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Chapter 1:
DOUBLE-DIGIT ANNUAL RETURNS: Making High Returns On Your
Money Year After Year
If you could
earn a minimum of 10% return on your money every year … regardless of
the direction of the markets … with less risk than what you are doing
now, would you do it, … and more importantly, would you be satisfied?
If so, then you’re going to love this book! That’s
exactly what this book delivers … you will discover how to
consistently get at least 10% return on your money year after year
primarily in the form of monthly income. But that’s not all … I will
also show you how to boost that return by as much as 50% … how to buy
almost every investment for 10% below the current market price … how
to get paid extra cash while you wait for the right price to buy … how
to use margin and pay zero interest … and a whole lot more extremely
valuable tips, techniques, and concepts. If this kind of certain,
reliable income excites you, then you’re in the right place.
And don’t worry if you’re a complete novice …
never invested a dime in your whole life … chapters four through nine
are dedicated to the complete novice right down to the definition of a
stock, how to pick them, how to select and open a brokerage account, and
when to buy and sell. In chapters four through nine, I’ll cover
everything you need to know about stocks, bonds, mutual funds,
closed-end funds, options, and how to place the various types of orders.
If you are an experienced investor, you might want to skip these
chapters, but you should at least skim through them, because I’ve
included a bunch of innovative concepts that will help you boost your
returns.
Even if you aren’t happy unless you are trying to
get 50-100% growth on your money every year … even if that means you
end up losing money most years … you may find the concepts in this
book provide a fantastic base for you to fund your aggressive growth
itch. You could invest 90% of your cash for high monthly income and use
the income for risky growth investments such as mutual funds, options,
commodities, or even betting on the horses. Then if your growth
investments don’t pan out, at least you still have a reliable,
steadily increasing income.
Are you tired of trying to make your money grow?
Are you tired of getting excited when the balance goes up
and then depressed when it falls back below where you started?
Is the balance of your investments roughly the same as
what you put in it … or worse?
Would you like to discover how you can earn 10-20% return
on your money every year regardless of the direction of the markets?
Would you like to buy your investments below market
price?
Are you interested in discovering a way to build an
income that exceeds your salary?
This book will show you all this and more. Better
still, you can do all this with less risk than buying mutual funds
outright and certainly less risk than buying and selling the latest
growth stocks. In fact, if you take advantage of my new online service,
I’ll even show you exactly what I’m doing, when I’m doing it, how
to get discounts on specific investments, specific opportunities to
supercharge your monthly returns, and a whole lot more. See chapter 28
for all the details.
This
Book Was Written for All Investors From the
Complete
Novice to the Full-Time Professional
If you are new to investing … if you are just
starting your career or even still in school … this is a perfect book
for you. In the primer section of this book (Chapter four through nine),
you will find a detailed overview of stocks, bonds, mutual funds, and
other investment vehicles. If you are a veteran investor and are open to
some new ways of thinking, this book is for you as well. This book
presents a different approach to building wealth than most of the
investment strategies touted over the last 20 to 30 years.
Have you ever heard these three pearls of conventional
investing wisdom? …
“Buy mutual funds and hold
them until you retire.”
“Buy stocks when prices are
low and sell them when their price goes up.”
“Buy bonds when interest
rates are high, and sell them when rates fall.”
Chances are you have if have spent more than about ten
minutes reading anything about investing. In the next couple of
paragraphs, I’ll briefly discuss each of these guidelines.
The
Incredible Secret About Mutual Funds
The mutual fund plan is fine if you just want a way to
put your money away for the next 10 years or more and if you are willing
to pay some hefty fees every year to get average results. In fact, the
mutual fund plan can be a great plan if you just want to park your money
and ignore it … but you have to promise not to agonize through the
inevitable market drops … especially if you use an index fund. Yes, I
know over most periods in history, 80% of managed mutual funds don’t
beat the index funds (i.e., “the market”). I don’t intend to show
you how to beat the market; I
plan to show you how to more or less ignore the market. By the way, if you like mutual funds, even index
funds, one of my earlier publications, GROWTH
& INCOME: How to Build a Mutual Fund Money Machine will show you
how double or even triple the income from any mutual fund(s) you choose.
We’ll explore the four types of mutual funds later,
but here’s the one thing you need to know now … If you don’t pick
an index fund, which typically has very low fees (0.2% for example),
once you get a lot of money in the fund, that annual management fee gets
big! For example, a 1.5% management fee on a $100,000 account costs you
$1,500 per year (which is $15,000 over ten years assuming the balance
doesn’t change); if your account grows to $1 Million, your annual
management fee costs you $15,000 per year … Ouch!
In fact, if you invested $10,000 in a mutual fund with
a 1.5% annual fee, contributed $6,000 per year ($500 per month), and
received 10% growth every year (not likely), you would have $1Million in
32 years (assuming you compounded annually). That’s not bad, but
assuming your annual fees were charged at the beginning of each year,
you would have paid a total of $160,792 in management fees! Without
those fees, you would have reached a million-dollar balance by the 29th
year (i.e., three years earlier).
By the way, at 15% per year, you would reach the
million-dollar mark by your 24th year (or 22nd
year without the management fees). In this case, your total fees paid by
the 24th year would be $120,706. Fees matter!
Maybe you don’t care about a measly $120,000 to
$160,000 in fees over thirty years, but consider you’re still paying
over $15,000 every year once you reach a million dollars. If you stick
it out another nine years and achieve a ten million dollar balance, you
will pay over one million dollars in fees just during those nine years,
and your management fees will now be more than $146,000 every
year! This is why most millionaires usually hire personal managers
or invest in exchange-traded funds or specific stocks and do not use
mutual funds (except possibly low-fee index funds).
Mutual
Funds Are Expensive, But That’s Okay Since
They’re
not “Buy Low, Sell High” Either?
And of course, the buy
low, sell high plan for individual stocks is tougher than it sounds
… and the commissions aren’t cheap here either. Then there’s the
time investment with all the research, monitoring of your stocks, and
hoping they’ll grow in value while the markets keep bouncing all over
the place. If mutual fund fees are worth it, it’s because of the time
factor of picking and monitoring your own stocks. Incidentally, if you
are using Dollar Cost Averaging with
mutual funds, you should realize you are not
“buying low and selling high” here either. Think about it; with
dollar cost averaging, you invest a fixed dollar amount each month or
quarter which means you buy more when shares are low-priced and buy less
when shares are higher-priced. Either way, you are still buying;
you never sell. So, you can’t be selling high. Of course, over the
long haul, dollar cost averaging will raise your average return on
investment, but that’s not “buy low, sell high”. Once again, the
way around this dilemma is presented in GROWTH & INCOME.
Are
Interest Rates High or Low?
Finally, you can buy and sell bonds. Simply buy them when rates have
topped out, and sell them when rates have bottomed out. If you follow
this simple rule, you can make a killing with bonds … especially
long-term bonds; plus, you get to collect interest while you own the
bonds. The only problem is predicting when and how far the Government is
going to raise or lower interest rates. So, just as with stocks, you
have to select, monitor, and time your investments … doable, but not
trivial or foolproof. If you think you can solve this conundrum with
bond mutual funds, be sure you read chapter five closely.
A
Viable Alternative è
Cash In Your Pocket!
In this book, we’re going to discuss an alternative
approach. I will show you how you can get at least a 10% return on your
money every year regardless of what the market does to individual share
prices. By 10% per year, I don’t mean growth of share prices, I mean
cash in your pocket! You will likely also get some capital growth along
the way, and later in this book, I’ll show you how to buy your stocks
for 10% or more below current market prices (which will automatically
provide capital growth), generate some extra cash flow, and supercharge
your annual returns. I’ll even show you how you can buy and sell
stocks and funds with zero commissions.
The
Power of Income
This book reveals a strategy for building wealth
through the power of income.
Think about this for a minute …
Why do you go to work
everyday?
What magical event is going
to let you retire some day?
What provides you a feeling
of financial security?
What let’s you buy all the
things you want and need?
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