Word
Gems
What is a
man but the sum of his thoughts?
Wealth:
Lowell Miller:
- The Single Best Investment:
- Achieve Lasting Wealth With
- Low-Risk Steady-Growth Stocks
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- Editor's note: I highly recommend this book. It reflects, more than
nearly any other, what really works regarding investing -- it is virtually an instruction
book on what I personally do (with minor variations). I offer just a few quotes from the
book.
The single best investment is a select group of stocks of highly steady, moderate
growth companies that offer consistent returns, minimal risk, [and increasing dividend
growth, allowing you to] create your own private 'compounding machine' from which you can
realistically project multiplying your net worth again and again for five, ten, and twenty
years into the future...
Dividend growth is the critical piece in the puzzle for creating a portfolio that
will serve you over the years.
Pay attention.
This is a simple idea, but it is also the single most important idea for
investors. The reason it is so important is that dividend growth drives the
compounding principle for individual stocks in a way that is certain and inevitable.
It is an authoritative force that compels higher returns regardless of the other
factors affecting the stock market...
- What makes rising [dividend] income ... so attractive ... You
not only receive greater income as the years go by, you also get a rising stock price --
because the instrument producing the income (the stock) is worth more as the income it
produces increases...
Ibbotson Associates, Stocks, Bonds, Bills, and Inflation 1997 Yearbook:
"One dollar invested in large company stocks at year-end 1925, with dividends
reinvested, grew to $1,828.33 by year-end 1996: this represents a compound annual growth
rate of 11%. Capital appreciation alone caused $1.00 to grow to $58.07 over the
72-year period, a compound annual growth rate of 6.2% ... The average annual dividend
yield was 4.6%." Editor's note: It is vitally important
to understand that 97% of the long-term total growth from stocks comes
from dividend reinvestment in more shares!!
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