sacrificed $1,000,000 a year for $33,000. Why?  Because he failed to think long-term.

See, investing in Steve Harvey 30 years ago would have been like investing in a young, exciting company with great potential.  Taking the $33,000 and running is akin to buying shares of this young, exciting company at $7 and then selling at $14…only to watch it go to $325, like Netflix.

Remember…investing in stocks, or in anything else, is all about the long term.  That’s what we Wealthy Joes must focus on.

If you are new to investing, or know someone who would like to start investing but doesn’t know where to begin, please check out my book, The Stock Market is for Everyone.  It’s available as both an e-book ($3.99) and a paperback ($9.99).  Like these posts, it is quick and easy to read.  And if you read the book and still have questions, you can reach out to me. 

Until next time!

 

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)

 

How a Secretary Built a Fortune

In the May 10th edition of The New York Times, there was an incredible story about a woman named Sylvia Bloom.

Ms. Bloom, who passed away in 2016 at the age of 96, worked her entire life as a secretary.  She also managed to accumulate a $9,000,000 fortune.

What I find so fascinating about this story is that no one who knew her had had any idea that she was worth that kind of money.

The article demonstrates a perfect example of how to build wealth by letting your money compound over many years, as I describe in my book, The Stock Market is for Everyone.

Ms. Bloom did three critical things – things that you must do in order to build wealth.

  1. She paid attention.  When her boss bought shares of companies, she didn’t just place their orders.  She had the presence of mind to piggyback them, and each and every time buy a smaller amount of the same stock(s) for herself.
  2. She lived well below her means.  This is huge.  Most people suffer from lifestyle-creep – meaning that the more we make, the more we spend.  Look, I am in no way saying that we shouldn’t enjoy life.  But we do need to be smart with our spending.  Ms. Bloom packed a bag lunch for work each day, and took public transportation.  These are two excellent examples of ways to keep spending down that any of us can model.
  3. She got rich slowly.  She let time do its thing, allowing her investments to compound over decades.

Warren Buffett was quoted on this week’s episode of The Motley Fool’s Rule Breaker Investing podcast as saying that most of us are interested in getting rich quick as opposed to getting rich slowly.  Ms. Bloom, and the other investors mentioned in this Times article, prove beyond the shadow of a doubt that when your goal is to get rich slowly, you will!

Please share your thoughts on what I’ve written here, and please share this page with others.  If you haven’t picked up a copy of my short investment guide, please do so.  My mission in writing this blog is to see all of us enjoy wealth through stock market investing.

Enjoy your weekend!

 

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)