| Did you hear about the struggling actor who got hooked on investing while reading someone else's mail, landed a job on Wall Street, and eventually became a successful investor, stock strategist, and author? No? Well, you likely receive his research and analysis several times a week. That's right. That struggling actor was our very own Chief Income Strategist Marc Lichtenfeld. (Don't worry - opening the mail was part of his job.) Marc recently joined YouTube personality Ari Gutman for a wide-ranging interview on his backstory, his investing philosophy, his mission, and much more. It'd be impossible to transcribe the entire interview in one email, but here are some of the highlights... AG: What exactly is your story, and how'd you get to where you are today? ML: "I moved to California, I was still a struggling actor, and I needed money. I mean, I wasn't making very much. And I decided that the stock market seemed like a good place to try to make some. My first trade, I invested $600 in Harley-Davidson, made a $300 profit in about two months, and thought I was going to be - I'd say the next Warren Buffett, but I didn't know who Warren Buffett was at that point. ... I just became obsessed with the stock market." AG: Of all the areas of the market you could've specialized in, you landed on dividend stocks. Why? ML: "Basically, because it works. ... Over the long term, the overwhelming majority of the [market's] total return can be pointed back at dividends. ... If your sole focus is growth, you've got to watch those pretty carefully, because when stocks like those do reverse when there's a bear market or the individual stocks turn around, it can get nasty really, really quickly. So you have to really be on top of it, whereas with dividend stocks, if the company's paying and hopefully raising that dividend every year, you can really kind of sit back and just live your life and not be focused on it every day or even every week." AG: I want to ask you about your 10-11-12 System. Can you break that down? ML: "What it comes down to is it's a long-term strategy. I want to see the yield on any stock that I pick reach 11% within 10 years, and if I'm reinvesting the dividend, I want the average annual total return to be 12% over 10 years. If you have an 11% yield, you are beating inflation. We've had one period in the last 50 years where inflation got above that. Even two years ago, when inflation really spiked, the highest was 9%. So if you're at 11%, you're doing pretty well. And then 12% average annual total return is pretty darn good as well. You're tripling your money every 10 years." AG: I get a lot of emails from people who are five to 10 years out from retirement saying they've really missed the boat on investing early. What would you say to them? ML: "Invest as hard as you can for as long as you can. If you're planning on retiring in five years, that means you have five years to put away some more money. Maybe when it gets to five years, maybe you can extend it to another year or get a part-time job or find a hobby that pays just so you're not pulling more money out if you don't have to. Every year that you can let that money grow - and compound, if you're reinvesting the dividends - will just add to what you have in the future. ... There's no real shortcuts, but all you can do is what you can do today, which is invest as much as you can in quality companies that are raising their dividends every year and let it go for as long as you possibly can." AG: What was your mission in writing your book, Get Rich with Dividends? ML: "It was to try to show people that they can have the financial future they want without it being scary, without having to invest in crazy strategies, [and] without having to try to find that next superstar stock. It can be as easy as they want it to be. ... For the person that really just wants to make sure that their financial future is taken care of and not have that be a dominant part of their life, it's really, really easy to do." I thoroughly enjoyed Marc and Ari's chat, and I think you will too. Simply click the button below to watch it in its entirety. Good investing, Nicole | 
No comments:
Post a Comment