Read It and Reap.

In my spare time, one of the things I love to do is go to estate sales.

An estate sale takes place when someone, usually a home owner, passes away and their heirs sell all of their earthly possessions.

I enjoy going to them because you can really find some great items, at very reduced prices. I don’t always find something I’m interested in buying, but I enjoy the hunt.

I’ve gone to quite a few estate sales in the last 3 months. The majority of the homes have been in upper middle class and affluent neighborhoods.

It wasn’t until this weekend that something interesting dawned on me…

If I had to put a number on it, I would say that at least 69% of the owners of these homes were avid – some voracious – readers.

And the fascinating thing that dawned on me yesterday was the number of books on investing on the shelves of these wealthy individuals’ homes.

When there was a library in a home, each one, without exception, has had anywhere from five to ten books on investing in the stock market. The professions of these readers included pharmacist, doctor, educator and small business owner. None of these professions were related to Wall Street, but each individual knew that investing in the stock market was a way to build wealth.

Those of us of a certain age remember the phrase, “reading is fundamental”. I think that phrase should be followed by “not reading is detrimental“! And with all due respect, I’m not talking about just reading romance novels, comic books or any other fictional book. I’m talking about reading with the purpose of learning how to build wealth.

It is no coincidence that these people who passed on a significant legacy to their heirs were well read, especially in the area of personal finance.

I know it may seem boring. But so is your health, after all – until you get sick.

There’s a correlation between people that read about personal finance and wealth creation. The more you read, the likelier you are to make good choices with your money.

If you need ideas, check out these books that have influenced me.

 

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.)

 

 

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Could this stock be the investment of your lifetime?…

Good morning!

When you make an investment, no matter how big or small, there is always that chance that the investment could be one of the great investments of your lifetime.

Whether it is likely or not is irrelevant. Because none of us knows for sure.

Today we have access to so much commentary, through social media, legacy media, newsletters, and financial blogs like Wealthy Joe. Everyone has an opinion on the market and on stocks in general. Some may be right. Most will be wrong.

What’s important to remember is that your next – or first! – investment could very well be a life changer for the better.

Here’s a great example of what I’m talking about…

One of the greatest investors in the world is a firm called Baillie Gifford. Baillie Gifford primarily invests in founder-led, disruptive companies that come to market as well as those that have been around for years.

In the early 2000s, right after the dot-com bomb, Baillie Gifford invested in eBay (NASDAQ: EBAY) and Amazon (NASDAQ: AMZN).

At the time of their investment, they believed that eBay was the better investment.

Over the next 20 years, of course, Amazon would turn out to be the far superior investment: up over 17,000% since 2002, while eBay is up a little over 400%.

In 2002, I was a market maker working on a trading desk. I don’t recall one person that felt Amazon would be the better investment than eBay over time. Not one.

As investors, we become owners. I know you may not look at it that way, but we are owners when we buy shares in a company. Our goal is to find the best investment opportunities we can.

We try to find first movers in an industry that is evolving and take a partial ownership stake.

When we buy, our timeframe is long: 10, 20, 30 years or even longer.

If you can do this, truly great companies will reward you handsomely over time. The bad ones won’t.

Here is a list of great companies that went on to become the greatest investment of a lifetime:

1. Home Depot (NYSE: HD): Disrupted hardware stores, with everything under one roof and low prices.

2. Walmart (NYSE: WMT): Disrupted brick and mortar retail by offering the lowest prices.

3. Southwest Airlines (NYSE: LUV): Disrupted air travel by offering the lowest prices and great customer service.

4. Costco (NASDAQ: COST): Created a new business model, in which you pay for the privilege of shopping in their store.

5. Monster Beverage (NASDAQ: MNST): Became the leader in the energy drink space.

These companies I listed are not companies that anybody thought would turn out to be investments of a lifetime!

Just find a business you like – and get invested today. For help getting started, check out my beginner’s guide, The Stock Market is For Everyone.

Have a great day!

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.)