The Century Club - Chris Mayer

https://www.woodlockhousefamilycapital.com/post/the-century-club?mc_cid=d07adb9fc4&mc_eid=f8fb6e6a50

Companies have lifespans. And they seem to be shortening.

In my book 100 Baggers, I included a couple of tables to show this. Here they are:

Average lifespan by sector:

Now, this is not an exact science and different people will get different estimates. But I think the story here is directionally accurate.

Juxtapose this phenomenon against the median time it took for companies in the study to reach 100-bagger status: 26 years. (The mean was also about 26 years).

So, we see another aspect of the 100-bagger challenge: You need to have a company survive long enough to compound returns into multi-bagger status. What kinds of companies survive? In this post, we’ll take a stab at an answer.

Inspiration comes from a book I read recently: Lessons from Century Club Companies by Vicki TenHaken. (Thanks for the recommendation Ian Cassel! @iancassel). The book focuses on companies that have been around for at least a century.

TenHaken became interested in these companies after hearing a presentation by Makoto Kanda, an economist who studied long-lived Japanese companies. Japan is home to some of the oldest continuously operating firms in the world, with seven founded prior to the year 1000. These are the bristlecone pines of the corporate world.

Fascinated, she turned to see how US companies fared. Corporate lifespans seem to be somewhere around 12 to 15 years. Not many have joined the century club. In the US, there are over 1,000 companies that have survived more than 100 years, a population of less than one-half of one percent of all companies operating today.

So, how did these companies beat the odds?

Interest rates 101: How they influence the market? - financialflagship

https://www.tradingview.com/chart/DJI/BlLg2BvD-Interest-rates-101-How-they-influence-the-market/?&utm_source=Weekly&utm_medium=email&utm_campaign=TradingView+Weekly+99+%28EN%29

As individuals, we face decisions every day that implicate saving money for future use or borrowing money for consumption. If we want to make an investment, one important task for us is the analysis of transactions with present and future cash flows. When we place value on any asset, we are trying to determine the worth of a stream of future cash flows.

Money has time value which means that individuals prefer a given sum of money the earlier it is received.

Consider the following exchange: You pay $4,000 today and in return receive $3,500 today. Would you accept this arrangement? Not likely. But what if you received the $3,500 today and paid the $4,000 one year from now? Can these sums be considered comparable? Possibly, because the payment of $4,000 a year from now would probably be worth less to you than a payment of $4,000 today. It would be fair, therefore, to discount the $4,000 collected in one year; that means to cut its value based on the time that passes before the money is paid.

How People Lose All Of Their Money - Wolf Report

https://seekingalpha.com/article/4415658-how-to-avoid-losing-all-your-money

Summary

• One of the most common misconceptions is that once you have money or certain capital, it's difficult to lose it. This is deeply flawed - it's entirely possible.
• Going from million/millions to zero is certainly possible, and there are just as many ways to do so as to go from zero to a million.
• I spend a lot of time researching and looking at both sides of the coin - and in this article, I'm talking about how to avoid losing all your money.

Photo by fizkes/iStock via Getty Images

Peter Bernstein: The Importance of Staying Power

The behavioral side of investing gets a lot of attention while the personal finance side often gets less than it deserves. That’s because how defensive you are with your finances helps determine how aggressive you can be with your portfolio. Put simply, it’s easier to roll with the market’s punches when everything outside your portfolio is in financially sound shape.

Peter Bernstein dwells on the impact of being wrong on investments because the consequences can go beyond losses. The nature of investing guarantees everyone will be wrong sometimes. That means unexpected gains in some cases (being wrong isn’t all bad) and losses in others.

How quickly you can recover from losses will have a big impact on your long-term wealth. There’s an obvious psychological hurdle to recovering from losses but the state of your finances impacts your ability to recover too. Bernstein calls it “staying power.”

In planning portfolio strategies, I have always been obsessed — perhaps too much so in some instances — with a rather negative but overwhelmingly important question: What are the consequences if I am wrong? I should stress that this question need by no means lead to an excessively conservative investment philosophy, for it has led me on a number of occasions to take much bigger risks for a client than a more conventional approach would have suggested as appropriate. But I do believe that no investment decision can be rationally arrived at unless they are a logical part of a strategy based upon the answer to this question.

This question really relates to the whole problem of risk, which is an inescapable component of the investment process. We simply do not know what the future holds. This means that we are perforce going to be wrong a certain amount of the time — but we also never know which decisions it is that will be the incorrect one (we are often right, in fact, for reasons that we never anticipated: is this actually being right or being wrong?). Hence, we must move ahead always on the assumption that the next decision may be the wrong one and with the realization that we must face the consequences if it is.

The consequences of being wrong essentially involve an examination of the opportunities to recoup any losses that may be incurred. And these opportunities will be determined by two different sets of conditions.

The first and most important condition is staying power. An investor who has a substantial income or a significant amount of cash reserves that can sustain him regardless of what happens to his cash reserves can let time work in his favor in recouping losses; the greatest disasters are really limited only to those investors who are forced to liquidate at moments dictated by external events — a loan to be repaid, a job lost, a tax bill not reserved for — rather than at moments dictated by investment considerations only…

The second condition for recouping losses is the nature of the investor’s decision-making ability. Given a reasonable period of time, because markets do fluctuate, it takes an extraordinary series of poor judgments to do a really bad job of investing. You may fail to make a killing or even to run with the fastest crowd, but it is really difficult to lose money at investing if you have the staying power to carry you over the bleak periods.

I make this rather bald statement on the basis of an important fact of arithmetic: you can lose no more than 100% of the money you invest in any one security, but you can make an infinite amount on it. This apparently obvious and superficial statement tells us something that is overwhelming significant for investors: a few good guesses can far outweigh many poor ones…

Thus, the consequences of the inevitable wrong decisions can be kept to a minimum if the investor has the staying power to remain in the game until the next throw of the dice and to avoid involuntary liquidation at the wrong moment. But the consequences can also one minimized if the investor has the time and opportunity to make a few lucky decisions that can readily offset the less fortunate ones.

The greater the staying power, the greater the risks the investors can take to try to find that magic killing.

Every market downturn has its share of casualties due to the combination of investing losses and selling. The voluntary response of panic selling gets warned about incessantly. And rightly so, because it creates the problem of having to buy back into the market. Which often leads to missing out on gains when the market recovers. But the possibility still exists that the mistake of selling can be corrected sooner rather than later.

Forced selling is equally important, if not more so because it can strike at any time if your finances are in poor shape. When you’re draining your portfolio to cover basic needs, it becomes impossible to recover from losses.

A sound base — suitable emergency savings, insurance, debt, and spending habits — provides the best defense against that possibility. In turn, you can be more aggressive in your portfolio.

And, who knows, maybe knowing you’ve got the financial security to withstand drawdowns, may offer the psychological trigger to avoid voluntary panic selling, as well.

Source: Economist on Wall Street

Personal Finance Advice That Changed My Life - Vitaliy Katsenelson

https://contrarianedge.com/personal-finance-advice-that-changed-my-life/

Today I am going to write about a topic I have never written about before: personal finance. I am writing about this not so much for you, faithful reader, as for my kids. My four- and twelve-year-old girls are probably too young for this discussion, but my eighteen-year-old son, Jonah, is right on the cusp of needing to learn about it.

When I got married in 2000, one of the best gifts given to my bride Rachel and me was lunch with my friend Mark Bauer. Mark and I became friends when we studied at the University of Colorado – he was always my dependable study partner. He is ten years older than me, which at the time meant he had double my maturity (I was twenty-eight).

A few months before our wedding Mark, asked if he could have lunch with Rachel and me. At lunch, Mark explained that many marriages come to ruin over money issues.

Mark told us,

"A tool that has been very helpful for me is a family budget. On the surface it sounds easy – you project your “revenue” (for your family that would be your and Rachel’s salaries) and then subtract your expenses, and that gives you your net income. If you have money left over then you have savings, and then you can afford to spend money on whatever your hearts desire."

At that point, I was a bit disappointed in Mark’s wisdom. I was a few months away from completing the CFA designation, and that was on top of my master's degree in finance. The simplicity of his advice was frankly a little insulting to me.

Mark read my unimpressed facial expressions but continued:

"The problem with a normal budget is that though it captures well ongoing daily expenses like a mortgage, the cable bill, groceries, etc., it ignores future expenses. Let’s take your car for example. It’s paid for, which is great. But in five years this car will need to be replaced and “suddenly” you’ll discover that you have a one-time $20,000 expense, which should not be sudden and is actually anything but onetime unless you are planning to drive this car for the rest of your life. But the car is just the beginning – you’ll take vacations, buy furniture, your kids will go to college, and then there’s retirement."

Now this discussion was starting to get more interesting.

Dollar Street

 Dollar Street (https://www.gapminder.org/dollar-street)

Gần đây mình biết một trang khá hay là Dollar Street. Để minh họa chân thật cuộc sống hằng ngày của các gia đình với các mức thu nhập khác nhau trên khắp thế giới, Dollar Street đã tới thăm 264 gia đình ở 50 quốc gia, thu thập 30,000 bức ảnh (cho tới hiện nay). Các bức ảnh phản ánh các nhu cầu chung mà mọi người đều có, từ chỗ ở, bữa ăn, giấc ngủ đến bàn tay, hàm răng, giày dép hàng ngày, đồ chơi trẻ con, v.v.

Con người có những nhu cầu giống nhau, nhưng chỉ có thể chi trả cho những giải pháp khác nhau tùy hoàn cảnh. Dollar Street sắp xếp các gia đình theo mức tiêu dùng bình quân đầu người, từ trái qua phải. Số nhà chính là mức tiêu dùng trung bình của một người lớn trong gia đình mỗi tháng. Người nghèo sống bên trái và người giàu sống bên phải con đường.

Đôi khi, cuộc sống của các gia đình có cùng mức thu nhập rất giống nhau dù họ đến từ các quốc gia khác nhau, sống trong những nền văn hóa khác nhau. Trong khi đó, trong cùng một nước, mức thu nhập khác nhau cũng dẫn đến những cuộc sống rất khác nhau. Dollar Street cũng ghi lại câu chuyện về mỗi gia đình và ước mơ của họ.

Mình chưa được đi nhiều, chưa hiểu biết nhiều, nhưng vẫn luôn tò mò về cuộc sống và số phận của mọi người ở khắp nơi trên thế giới. Một uớc mơ nho nhỏ của mình là được đi rong chơi khắp thế gian, có thể dừng lại ở mỗi nơi đủ lâu để hiểu thêm một chút về ngôn ngữ hoặc văn hóa bản địa (hoặc bất cứ điều gì) 😃 Mình vẫn đang cố gắng, nhưng đó có vẻ sẽ là một hành trình dài 😃 Chúc bà con một tối cuối tuần vui vẻ!

Huỳnh (01/31/2021)

Investing, Like Gardening, Requires Patience - CharReg

https://seekingalpha.com/instablog/21491521-charreg/5297877-investing-like-gardening-requires-patience

It’s interesting to me that when Chowder’s blogs go off-topic, it’s often about gardening. Perhaps it’s because similar skills and approaches are needed to optimize the likelihood of success. Both investing and gardening require planning, sowing, nurturing, maintaining, and finally, harvesting.

Planning: With any endeavor, the best chance for success requires a plan. The investor decides on an overall approach such as dividend income or total capital gains, sector allocation, and stock characteristics necessary for selection. The gardener similarly chooses methodologies such as organic practices and gardening procedures such as soil amendments and irrigation.

Sowing: Once an overall plan is in place, investors pick and invest in stocks much like gardeners pick and plant seeds or starts.

Favourite Quotes

• "If it doesn't make you healthier, better looking, smarter, or richer, don't do it."
• “The purpose of life is to experience things for which you will later experience nostalgia.” – FedSpeak
• 
  
• "It's gonna get worse before it gets better"
• 
  
• If you never try, you will never know.
• "I would much rather fail gloriously than not venture, not try" - Anthony Bourdain
• We don't know how to do it does not necessarily mean it's difficult.
• "Somewhere, something incredible is waiting to be known" ― Sharon Begley
• 
  
• It is not the strong one that wins, the one that wins is strong- Franz Beckenbauer
• 
  
• 
  
• “Money makes money. And the money that money makes, makes money” ― Benjamin Franklin
• “If you buy things you do not need, soon you will have to sell things you need.” ― Warren Buffett
• “We spend money that we do not have, on things we do not need, to impress people who do not care.” ― Will Smith
• 
  
• “Don’t try to fix people. Just set boundaries.” – Shibetoshi Nakamoto (pseudonymous)
• “It’s good to have people in your life who you don’t want to disappoint.” – Warren Buffett
• “The thing that is least perceived about wealth is that all pleasure in money ends at the point where economy becomes unnecessary. The man who can buy anything he covets, without any consultation with his banker, values nothing that he buys.” – William Dawson
• "Sometimes magic is just someone spending more time on something than anyone else might reasonably expect."  ― R.J. Teller

3 Habits That Are Costing You Hundreds of Thousands - Nick True

 Retrieved September 16th, 2020, from

https://mappedoutmoney.com/3-habits-that-are-costing-you-hundreds-of-thousands/

We all have habits that we do daily or even weekly that cost us money. Most of the time they are really little, like a cup of coffee or eating out for lunch. But just how much do these innocent purchases cost us over time?

Let’s take a look into 3 everyday habits that sometimes can turn into much bigger monsters than we could ever imagine.

Patience

Retrieved September 16th, 2020, from

https://www.fool.com/investing/general/2013/01/10/mohnish-pabrai-what-ive-learned-from-warren-and-ch.aspx

Mohnish Pabrai: Well, I think what happens is that certainly with both of them, there is a tremendous amount in the public domain. But I think when I met Warren for lunch with my family, first of all, within about five minutes, he puts you at ease, and you think you're having lunch with your grandfather, which is great. But I think he's very cognizant of the fact that it's an important event for the people who are attending, and he wants to deliver value at that lunch. So anytime you would ask him a question, he would answer it in a manner where there was tremendous learning. So I'll give you an example. I asked Warren a question about Rick Guerin. When Charlie and Warren had started out, there were three of them. It was Charlie, Warren, and then the third guy, Rick Guerin, and they used to make investments together. They ran separate funds, but they used to work together. In fact, even when they did the See's deal, Rick, Charlie, and Warren had interviewed Chuck Huggins to be the CEO together. The three of them were firing questions to him together to figure out whether he was the guy.

Then Rick Guerin pretty much disappeared off the map. I've met Rick recently, but he disappeared off the map, so I asked Warren, are you in touch with Rick, and what happened to Rick? And Warren said, yes, he's very much in touch with him. And he said, Charlie and I always knew that you would become incredibly wealthy. And he said, we were not in a hurry to get wealthy; we knew it would happen. He said, Rick was just as smart as us, but he was in a hurry. And so actually what happened -- some of this is public -- was that in the '73, '74 downturn, Rick was levered with margin loans. And the stock market went down almost 70% in those two years, and so he got margin calls out the yin-yang, and he sold his Berkshire stock to Warren. Warren actually said I bought Rick's Berkshire stock at under $40 apiece, and so Rick was forced to sell shares at ... $40 apiece because he was levered.

And then Warren went a step further. He said that if you're even a slightly above-average investor who spends less than they earn, over a lifetime you cannot help but get rich if you are patient. And so the lesson.

Ethical Investing

https://seekingalpha.com/instablog/12055951-seriouscat/5380107-ethical-investing

Summary

I am a talking cat on the internet. Not a financial adviser.

I have no idea what I am doing or talking about. If I did, I would have better uses for my time.

Is Wealth Worth It?

https://www.quora.com/Is-getting-rich-worth-it-9

Anonymous

I made $15m in my mid-20s after I sold a tech startup. I talked to a lot of people about this question, and thought a lot about how to stay the same person I was before and after making money.

Here's my answer: being rich is better than not being rich, but it's not nearly as good as you imagine it is.

The answer why is a bit more complicated.

Anne Scheiber – Secret Buy and Hold Dividend Millionaire - September 25, 2018 by MG.

http://moneygrower.co.uk/anne-scheiber-secret-buy-hold-dividend-millionaire/

Today’s secret millionaire story comes from the vault. It starts all the way back in 1893, the year our secret buy and hold millionaire Anne Scheiber. Like most other secret stock market millionaires, Scheiber did not come from a family of means. In fact, her early childhood was worse than most.

Anne grew up in poverty. Her father died when she was very young. As a result, she was forced to began to work in her teen years. Through sheer determination and graft, she saved some money, put herself through law school and began a career’ at Internal Revenue Service’ – the tax department of USA.

The Curious Case of Grace Groner - C.J. MacDonald, CFA Senior Vice President, Westwood Wealth Management

https://westwoodgroup.com/insight/the-curious-case-of-grace-groner/

Geology is the study of pressure and time. That’s all it takes, really, pressure and time. ‘Red’ Redding, The Shawshank Redemption

I don’t know much about Geology, but I do know that the growth of long-term wealth is the result of time, compounding and patience.

Just look at the curious case of Grace Groner, who died in 2010 at the age of 100. She was orphaned at a young age and was raised by kind neighbors. She later lived in a tiny one-bedroom cottage in Lake Forest, Illinois. She shopped at rummage sales, loved to walk everywhere so never needed a car and worked most of her life as a secretary. She never married and had no children yet had many friends who loved her for the happy person that she was. So it was surprising to her alma mater, Lake Forest College, to learn that upon her death she left a gift of $7.2 million to the institution to start a scholarship program for students with big dreams but little money.

Grace did not inherit her wealth, nor did she scrimp and save for decades while denying herself the comforts that she really needed. In 1935, at age 25 and in the depths of the Great Depression, she secured a job as a secretary at Abbott Pharmaceuticals and worked there for the next 43 years. In her first year at Abbott, she bought three, yes three, shares of Abbott stock for a total investment of $180. She held onto the stock for the next 75 years and reinvested all dividend payments. Her Abbott stock split many times over the next 75 years, and together with her dividend reinvestment in shares, she died with over 100,000 shares of Abbott stock. No one knew that the unassuming elderly woman had amassed a fortune, until after her passing. The head of the school endowment “nearly fell off his chair” when told of Grace’s generous gift to the school and future students.

The story of Grace Groner can teach us many lessons about life and wealth management:

Herbert A. Wertheim: Bettering the World - Trudy E. Bell (2014)

Herbert A. Wertheim, O.D., D.Sc., Florida Beta ’62, was a physically abused truant who couldn’t read. He went on to found the world’s largest manufacturer of optical hemicals and measuring instruments and became a philanthropist.

 I kept running away because I didn’t want to get beaten by my father , ” Herbert Wertheim stated flatly. After his Jewish parents escaped from Hitler’s Germany in 1936, they fled to New York City and then Philadelphia, where Herbie was born in 1939. After moving to South Florida, the family was so poor that the boy had to share a bed with his two younger brothers above the bakery his father opened. By high school, Herbie was adept in art and in wood and metal shop and was “pretty good” with numbers, but he still could not read well: words seemed to jump around the page or appear backwards. “I didn’t realize I was dyslexic,” Wertheim recalled. “Those days [early 1950s], everyone just thought I was dumb or wasn’t trying hard enough. I cut school because I could not be successful and was made fun of” and ran away to avoid his father’s strap or broomstick.

Hyperbole Much? - David Crosetti

https://seekingalpha.com/instablog/874941-david-crosetti/5273153-hyperbole-much

Summary

It's fun for some people to make outrageous statements.

Everyone's doing it, so it must be fun or why would they do it?

Or perhaps they just don't know any better as we become dumber as a nation, relative to critical thinking.

Introduction:

These days, I read a lot more Seeking Alpha articles than ever before.  At the risk of sounding like an old fuddy-duddy, one of the things that I notice more and more is how many authors will make a statement that causes me to stop, scratch my head, and think, "Seriously?"

The Most Precious Dollars - Bogumil Baranowski

https://seekingalpha.com/article/4242363-precious-dollars

Summary

• The money we CANNOT afford to lose.
• From a paycheck to your pocket.
• From your pocket to the piggy bank.
• Start early, start small.
• When taxation works for us.

What does counting pennies have to do with keeping and growing a family fortune?

My fiancée Megan and I recently spent an entire evening watching an old movie while counting coins. We’d been letting them collect in an oversized fishbowl. Megan had run to the bank earlier that day to get paper tubes to sort the denominations. I know there are easier ways to do it, but we wanted to have some fun with it. We were both eager to know how much we had amassed. Among hundreds of coins, we found one big surprise that made it all worth it! More on that in a little bit.

The money we CANNOT afford to lose

That experience made me think of the process of saving and building capital. It also reminded me how precious that saved or inherited capital really is, and how difficult – maybe even impossible -- it might be to replace. Any inheritance represents the savings of past generations. Each dollar of inheritance or savings is a dollar that went through battlefield after battlefield, and each dollar required to replace it will have to take an equally grueling path.

With that humbling observation in mind, we at Sicart make each and every investment decision for the sake of the life savings or inheritance entrusted to us. We always say: “This is the money our clients cannot afford to lose” and we treat it with the utmost respect and care. This idea is unfortunately shared by fewer and fewer money managers these days. Among them, though, is the thoughtful Swiss-based investor Anthony Deden, who says this about family wealth: “Respect the fact that is really irreplaceable. It represents a lifetime’s worth of savings.”

From a paycheck to your pocket

Let’s explore for a minute that grueling path taken by each dollar of those savings before ending up safe in an individual’s bank account. That dollar probably starts as $5 or maybe even $10 on a paycheck. It’s slashed by an employer’s payroll tax contribution, and then by the employee’s payroll contribution, only to be taxed at the federal, state, and local levels. If you are a fortunate high earner in a high-tax zip code, the total taxes subtracted from your paycheck could amount to 15% (total payroll) plus 37% (federal) plus 12-13% (state and local). That’s as much as 65% (or almost two-thirds!) stripped away before you see your dollars. Each ten-dollar bill ($10) turns into three single dollar bills and 2 quarters ($3.50) at today’s marginal rate in the U.S. (It could be even less in some higher-tax countries around the globe.) If you now subtract the cost of living and a few modest pleasures, you could end up keeping as little as 20% of your pre-tax pay. (By the way, earning less to fall under a lower tax bracket doesn’t really promote our savings goal here.)

From your pocket to the piggy bank

For this hypothetical $2 out of each $10 earned, the metaphorical journey to the bank isn’t even over. The biggest obstacle is our undying desire to spend! Behind every dollar that’s been successfully saved are endless feats of self-denial or personal sacrifice. For a child, this might have meant no ice cream. In the adult world, sticking to a savings goal may mean keeping an old TV or an iPhone longer, driving an older car, or foregoing a family trip. These may be the wise choices but they’re hard to stick within a world where (as savings guru Dave Ramsey puts it) “We buy things we don't need with money we don't have to impress people we don't like.”

Start early, start small

Speaking of ice cream and childhood, the first money I saved was through a school savings plan. This was in the late 1980s Cold War Poland. We children were encouraged to put money away and monitor the progress of our savings in a little green book. (The plan was actually started in the 1920s, and continues in some form today.) On the back of the green book was the motto “Learn to save. Even little amounts can grow to big amounts.” Even communist Poland promoted the habit of saving money!

Listen to your Grandma

As meticulous as my little entries to the green book were, I learned my frugality less from government initiatives than from my cost-conscious Grandma. She had grown up during the hardships of WW2 and lean post-war years. Following her example, I hardly ever pay full price for anything, from a pair of shoes to a scuba-diving trip. (And believe me, she still asks and keeps track!)

Old ideas come back in style

Frugality is in fashion again, among young and old alike. For some it’s a conscious choice – they want to start a nest egg and worry less about the future. For others, already burdened with student debt, frugality is necessary. The FIRE movement is catching on: “Financial Independence, Retire Early.” Minimalism is shaping a new generation of consumers, while their parents downsize and learn the art of tidying up.

Why we can’t afford to lose it

Every dollar of savings, whether inherited or squirreled away through personal sacrifices, is the money we just can’t afford to lose. Why? Because it is so hard to earn it, save it, and grow it all over again! Charlie Munger, Warren Buffett’s business partner, has been the source of much common-sense financial wisdom. In Damn Right!: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger, author Janet Lowe writes:

"Munger has said that accumulating the first $100,000 from a standing start, with no seed money, is the most difficult part of building wealth. Making the first million was the next big hurdle. To do that a person must consistently underspend his income. Getting wealthy, he explains, is like rolling a snowball. It helps to start on top of a long hill—start early and try to roll that snowball for a very long time. It helps to live a long life.”

And it helps to remember the immense effort it took to climb there, and how painful it would be to do it all over again. How do we stay rich then? Here’s some more folk wisdom: “Rich people stay rich by living like they are broke. Broke people stay broke by living like they’re rich.”

When taxation works for us

Once you have savings or inheritance, it pays to invest it not just because money makes more money. In addition, the tax rates on long-term capital gains and dividends are substantially lower than taxes on earned income, in most countries around the world. In the US, for example, taxes on long-term investments are roughly half of the rates we pay on earned income. Thus, our invested capital compounds faster. That’s yet another incentive to save.

***

To go back to that fishbowl full of coins – Megan and I counted up a grand total of $255 in nickels, dimes, and quarters, quite a heavy load to take to the bank. Among hundreds of coins, we found a real treasure in the form of a 1940s quarter! It looked more tarnished than the later quarters and made a higher-pitched sound when dropped than the contemporary copper ones. It reminded me of the big heavy silver coins from 1930s Poland that my grandparents showed me when I was little – because U.S. quarters were made of 90% silver before the mid-1960s. So, the metal alone makes this quarter worth $3 today, 12 times what the denomination would imply!

Now, the big decision for us remains: what should we do with our casually accumulated $255? Obviously, the fishbowl is neither the only nor the main way we save, but the growth of capital felt very real and tangible that day. As Benjamin Franklin wrote, “a penny saved is two pence clear.” So let the money double, and let your nickels, dimes, and quarters turn into hundred-dollar bills, where Franklin is waiting for you with a smile. Turn those Benjamins into shares of companies that will grow and prosper over a lifetime.

If no inheritance is coming your way – start saving, and if you have savings or inheritance already treat them with the utmost respect and care – it’s the most precious dollars you could ever have.

They are truly irreplaceable.

Happy Investing!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article is not intended to be a client‐specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon. This report is for general informational purposes only and is not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally.