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The Best Advice I Can Possibly Give About InvestingBy
Friday, July 31, 2015
Earlier this month, I was hanging out with one of the greatest guitar players on the planet...
He has been on the cover of most major guitar magazines at some point in the last year... but he doesn't know a lot about investing. So as we were hanging out in his hotel room, just the two of us trading guitars back and forth, he eventually asked me for my investing advice.
He told me he had some savings, and he was looking for "a hot tip" to make "a quick buck." (Those were his words.) He said if I couldn't help him, maybe I could point him in the direction of someone who could.
I winced to myself... and collected my thoughts...
Here I was, hanging out with one of my heroes in music... and I had two options:
As I think back on it, the advice I gave him is the best advice I can possibly give to anyone starting out. Here's what I said:
Don't do it. The quicker you believe me on these two things, the quicker you will stop losing money and start making it.
I didn't stop there. I told this hero of mine:
I told him how I have been buying property, and how a rental property ticks all the boxes today.
Hopefully, he took my advice to heart and didn't do something stupid. I don't often talk about these four things because they're "basics" to me. But you never want to lose sight of the fundamentals.
Make sure these things are ingrained in your head... Teach them to your spouse... and ultimately to your kids.
These four things will do more for building your net worth than just about any stock recommendation I can give. Commit to them!
Good investing,
Steve
Further Reading:
As Steve said, right now is a fantastic moment to buy real estate. It's where he's putting his money right now. And he says you should, too. Get all the details here.
Market NotesTHE LATEST "BORING" STOCK MARKET WINNER Today's chart proves that a business doesn't have to be exciting to generate huge gains in the market...
If you're a longtime reader, you know we're fans of simple businesses. We don't think you need to invest in complicated, "exciting" stocks to make money. Companies that "sell the basics" – like beer, packaged foods, consumer goods, power tools, auto parts, and cleaning supplies – often make for some of the best investments in the market. And today's stock is no different...
Reynolds American (RAI) is the second-largest tobacco company in the U.S. It sells roughly one-third of the cigarettes in the country, and its brands include Newport and Camel. It's not an exciting business... And it likely won't produce the "next big thing."
But as you can see from the following chart, Reynolds is in a steady uptrend. While the S&P 500 is up around 6% over the last year, Reynolds shares are up nearly 50%... and they just hit a new all-time high. As we often say, selling the basics isn't exciting... but it works.
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