In early 2017, Tony Robbins published Unshakable, Your Financial Freedom Playbook, Creating Peace of Mind in a World of Volatility. Robbins interviewed many of the Titans of Wall Street, e.g., Warren Buffet, John Bogle (founder of Vanguard Mutual Funds), and Peter Mallouk, co- author, “Wealth Advisor,” and Tony Robbin’s partner. Robbins made a great argument for investing in the stock market, but first, he explains, you must buy his book and call his partner for financial advice!
John Bogle, the founder of Vanguard Mutual Funds, wrote the forward:
“Index fund investors receive the gross market return minus fees as low as 0.05%. . . while active investors as a group will receive the same gross return minus 2% or more.”
“Over an investment lifetime, this annual difference [in fees] really adds up. Most young people just starting their careers will be investing for 60 years or more. Compounded over that time frame, the high costs of investing can confiscate an astounding 70% of your lifetime returns!”
Bogle continued, “But we don’t have to put up 100% of the capital and take 100% of the risk only to receive 30% of the reward (often far less). By buying low-cost, broad-market index funds (and holding them “forever”), you can guarantee that you will receive your fair share of whatever returns the financial markets provide over the long term.”
Bogle was selling the reader on Vanguard Mutual Funds, specifically Index Funds. Instead of costing you 20-to-30 years of retirement income, Bogle’s approach might only cost you 5 years of retirement income; and, just as shady, require you to sell a portion of the Index Funds — possibly in a down market resulting in a real capital loss — to fund your retirement.
As Tony Robbin’s rightly concluded,
“The problem is most funds do a terrific job of charging high fees but a terrible job of picking successful investments. One study showed that 96% of mutual funds failed to beat the market over a 15-year period. The result? You overpay for underperformance. It’s like paying for a Ferrari and then driving home from the dealership in a beaten-up tractor splattered with mud.”
“Even worse, those fees add up massively over time. If you overpay by 1% a year, it will cost 10 years’ worth of retirement income.”
Robbin’s solution. Buy his book and call his partner. Instead of charging 2%-to-3% and costing you 20-to-30 years of retirement income, they will only charge you 1% and cost you 10 years’ worth of retirement income... maybe just a little more depending upon your specific circumstances... they will let you know...
Not one of the 14-plus Titans of Wall Street, nor Tony Robbins and his co-author, mentioned Dividend Champions or Dividend Aristocrats that have paid and raised dividends for 25 years and longer through wars, depressions, recessions, and stock market crashes. Why? Because they can’t make any money from DRIPs!
Buy a DRIP a week and you won’t have to wait 60 years to retire and lose 10-to-30 years or more in retirement income. Financial Freedom is obtainable in 10-to-15 years without having to liquidate your DRIPs to pay for your retirement or lifestyle expenses. The complete strategy is explained in The Best Kept Secret To Financial Freedom, available from Amazon.com. The choice is yours. Let’s make these interesting times financially rewarding. Buy DRIPs NOW!
On January 10, 2023, we recommended Medtronic PLC (MDT) at a price/cost of $77.72, with a dividend yield of 3.43%. Even though the price/cost has gone up, it is still a strong buy at $84.80, with a yield of 3.17%.
AbbVie Inc. (ABBV) was our next selection in early February; the current price/cost is now $151.31 yielding 3.96%. ABBV was created in January 2013 as a spin-off from Abbot Laboratories (ABT), which had paid dividends for over 45-years. ABBV has continued to pay and raise its dividend since spin-off for the past 11 years. During the past five years, ABBV has generated an average annual increase in its dividend of 17.31%. Although technically a Contender, ABBV has “garnered honorary status” as a Dividend King by several commentators.
Our current DRIP purchase for this week is Walgreens Boots Alliance (WBA), at a price/cost of $36.76, yielding 5.29%. This American-British-Swiss Company has been around for 170 years paying and raising its annual dividend each, and every year, for the past 48 years. It is rapidly closing in on Dividend King status, a 50 plus year dividend per share growth streak! For 2022, Fortune 500 rated WBA the 18th largest U.S. corporation by revenue. Boots is the United Kingdom’s leading health and beauty retailer; you can’t go anywhere in the UK without seeing a Boots store on most every corner, like McDonald’s (MCD) in the United States and many places in Europe.
Remember, you are buying an increasing income stream. Any drop in share price during your reinvestment period (10-to-15 years) is to YOUR benefit, i.e., you end up buying more shares, with your reinvested dividends, at less cost generating a faster growing income stream.
Dum Spiro Spero—While I breathe, I hope.
Slainte mhath,
Robert G. Beard Jr., C.P.A., C.G.M.A., J.D., LL.M.