Today we have high gas prices, high food prices, half-empty shelves, and the inability to get certain products that were readily available before the current Administration took over in January 2021. On top of that, before Biden was sworn in as President, we were also energy independent, and the World was a much saner place. Yet, the “Big Guy” says everything is hunky-dory and he has created more jobs than any former President... there are “. . . Lies, Damn Lies, and [Biden].” Because of Biden, the Democratic Mayors and Governors, and the Teachers’ Unions, we have also found out how the radical left are indoctrinating our children, pitting blacks against whites, along with the climate change rubbish, and other unspeakable things not fit for print in a publication like this.
This reminds me of 1973 when my wife and I got married, which was a great thing, but unfortunately, Joe Biden was sworn in as a U.S. Senator. The year 1973 was the launch of the Biden Family Business, which is more precisely the selling of political influence in the United States and Worldwide. Biden bluntly stated in a 1974 interview that “[He was] like the token black or the token woman” and “was remarkably candid in that interview about his willingness to ‘prostitute’ himself” to raise money and get funded. Nothing has changed over the past 49 plus years. We know for certain the Biden Family Business “bagged $31 million from individuals with direct ties to the highest levels of Chinese intelligence—while Joe Biden personally benefited, while softening his position on China.”
In 1973, we also had high inflation resulting in high food prices and steep mortgage rates; our first home mortgage rate was 9 1⁄4%. We suffered from excessive fuel prices, with long lines and shortages at the gas pumps due to the Arab Oil Embargo; and Paul Simon came out with his song, Kodachrome:
“When I look back on all the crap I learned in high school, it’s a wonder I can think at all. And although my lack of education hasn’t hurt me none, I can read the writing on the wall.”
“Kodachrome, they give us those nice bright colors; they give us the greens of summers; makes you think all the world’s a sunny day. . .”
“I got a Nikon camera. I love to take a photograph, so mama don’t take my Kodachrome away.”
It’s because of “all the crap” the leftist Democrats started teaching “in high school” beginning in the 1960s that has resulted in a World turned upside down; yet the Biden Administration—like a Nikon camera with Kodachrome film—wants to make us “think all the world’s a sunny day.”
And because of government indoctrination—unlike Paul Simon, “it’s a wonder I can think at all”—too many of our children can’t “think at all.” Contrary to Paul Simon, who could “read the writing on the wall,” many of our children today are unable to read, never mind that critical thinking is out of the question!?!
It's likely more than half the voting population have NOT even read the U.S. Constitution and Bill of Rights; and have no idea that America is a Republic and NOT a democracy. They are led to believe that a democracy represents freedom, NOT realizing that in a democracy, the majority can vote to take away your freedom, your property, and even your life, if you dare disagree with the prevailing mob.
The Biden Administration and leftist Democrats are living in a dream world—with their “Nikon camera” and “Kodachrome” film—believing that they can force ALL Americans to capitulate to their socialist schemes, while destroying the American Dream and making the entire World unsafe for far too many people.
As a result of these challenging times, along with China working hard to replace the U.S. Dollar with the Chinese Yuan as the World’s Reserve Currency, Gold is being heavily touted as the investment of choice, even potentially, the currency of the future. Unfortunately, the gold sellers and their generously paid celebrity promoters are not telling you the whole story.
Gold will NOT become a currency. For instance, a one-ounce American Gold Eagle coin, which is beautiful, is worth about $2,176 today. Taking this to a Publix grocery store to purchase $300 worth of groceries creates multiple problems starting with: How does Publix give you the correct amount of change? A new currency may be issued, backed by gold, BUT gold will never become a currency because it is too cumbersome, complicated, and inefficient.
Also, to take advantage or use your Gold Eagle, which is worth, say, $2,176, you have a taxable transaction which must be reported to the IRS; if you barter or exchange your coin for other goods or services and do not report it, you are committing tax fraud subject to unconscionable penalties, including prison.
Furthermore, buying gold coins or gold bullion bars requires secure storage, e.g., storage facilities or safes. Additionally, the price of gold over the past 100 years has NOT been stable, i.e., it fluctuates significantly. For example, if you bought a one-ounce American Gold Eagle in February 1980, you would have paid $2,542; by June of 1982 the value fell to $980; by April of 1993 it further fell to $717; by June of 2001, it continued its decline to $458 (this is the price range that I and many of my clients paid); and today, over 43-years later, you would still be down over 14% with NO income over that 43-year period, and maybe storage costs to boot!
The price of gold today is around $2,000 per ounce. During the 55-year period from 1917 through 1972, the price of gold fell to $400 and below per ounce from its highs; and, during the 30-year period from 1973 to 2003, gold fell to $600 an ounce and below, from its highs. For the 10-year period from 2009 through 2019, gold settled below $1,600 per ounce after rising much higher. The question becomes, will gold prices fall to $1,600 or $600 or $400 from today’s highs? If you are going to speculate and buy gold at today’s price of over $2,000 per ounce, feel free to estimate your own future losses!
And DON’T get me started on commercial real estate limited partnerships with holdings or projects in Chicago, LA, Portland, or any major city in the U.S. right now. Oh, that’s right, Walmart and Walgreens are closing their stores in Portland, along with many stores in the Chicago area, and in other large cities run by democrats... way too risky!
The ONLY reasonably sure thing to do in these unsettling times is to buy an increasing cash flow or income stream no matter what is happening in the World. You can do this by investing in great businesses, with dividend reinvestment programs (DRIPs), that have paid and raised dividends, each, and every year, through depressions, recessions, wars, and stock market declines.
For example, Johnson & Johnson (JNJ) has paid and raised its dividend for over 58 years; The Coca-Cola Company (KO) has also paid and raised its dividend for over 58 years; Proctor & Gamble (PG) over 64 years; McDonald’s (MCD) for over 45 years; 3M Company (MMM) for over 62 years; and International Business Machines (IBM) for over 25 years.
As of this writing, the aforementioned stocks are included in the list of 139 Dividend Champions; companies that have paid and raised their dividends each, and every year for at least 25 years.
Albert Einstein was purportedly asked to name the greatest invention in human history; he simply replied, “compound interest.” According to Einstein, “compound interest is the eighth wonder of the world. He who understands it, earns it... he who doesn’t... pays it.” The only proven, passive way to take advantage of Einstein’s Law of Compound Interest is to invest in DRIPs — great businesses that have a history of paying and raising dividends each, and every year, through recessions, depressions, war, and stock market crashes.
Here is how the miracle of compound interest works: If you put $10,000 in a DRIP yielding 5% and the company grows its dividend 10% each year, so that in year number two, you’re earning 5.5%, in year three, you earn 6.05% and so on, you’ll be sitting on well over $5 million at the end of 30 years. And this does not consider any growth in share price!
In our January 10th blog, Microsoft Corp (MSFT) share price increased 3.6 times its original cost, from when we first recommended it just six short years ago. This is a case in point of the potential increase in share price over 5-to-30 year periods, which further adds to the miracle of compound interest!
Finance Professors Rubin and Spaht concluded, “For those investors who adopt ten and fifteen year horizons, the dividend investment strategy [DRIPs] will lead to financial independence for life. Regardless of the direction of the market, a constant and growing dividend is a never- ending income stream.”
In our March 12, 2023 Newsletter, Issue 40-2023, we recommended 24 DRIPs that were great buys with dividend yields of 3% and more. At the market close on Friday, April 21, 2023, twenty-one (21) of those DRIPs are still great buys. Go to our Newsletter, and consider buying any of the DRIPs that have a dividend yield of 3% or more at the time of purchase.
Our World of uncertainty can still lead to prosperity through the DRIP strategy. We had similar problems in 1973 but we survived and prospered. WE WILL AGAIN!
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.
DRIP... DRIP... DRIP... All the way to financial freedom! Control your OWN future . . . Start investing for cash flow today! Before you know it, financial independence will be at your doorstep.
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.