My Plan to Make a Fortune over the Next Five Years
Stock-Markets / Investing 2009 Apr 27, 2009 - 01:36 PM GMTBy: DailyWealth
There's never been a better moment for making money than we have right now in 2009 in America.
That's because the U.S. government is borrowing the rest of the world's money and dishing it out around America. Meanwhile, everything is on bargain-basement sale... even the casinos along the Las Vegas strip are trading as penny shares. It's amazing...
In my last DailyWealth column, I told you how Carl Icahn's using the financial crisis to make a fortune in the Las Vegas casino business. Here's how I'm going to take advantage of this amazing situation...
First, I'll save as much money as I can.
This means cutting all unnecessary costs. For example, we cut a second telephone line we didn't use.
Secondly, I'm going to think like an entrepreneur and seize opportunities when they come my way...
You won't catch fish if your hook isn't in the water. There's the old joke about the guy who shows up in heaven and asks God why he couldn't have at least let him win the lottery. God asks him why he couldn't have at least bought a ticket.
I know there are opportunities to make money and I'm on the lookout wherever I go. I always ask business people if they know of any good business ideas… and I browse Craigslist for cheap machinery or equipment that could be turned into a business. The other day I enquired about a tree trimming truck and rig for sale. At its price, I calculated I could make my money back in less than four years if I dedicated myself to trimming trees…
Felix Dennis has a $750 million fortune, according to the latest rich list published by the Times of London. He built his fortune in the publishing business and then wrote a book about how he did it. I've read thousands of self-help investing and personal finance books and this is without doubt my favorite. He titled his book How to Get Rich. It's both incredibly entertaining and candid. I suggest you read it right away.
Finally, I'm going to use the stock market to accumulate wealth.
My love is the stock market... so that's how I'm playing it. I want investments that spin off large amounts of cash every month... like a casino would. I don't want to worry about money ever again, so I want this cash flow to be incredibly reliable and safe from inflation and a falling dollar.
I'll do this by accumulating a diversified portfolio of the sort of stocks you'll find in my newsletter, The 12% Letter. Take ExxonMobil as an example. Exxon is the world's most profitable company. It has a free-cash-flow yield of 12%. Altria is another example. It controls the world's cigarette market and has a free-cash-flow yield of 13%. Microsoft dominates the world's computer operating system market. It has a free-cash-flow yield of 10%.
These companies pay larger dividends each year... They produce the things we love... They dominate their industries with the strongest brand names in the world... They raise their prices... And they compound my readers' money at over 10% a year.
These businesses are "on sale" right now. They will all benefit from the government's largesse.
My family's target is to build a million-dollar income portfolio by the end of 2014... by being entrepreneurial, compounding our money, and living frugally. We're hoping to live the Florida beach-bum lifestyle and never have to "work" again...
Good investing,
Tom Dyson
The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.
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