For Christmas I’d like to give you a gift of 10 million dollars. And Freedom.

Not by winning a lottery or a scratch-and-win prize. Not by falling into a huge inheritance.

Nope … Those are magical tricks I don’t buy into.

I want us to create our own magic.

INVESTING!

Wall street bull

 

My real goal in saving and investing has always been to pursue personal freedom.

The ability to choose my own path and not be at the beck and call of someone else who controls my destiny.

If I didn’t like what I was doing or who I was working with, I always wanted the option of kissing it/them goodbye.

I did just this when I quit a lab job on Vancouver Island that was eating me up inside. The financial returns weren’t worth the stress and burn.

I don’t need a zillion dollars to make my life livable. But I do need a reasonable base of savings and yearly returns that give me cash flow to live on. Cash flowing in like a toll bridge.

I like toll bridges.

toll bridge

Toll bridges don’t do anything, they just sit there collecting $$.

I want to own the toll bridge that pays me for just standing still, doing nothing.

I was fortunate – lucky really – to work only 3 days each week for the past 25 years in a job I enjoyed, working around people I enjoyed working with. THAT is freedom.

While I worked in medical laboratories, dipping swabs in delicately scented stool samples and pouring tubes of straw-coloured urine like fine wine, I quietly built a toll bridge.

I love investing.  I’m always searching for a zillion dollar idea in the stock market.

People like to whisper in my ear how I can make a zillion dollars.

I decided long ago to only listen if they’ve lived their dream and made it happen in their own lives. Otherwise it’s just a puff of cancerous smoke trying to kill me.

Today I’m gonna whisper in your ear. You decide if it’s smoke and mirrors or solid ear wax.

Please understand that my whispers won’t make you a zillionaire overnight.

But let them incubate a few years and these delectable eggs may set you free.

I love reading company financial reports, looking for tiny shiny diamonds in a huge slag pile. My pulse quickens when I find an elusive gem.

I was elated in years past when Slater Steel and Western Star Trucks and Facebook, and more recently Apple and Disney and Aflac landed in my lap at fire-sale prices. Black Friday sales (and CRASHES too!) can happen any day in stock markets.

Famous investor Peter Lynch was always looking for the “10-Bagger”… a stock that multiplied in share price 10 times over. Peter Lynch was a great investor.

One Up on Wall Street cover

Honestly, I’ve never owned a 10-Bagger.

Actually I probably have owned a couple but I’ve yet to find one that I didn’t sell too early and miss the HUGE payoff. Just shoot me now.

I get skittish when I have a stock that’s risen two or three times over, even if it still holds potential for further gains.

The real goal for a true investor (not speculator or gambler) is to better the return of the stock market indices – The DOW. The NASDAQ. The S&P 500. The TSX.

If you can’t beat the stock market averages – and MOST mutual funds return LESS than the stock market averages – then sniff sniff … you’re just … average … and you might just as well stop wasting your time and put your money in an ETF (Exchange Traded Fund)  that follows the ups and downs of the whole market.

Nope. Not for me.

Over the past 10 years if you had socked your hard-earned $$ in the North American markets you would have seen yearly gains of 7.8% (DOW), 7.4% (S&P 500), 8.5% (NASDAQ), 4.7% (TSX)… not too bad when you compare these numbers with long-term GIC returns of about 3.5%.

My own 10 year investment return has been 12.2%. Not bad either, although I set my sights on 15% as a long-term goal.

Maybe I’ve set my sights too low in aiming for a 15% annual return on my overall investment portfolio. Perhaps if I looked higher in the sky, I’d make a better return. There’s something to be said for setting expectations HIGH!

This year has been relatively quiet on stock market fronts … both Toronto and New York markets have bobbed and wavered like an iceberg around the 0% change mark, sometimes slipping a bit above the ocean’s surface, sometimes dipping a bit below.

I can happily report that as of this week, I’m sitting on a 2015 investment return of 10.7%. I know it’s not an eye-popping number – Donald Trump won’t be naming one of his buildings in my honour (hallelujah!!) – but I take some satisfaction in outgunning the stock markets as a whole so far.

And my toll bridge is doing its job of sending me cheques every three months filled with $$ I didn’t have to get out of bed to earn.

But let’s end the narcissism right here.  Enough about me and my year.

What are a few names that might spell FREEDOM for you in today’s stock market world?

I’ll tell you this with one caveat.

As soon as I open my mouth publicly about a great investment, the Money Gods generally take vengeance on me by sending bolts of lightning to crush and sizzle my picks.

Of course this won’t stop me because I have a strong secular faith that markets and stocks that drop today – if well chosen – will rise like Phoenix’s from the fires and ashes and bring a financial smile to my lips.

And in the meantime, every one of these “whispers” pays a toll booth dividend to you, collecting and sending dollars your way while you stand still doing nothing. You can just take your time and breathe.

 

Here goes:

  1. Apple – the 2000’s world exists with an “i” in front of everything. Why fight this amazing colossus with ONLY $200 Billion cash on its balance sheet?
  2. Microsoft – don’t like Apple? Microsoft owns everything else in technology. Office 360 and X-Box anyone?
  3. Disney – Just watch the new Star Wars movie and Let It Go, it’ll make all your dreams come true.
  4. Aflac – the silly daffy duck that keeps on giving bigger dividends every year.
  5. Gilead Sciences – a cure for Hepatitis (HARVONI) at a bargain price of $75,000 per patient – KA-CHING!!!
  6. Alimentation Couche-Tard – the owner of almost every corner store and gas station in North America is migrating a path around the world bringing Mac’s and Circle K to the masses.
  7. Deere – you wanna eat? You ain’t gonna do it without a John Deere tractor pulling the harvester.
  8. Johnson & Johnson – I am stuck on band-aids, and AIDS treatments too. And 10,000 other products you absolutely need.
  9. Royal Bank – hate bank user fees? It hurts a lot less when you get them back in a dividend cheque.
  10. Torchmark Corp – just a quiet little health insurance company that spoon feeds all its profit back to investors.

The world needs more bridges of all kinds to solve its problems. Why not consider constructing yourself a toll booth and enjoy sleeping in late tomorrow?

Freedom. Enjoy this Christmas gift to you.

sleep in

 

 

 

 

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