Posted on 03/18/2022 10:09:23 PM PDT by aquila48
If you’re just tuning in, I’ve spent the last several columns explaining how everyday men and women can generate a seven- or eight-figure net worth.
Even if they’re starting from zero.
I’ve done it – and so have millions of other Americans.
Last year the Federal Reserve announced that U.S. household net worth hit a record $141.7 trillion.
Spectrem Group reported that approximately 1 in 8 American households has a net worth of more than $1 million.
How did they do it? The stories vary, but their methods are remarkably similar.
Most Americans with a net worth of a million dollars or more maximized their income, lived within their means, saved regularly, invested smartly and let their money compound for years – if not decades.
Over the last few columns, I’ve covered how to maximize your income, increase your savings and adopt the prosperity mindset of the world’s best investors.
But where should you put your money to work, in stocks, bonds, cash, gold, commodities, real estate?
You should spread your risk across all these asset classes.
But over the long haul, nothing has rewarded investors more than a diversified portfolio of common stocks.
That’s why The Oxford Club recommends them. The outperformance is not trivial.
Jeremy Siegel – a professor of finance at the Wharton School of the University of Pennsylvania and author of Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies – has done a thorough historical study of the returns of different types of assets over the past couple hundred years.
What he discovered is dramatic: $1 invested in gold in 1802 would have been worth $90.05 at the end of 2021. The same dollar invested in T-bills would have grown to $4,437. A $1 investment in bonds would have been worth $36,390.
And a single dollar invested in common stocks with dividends reinvested – drumroll, please – would have been worth over $45 million.
Bookmark
I can beat THAT number!
Of course, I can hide most of them behind the barn.
I’ve 5 Opel Gt’s (4 1/2 actually) 69-73. Lots of spare parts for them.
3 one ton Chevy vans 77-99
2 Jeep Cherokees one Grand, the other not so.
I have no accurate count of how many riding mowers I have, but only one cuts grass at this moment.
I’m a sucker for a push mower on the curb awaiting a crushing death.
Our running Vehicle is also a Jeep - barely getting started at 26,000 or so.
In the final analysis, money is an entry on an electronic ledger that resides in government regulated banks and hundreds of thousands, probably millions, of business and personal electronic ledgers.
Cash, the paper, is a physical representation of such ledger entry’s created by governments to represent the actual ledger entries
Cash is rapidly becoming an anachronism, a relic, and disused. Money is now transferred between parties as electronic blips from one ledger directly to another. Cash in the form of government bills or checks or oter such conveyance devices is simply not used so much.
People are paid wages by employers with deposits electronically to their personal electronic ledger at a bank. Gasoline is paid for at a self operated pump with some sort of plastic card that allows access to the ledger for a carefully controlled transfer via blips. Only one person is actually involved in such an electronic transaction. Presently a hamburger can be ordered and paid for by transferring the funds via a small hand held computer that accesses the purchasers ledger and wirelessly transfers the blips to the purchasers ledger unaided by an intermediate person
On a larger scale, the markets for stocks operates totally on electronic ledgers. No paper changes hands and some ledgers send and receive blips on a mind numbing microsecond intervals. The $$ amounts of these blip movements from one ledger to another that may be thousands of miles way is so large the amount can’t be comprehended.
I have no accurate count of how many riding mowers I have, but only one cuts grass at this moment.
My grandfather ran a small engine repair shop. He taught me to buy the best and to take care of it. Which I did, until it no longer made sense.
Eventually, repair service in my city got so bad that a simple carb job would cost me $75 with a six week delay. Where a new crappy mower would cost me $125.
So I'd buy new crap, perform no service, and when it died after three years I'd buy another, set the old one on the curb and post on Craigslist that it was free to anyone who wanted it.
There wasn't anything seriously wrong with the old ones that simple maintenance and a carb job wouldn't fix, but I didn't have the time, tools, or space, paying someone else to do it would cost near as much as a new mower, and my grass wouldn't wait for him to work through his waiting list.
I cycled through three or four cheap mowers before I saw a battery powered electric at a price I liked.
In every sense except energy storage, electric motors are vastly superior to internal combustion. But batteries sucked. They still suck, but they suck sufficiently less than they used to to be usable in some circumstances. Mowing a yard every couple of weeks is one of them.
I've found this to be very true.
The battery ones are enticing, but I've WAY too much to mow.
I also use(mis) my zero-turn as an all-round log hauler, pusher, dragger whatever. Anything it's 25 hp can handle.
Make it easy to legally acquire property.
Have a system of laws that protects the rights of property owners.
Have an even handed justice system.
Have those three things and your society quickly create wealth.
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