Tired & Boring Investing

It’s the dream:

1. Find a pen­ny stock that your “spe­cial insight” leads you to believe that it’s under­val­ued.
2. Buy tons.
3. Watch it go to $10.
4. Sell (pay 40–50% of your gains in tax­es) & retire.

You might think this is invest­ing, I think it’s gam­bling. Though, if you have a “spe­cial insight” you would be cor­rect. Personally, I find it hard to believe that many peo­ple can beat the pro­fes­sion­als. Professionals have spe­cial insight, and access to bet­ter infor­ma­tion than reg­u­lar peo­ple ((I believe Apple remains a good buy, part­ly because I believe most pro­fes­sion­als mis­un­der­stand exact­ly what they’re doing and what it means. That said, pro­fes­sion­als “run the mar­ket” and Apple may remain under­val­ued in-spite of my “spe­cial insight.”)).

Interesting Wall Street Journal arti­cle about P&> today that says it’s “aris­to­crat­ic ways are get­ting tired.” Talks about how it’s over­all return is all due to div­i­dends and share buy-backs (as opposed to intrin­sic com­pa­ny val­ue growth).

I would­n’t want my whole port­fo­lio to be bor­ing like P&>, but bor­ing on the way up often means bor­ing on the way down.

Maximize Boring

Even more impor­tant for your Elephants, it’s not about how big your Elephant gets but how big his pay­check gets. Steadily increas­ing div­i­dends are awe­some. They beat infla­tion, they’re depend­able, and using the Elephant’s Paycheck Blueprint you max­i­mize the val­ue of bor­ing to a very dis­tinct advan­tage.

Boring div­i­dend aris­to­crats are one of the pil­lars that the Elephant’s Paycheck Blueprint is built upon. Without bor­ing, this strat­e­gy might not be as effec­tive. Reinvesting the reg­u­lar & increas­ing div­i­dends lets you invest for “cash flow” rather than “bal­ance sheet growth”. Cash flow lets you direct­ly plan retire­ment or leav­ing your 9–5 to pur­sue your dream. Cash flow gives you flex­i­bil­i­ty to pay your bills with­out touch­ing your prin­ci­ple (and while con­tin­u­ing to get rais­es every year). And, an Elephant’s Paycheck is an addi­tion­al fam­i­ly income.

Who does­n’t want anoth­er pay­check?

Earn Money While You’re Asleep

I could­n’t resist this post’s image. You can’t exer­cise while you’re sleep­ing, but you cer­tain­ly can earn mon­ey while you are.