I BELIEVE ANYONE CAN DO THIS!
Ronald Read, a Vermont gas station attendant and janitor, invested in recognizable names over a 40 year period. He put the stock certificates in his safety deposit box. He saved about $300 a month and earned about 8% per year over 65 years to earn his wealth. He died at 92 and left his fortune to a library and a hospital when he died.
I had a client that was a doctor. In 1976 he opened a profit sharing plan for his business. He saved about $700,000 in his plan over a five year period. After 10 years his account was worth $10 million. His receptionists account was worth $1,000,000. He retired in his early fifties. After living off his account over the next 20 years he still had $20,000,000. He lived on the ocean on Long Boat Key in Florida and had a summer home on the beach in Narragansett R.I. His investment logic was not complicated. He simply was invested most of the time in the strongest performing mutual funds. If a fund declined by 5% he moved to money market until he found a new fund performing better. When markets were cyclically high he invested in more conservative funds.
He was not fearful about the future. He worried more about what he might miss out on than what he might lose.
Most investors today need to earn 8% or better to be financially independent. I believe today, stock picking is more attractive than investing in mutual funds or indexes.
There are numerous ways to target an 8% return:
• Employing a tactically managed tax free or taxable high yield bond fund.
• Buying low with discipline using an approach like Non Random Profits.
• Using ETF’s with an approach like my doctor client.
• Using mutual funds in your 401k or 403b just like my doctor client.
• Using high dividend growing stocks across the global spectrum.
• Using high growth stocks bought near their channel lows.
• Writing options on quality stocks.
These are just a few examples. It is tragic that only 5% of our population is financially independent at age 65. I believe most investors either take too little risk to be successful or take too much risk by buying too high and later selling low in discouragement. The story about the janitor was reported on CNBC.