Investing means finding stocks that go up and then selling them. So, does your financial advisor. The media tells you the current bull market started in March 2009. March 2009 is the month the Dow hit its low point of 6,500, that is true. They forget to mention the old high was just over 14,000 in October 2007 – just before the Great Recession financial crisis wiped out HALF the Dow. The market has gone up from that old high only since about August 2013. And there is no guarantee that the gains of the last 5 years – or more – will not disappear again.
Therefore, many retirees and near retirees are now free-falling. When the market prices of their stocks go down, seniors must sell more shares to pay their bills. Leaving them with fewer shares they can sell next time they must
raise cash for an emergency. No wonder they feel sick to their stomachs when they receive their brokerage, IRA, 401(k) and mutual fund statements.
It is likely many people you know are now wondering whether they will ever take that special cruise, give great presents to their grandchildren or receive the best medical care if they suffer a prolonged illness. Chances are, nobody told them this could happen. They simply followed the mainstream advice to load their 401(k) plans, IRAs and mutual funds up with “growth stocks” to sell many years later at a huge profit. Despite following the conventional financial wisdom, many senior citizens are now asking what happened to that worry-free fun and relaxation
they promised themselves after a long career of hard work. Many people in their fifties and early sixties are wondering when — or even if — they will be able to retire. Many today wonder whether they will be able to leave an estate to their families or a legacy to their favorite charity.
The more you learn about the stock market, the more you understand basing your retirement on continuous stock market price rises is like building a house on the edge of a steep dirt cliff. Eventually, a hard rain will fall. Serious investors who would never day trade, buy and sell penny stocks, splurge on Internet chat room stock tips, or throw money away on Bitcoin . . .
. . . failed to understand that buying stocks and bonds in hopes of later selling at a higher price is an intrinsically risky form of gambling no matter how long in the future that “later” is. A 10-year “retirement trade” is not more virtuous or safer than a 10-minute day trade — it just takes a lot longer.
Clearly, you would have more fun if you took your retirement fund to Vegas.
“Rick Stooker is on the right track. We also intend to pursue a more income-oriented
strategy in the years to come. Capital gains are subject to both the risk of a
decline in economic fundamentals and a deterioration in market psychology.
High-quality dividends and income are subject only to the former, and that
makes a big difference in modeling your portfolio returns in retirement.”
Look, I am
just another guy who must go to work every day to pay his bills. I have spent
years studying investing, hoping to find a way to “get rich quick.”
I tried everything you could name, and then some — options, growth stocks, commodities, gold, silver, index funds. I have bought no-name stocks and seen them triple in price in one day for no reason I could figure out. I have bought “bottom feeder” stocks for under one penny and discovered there is always a smaller infinitesimal fraction of a cent they can sink down to. I have sold covered calls and learned the underlying stock price can drop by half while waiting to sell another call. (Book authors told me not to buy stocks that would go down . . . guess I just refused to
In the summer of 1998 I discovered a way to trade U.S. Treasury bond options with a 90% chance of success. Just to make sure I lost money, the world’s entire financial system almost melted down. Oh well . . . I did not do as badly as Russian stock owners or the wealthy people who entrusted their funds to the Nobel prize winners and super trader at the Long-Term Capital Management hedge fund.
I did fail to get rich, quick, or slow. Yet one day I had a revelation — one of those “things I learned in
kindergarten but didn’t think they applied in adult life” insights.
You cannot have your cake and eat it too!
When you buy stocks for growth, you cannot put actual, spendable cash back into your pocket until you sell the stock. And then you cannot participate in its future growth. Plus, you must share your profit (if any!) with the government, by paying capital gains taxes. Which is why honest investment advisors such as Warren Buffett advise you to never sell. But if you never sell growth stocks, you never put any cash back into your pocket. If investing for capital gains is risky and pointless — obviously, investing for income is the logical alternative.
So, I began learning all I could about investing for income. I discovered many income investments I had never even
heard of — some of them paying out terrific yields. One day after I began my research, I was helping my mother organize her paperwork and she showed me the original notebook where Grandpa wrote down the stocks he bought for her with the life insurance money from my father’s death. As I looked through it, I wanted to slap myself! The secret to successful investing had been under my nose all along . . . In 1955, my Grandpa put together a top-notch income portfolio for my mother! Thanks to him, while growing up my sister Nancy and I had food to eat and clothes to wear. Like this boy, I am riding on my Grandpa’s shoulders — and so can you! All I had to do was follow his lead, update it for the modern financial world, and organize it into a system anyone can easily follow.
Chances are, at some point in your life you have seen your portfolio grow. Maybe you have sold stocks at a profit, and it felt good. People who put money into Dot Com stocks during the 1990s may have made a lot of money — if lucky enough to sell before the crash. Maybe you have gotten profits riding in the so-called FAANG stocks: Facebook, Apple, Amazon, Netflix & Google.
Wall Street wants customers to keep buying and selling so they keep raking in commissions and fees. They know that trading makes clients losers. The more frequently people buy and sell, the more they lose. That has been proven repeatedly by studies of actual brokerage records. Yet brokers (who make a commission when stocks are sold), financial advisors (who make big bucks off their customers), and the talking heads on TV (if people did not care whether the market was up or down they would not bother to watch those financial shows) all encourage their clients to buy and sell investments for growth. (By the way — “value” or contrarian investing is just another way of picking stocks somebody hopes will grow more quickly than the overall market.) Mutual fund managers and hedge fund traders make millions just by claiming they are better stock pickers than the rest of us. The truth is, their track records
— documented by hundreds of academic studies — are worse than throwing darts
at a newspaper.
The market is too efficient — just too unpredictable — to beat. Remember — almost none of these experts on giving
financial advice saw the 2008 market crash in their crystal balls! The few traders who figured out just how
risky the subprime mortgage investments were, did not realize how badly it would shake up markets around the world or Wall Street itself – and they did not share the “Big Short” opportunity with ordinary investors.
Warren Buffett is considered the top picker of stocks, but the record shows he likes cash-rich businesses such as insurance companies (Geico) and companies that pay dividends (Coca-Cola).
Clearly the big shots know “Cash is king.”
“If you are not going to sell a stock, what happens to its price is a matter of indifference.”
–Peter L. Bernstein AGAINST THE GODS: The Story of Risk
I did not know it then, but I started learning these investment secrets when I was only two years old . . .
. . . Ike was President back when my grandfather, an accountant for Ralston-Purina, helped his newly widowed daughter invest the life insurance money she had received from my father’s death in an automobile accident. Knowing the future of his daughter and two grandchildren were at stake, Grandpa used a simple, common-sense (to him) approach. Today, most investors, brokers, financial advisors, and investment writers have now forgotten (or deliberately ignore) it.
See, although my grandfather did collect Social Security, he was born and raised long before it existed. People back
then invested for income, because the government did not send them monthly checks after they retired. When they bought stocks and bonds, they held on to them — so they could collect dividend and interest checks for the rest of
their lives. That is what they depended on to pay bills and eat. They did not buy and sell, buy, and sell, buy, and sell in a crazy attempt to beat the market. Whether cigar-smoking capitalists or threadbare widows, they made the
cardinal rule of investing the protection of capital. That is the background my grandfather had when he invested for my mother. People in the past spent income when they had to, sure. But they knew if they sold their stocks and bonds, they were like a farmer eating his seed corn. Or the fairy tale couple who killed the goose that laid the golden eggs. Previous generations knew that if they ate their “cake,” it was gone. Spend a happy, carefree retirement with your loved ones. Just try out the Income Investing Secrets program. I hope my mother is wrong about that . . . and chances are, you too are more concerned about the immediate future than 20 years from now. You probably want immediate results from your savings — either extra spending money or an increase in your
portfolio through reinvesting that income.
The official Wall Street line is this: companies that do not pay dividends use that cash to grow their businesses, so their stock prices will go up farther and faster than stodgy, boring dull companies that treat their shareholders as partners in the success of their business.
That is a
logical theory — but real life results tell a different story.
Arnott and Arness studied the relationship between dividend payouts and corporate prices for the years 1871 to 2001 and reported on their results in FINANCIAL ANALYSTS JOURNAL. They found corporate profits rose fastest in decades following the highest dividend payouts, and were lowest in the years following the lowest dividend payouts. Besides, most of any company’s stock performance depends on the overall market, not on the company’s individual
business results. A bear market drags all stocks down with it. The best companies do not go down as much as the market, but they go down more than their financial statements justify.
So much for the “keeping cash makes a company grow faster” argument.
“Companies that don’t pay dividends have a sorry history of blowing the money on a string of stupid diversifications.”
–Peter Lynch, Manager of the Fidelity Magellan Fund 1977-1990
The historical record shows dividend-paying companies are the best long-term investments. Growth stocks are only better during manias such as the late 1990s, and then only if you sell out before the bubble bursts. From 2000-2002, the S&P 500 stocks that did not pay dividends fell 33.19%. S&P 500 stocks that paid dividends ROSE 10.4%. That 3-year bear market just SLOWED the dividend paying stocks. And do not forget, those shareholders still received their quarterly dividend checks!
Just because you cannot reinvest dividends if the company does not pay any.
“From 1871 to 2003 97 percent of the total after-inflation accumulation from stocks comes from reinvesting dividends.
Only 3 percent comes from capital gains.”
–Dr. Jeremy Siegel THE FUTURE FOR INVESTORS
The Mergent large cap index of dividend paying stocks outperformed the S&P 500 from 1993 to 2002 by an average of 1.5% per year. That does not sound like a lot, and for one year it is not, but when you compound that over several decades, by the time you retire it adds up to a tremendous difference. From 12/31/74 to August 31, 2004 large,
dividend paying stocks had total returns of 14.43%. Large growth stocks returned only 12.28%. Thanks to Enron, Tyco, Global Crossing, and other corporate scandals, we now know the “earnings” that companies report
can be accounting manipulations. Just numbers that have been gimmicked to look good. But guess what — dividend checks must be backed by cold, hard cash in the company’s bank account.
None of the big name corporate criminals paid any dividends worth writing home about (Tyco did make a one-time token dividend payment of 1 penny per share). If you bought only the best dividend-paying stocks, you would not have lost any money to accounting scandals
During the bear markets of 1901-1921, 1929-1954 and 1966-1981 the ONLY benefit from owning stocks was dividends. During those periods, there was NO overall stock market price appreciation! That’s 61 years out of the entire 20th century. 61% of the time, you received dividends . .. or diddly.
The market has been going up again, but nobody knows when the bear is going to come roaring back. At some time in the future, this bull market too will collapse. Maybe it will be another tech scandal like Facebook . . . or market instability triggered by high frequency traders . . . or partisan political chaos in Washington D.C. – or something we cannot foresee. Obviously, depending on “growth” stocks to grow is a risky game, even in bull markets.
What if somebody wants to retire just as another such prolonged bear market gets started? If they depend on the conventional wisdom of selling off their portfolio piece by piece (the official financial advice is selling 4% of your portfolio a year is “safe”), they will get low prices.
That means they’ll have to sell off more shares than they planned on just to pay their bills. You must wonder, just how
long of a bear market could their portfolio survive? Remember, this century started off with a brutal crash from 2000-2002. The 2008 crisis was an even more ferocious economic period. It will not be the last. We have “officially” recovered from 2008, but the amount of debt Americans owe is even more staggering than 2008. Sure, the wealthy are making bank, but everybody else from ordinary Americans to the Federal Reserve is in hock to the crown of their heads. 82 million American baby boomers have begun to retire. Many experts predicted this was going to depress the financial markets — and it has just begun! And I have not even mentioned the on-going mess in Europe, Japan, and China. Many developed countries owe MORE than the United States. The next American stock crash could easily be triggered by a financial crisis in the European Union, Japan, or China. So, the outlook for the Dow going beyond its
peak anytime in the near or even mid-future looks bleak. The world and the markets keep changing, but people’s basic needs have stayed the same since we lived in caves. Clearly, if you want a secure income you can depend on, you want to invest your money so it will help supply people with those fundamentals: food and shelter. Water and
fire. McDonald’s and Pepsi-Cola. Apartments and houses. Water utilities and electric companies.
People are always going to buy basic products. A recession, even a world financial crash, can certainly slow — but
NOT stop — their sales. Obviously, seven and a half billion people around the world will want to fill their bellies and sleep under a roof at night. That has the safest bet going. Income investments based on basic human needs will continue to send out checks. That is all I need to know and care about. Chewing gum, industrial pipes, financial
services, cigarettes, chocolate, and that all-time Wall Street favorite — hog mash. My grandfather did NOT buy that glamorous growth stock IBM even though, as a high-level executive for an international corporation, he knew how important that company’s computers were becoming to modern businesses.
No, he put my mother’s money in the “Old Reliables.” Not mainframes — pork and beans! AT&T was as high-tech as he went. And back then the company was a regulated utility. Plus, it met the basic human need of talking to each other. Mom does not have most of these stocks anymore, to tell the truth. She and Grandpa gave in to the tobacco scaremongers and sold R.J Reynolds. Since its 1984 split up, AT&T has undergone numerous and confusing changes — yet it and most of its spin-offs still pay dividends!
In 1955, only a few professors of finance were reading Harry Markowitz’s paper on reducing portfolio risk through asset diversification, which eventually won him the Nobel Prize for Economics. My grandfather did not write down a bunch of fancy equations or win any awards, but he understood the importance of not keeping all your eggs in one basket. Companies that meet basic needs will always have some cash. In my system I explain other ways to protect your investments. One common objection to income investing you may have heard is you must pay taxes
on that income at your regular tax rates. Capital gains tax rates are lower, so from an academic point of view it seems better to sell the stock and pay capital gains taxes. My first response is, that assumes there is a capital GAIN. In a
textbook world, a company’s stock price rises as its business expands. But in a real-world bear market, you may not have any gain at all. My second response is my original revelation — if you sell a security, whether at a loss or gain,
you do not have it anymore.
When you cash a dividend or income check, you do incur a tax obligation, but you also still own the security — and so
you keep on receiving regular checks. Notice I am NOT telling you how much those stocks have gone up in price since 1955. That is not what is important. And I would obviously be lying if I told you they did not gone down a lot in
the 2008 crisis. What is important is to follow the money . . . that goes into your pocket. When the stock market can rise, and fall at random, blowing up unexpectedly by over 50% in just 16 months . . . and go nowhere for 11 years —
you absolutely cannot depend on it for a worry-free retirement.
You still have time to build a secure, long-lasting financial foundation that pays you ever-growing checks. Investing
for income is simple, easy and — if you do it the way I show you — a lot less risky. Just think — once you set up your accounts, your portfolio grows the “lazy” way — automatically. And it feels so good to know you can have an ever-growing income from your investments WITHOUT selling them off. Mom and I counting our blessings — Thanksgiving Day 2007. This is the ONLY available investing for income system that covers the full range of income investing,
from stocks and bonds to preferred stocks and real estate investment trusts. AND which tells you straight out — ignore capital gains.
This website contains a lot of great information about income investing. You can learn a lot from it — but it is
like a jigsaw puzzle. Each page of content is one piece, and to get started, you obviously, you need to see the Big Picture. You need a systematic plan. You need a system. That is why I updated Grandpa’s work for the current financial markets, included the findings of modern financial research, and put together the 7 Principles of Income Investing. Using them, I evaluate all your income investing options, then come out with a plan for young
investors, investors nearing retirement, and retired investors.
I have read the other books on income investing. They have some good information, but they focus on “fixed”
income investing (a phrase I hate, because even a “small” 2% rate of inflation will eventually destroy the buying power of your savings, so instead I want you to invest for ever-increasing income). And none of them give you
their value system up front, as I do.
“I Wish I knew this Stuff in My 20s”
“I am a Chartered Accountant in Canada and spent most of my career teaching in a community college.
“Over the years, I have used various “plans,” with varying degrees of success, but had never given much thought to dividends, so I fell prey to the hype about capital gains. So, what was I thinking? Should have been
investing for dividends.”
“I also learned about some new investment vehicles, and got a “heads up” on some investments that I was aware of, but put on the back burner.
“Wish I knew about all this stuff when I was in my 20’s, or at least paid attention to the theories involved in my 40’s.
Dance the night away knowing your investments provide you with a secure, solid financial foundation. Find out how
you can safeguard your retirement. Retirement can be a time of exploring new worlds, of stretching and finding new strengths. I want to invest the “revolutionary,” old-fashioned way that kept the wolf away from the doors of widows and made industrialists even richer.
1. VARIABLE ANNUITIES EXPLAINED: Tax-Shelter an Unlimited Amount of Money from the IRS and Guarantee Yourself a Lifetime Income Without Getting Ripped Off Shopping for variable annuities makes sending a rocket to Mars seem like child’s play. Here I explain how they work, what to look for, and the scams to avoid. Enjoy the serenity and peace of mind you have earned.
2. SWISS ANNUITIES EXPLAINED: Safeguard Your Variable Annuities with the World’s Safest Life Insurance Companies, in What May Be the World’s Safest Form of Money Swiss annuities are one of the best “secret” investments in the world, but anybody can buy them.
Here is what you need to get started.
The Swiss are known as the world’s safest as well as most secret bankers. What is not so well-known is that for over 100 years they have also had the world’s safest life insurance industry. Not one Swiss life insurance company has ever failed. Compare that to AIG in the United States. Plus, the Swiss franc will probably continue appreciate against ALL types of dollars AND the euro AND the yen . . .
Have the income to go on new, exciting and fun trips. Try out Income Investing Secrets now. Plus, under normal conditions Swiss law prohibits the seizure of annuities by creditors . . . Plus, the same strict privacy laws that prohibit Swiss bank employees from disclosing customer information also apply to Swiss life insurance company
employees . . . Plus, ownership of foreign annuities does not have to be reported to the U.S. government (as ownership of foreign bank accounts must be) . . . Plus, earnings on foreign-owned annuities are not subject to the 35% tax the Swiss government imposes on foreign-owned Swiss bank accounts . . .
3. Master Limited Partnerships: High-Yield, Ever-Growing Oil Stocks, Income Investing for a Secure, Worry-Free and
Comfortable Retirement Master Limited Partnerships are a little-known form of investment, and are one of the best income investments available in the United States. MLPs make their money by transporting energy — oil, natural gas,
and refined petroleum products. They operate pipelines throughout the United States and Canada. Best of all, MLPs make money so long as people need the energy, no matter whether the price is up or down. They charge for letting it
go through their pipelines, and storing it. However, this is the only full-length book devoted to them.
If you have any sizable amount of stocks, bonds, or mutual funds, you have paid out lots of money in commissions, management fees and capital gains taxes. You would save most of that money if you only bought . . . and never sold. If you wanted to learn everything in the Income Investing Secrets on your own, you can, to tell the truth. Sift through the tons of material on the Internet. This website does contain a lot of the pieces of the puzzle. Spend hundreds of
dollars for investing books from Amazon. Spend hundreds of hours reading, studying, and fitting the pieces together into a total system. Or you can get the system in complete form, all ready to go. All ready for you to just download, and then put to use. With all the work already done for you. Just follow the steps I outline — I do everything except give you the money to start investing with. But I want everybody who is retired, thinking about retirement or young enough to get REALLY REALLY rich from this information to put it to use now.
my Covered Call Investing”
found your system useful in my own thinking. I have enhanced my covered call
investing by shifting my portfolio of underlying stocks slowly but surely to
the kinds of dividend paying stocks you favor.”
money than you spend to eat dinner out and see a movie, you tap into the same
secrets my grandfather used to secure my mother’s ability to provide for her
two children — updated for the 21st century.
You guarantee yourself an ever-growing stream of regular checks. Plus, you reduce risk by relying on the basic needs
of people. High tech fads come and go – people must keep paying for food and shelter. Stop handing your hard-earned savings over to the IRS. Give them a share of your investment “harvest,” but keep your “seed corn” so
you continue reaping “harvests.” Stop worrying or caring about stock and bond market ups and downs. You receive regular checks. Stop guessing which “geese” will grow into “ten-baggers” so you can sell them
for a higher price. You do not own a crystal ball, and neither do any of the financial analysts or gurus. Buy geese that lay gold eggs and you never want to sell those geese.
My mother’s gathered gold eggs for over fifty years. She raised two demanding children that way, and now we’re out of her hair, has a nice lifestyle. She spends her time reading catalogs, not annual reports. She watches movies on cable TV, not Moneyline. She goes on cruises with friends and flies to visit her grandchildren. You too can join in
the fun. I fully guarantee your satisfaction with Income Investing Secrets. You have 60 days to read it and see for yourself. If you are not convinced it is the most comprehensive and helpful system to invest for income in any and all
market conditions, I demand that you demand your money back! If you are not satisfied and delighted for any reason, you get your money back. No matter what, the 3 free bonuses are yours to keep and profit from. Therefore, you risk
Check out income investing for lazy investors now The word about income investing is already spreading. Many people question the wisdom of relying on capital gains/market price appreciation. More and more people are snatching up dividend-paying stocks, corporate bonds, real estate investment trusts and more income investments. The longer you wait, the higher the price you will have to pay for your streams of income. Flip the bird to the stockbrokers, mutual fund managers, financial advisors, market gurus and “analysts” who want to suck the blood out of your retirement funds. Invest your money well . . . and you can spend your precious time enjoying life with your family instead of watching talking heads on TV. For the price of a few pizzas, you put into your hands the most complete system for learning how to protect you and your family’s retirement and inheritance NOW.
“You set me on the right path”
heard about REITs, MLPs, BDCs, but you really explained their advantages and
disadvantages. Thank you, Rick. You have set me on the right path to generate a
steady income stream.”
If you have money in any actively-managed mutual funds, your investment in Income Investing Secrets system will more than pay for itself when you switch to tax-efficient forms of investment. I want to avoid the baby boomer retirement market crash You probably do not set your alarm clock except when you are going to catch an early morning flight to visit an old college friend, tour Italian art museums or go on an African safari. Your days are full of fun activities: golf or tennis or walks in the park, lunch with friends, movies, dinner with friends, concerts, shows . . . watching your grand or great grandchildren play soccer . . .
Life is good. Of course, everything costs money. Yet you can pull out the cash or your debit card with confidence,
knowing you have more than enough funds, and you will never run out — even if the government’s Social Security trust funds do. You will leave a legacy to your family they will appreciate more and more as the years go by. More
importantly than the money, you will give them what my Grandpa left me (and Mom is still providing) — a terrific example to follow . . .
Your children, grandchildren and great-grandchildren appreciate everything you do for them. So, long as people
around the world still drink water, eat chocolate, and turn on electric lights! The principles of investing for income are the same everywhere. Many of the details in this system will not apply to you. But I am sure that you can get
hold of most or all the securities I mention by name. Get hold of Income Investing Secrets NOW – so you too can grow rich the lazy way Remember — your satisfaction is guaranteed!
P.S. Look, I’m a baby boomer thinking about retirement myself. I want dividends and interest to reinvest now, so that when I’m older I receive a stream of big, ever-growing checks. These techniques fed and clothed me when I was a child. Updated for the 21st century, they will feed and clothe me and my loved ones when I am a senior citizen!
Please do not wait until everybody else is already selling off their growth stocks. When everybody wants to sell, there is nobody left to buy — and then it will be too late to get your money back. Every day your retirement savings is tied up in “growth” stocks, you are at risk of their value going down — and you are failing to receive the regular dividend and interest checks you could be receiving, so you have a great time when you say goodbye to the Rat Race.
Or maybe you plan to bet your retirement lifestyle on Social Security . . . Rick, I do not want to stake my future on Social Security — I am ready to learn about income investing now! Income Investing Site Full Disclaimer and Website
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Gold Egg Investing LLC. All rights reserved.
Many thanks to my cousin Steve Jacoby for taking the great picture of Mom and
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