The Great American Dividend Machine by Bill Spetrino

Author:Bill Spetrino
Language: eng
Format: epub
Tags: BUS050020 Business & Economics / Personal Finance / Investing
Publisher: Humanix Books

Looking for Someone You Can Trust

This book isn’t meant to teach you how to be a master investor. What I want to show you is how to select and trust a master advisor. How do you pick a good advisor, and what makes me different from other people?

First of all, look at the advisor’s track record. Bill Parcells, the famous football coach, said that you are what your record is. The legendary investors I’ve been referencing have been doing it for 45 or 50 years. They’re not flukes. Be wary of investment advisors whose job is to bring in clients, not to make the clients’ money. Those people have no track record. You can find an advisor at some of the larger financial institutions like JP Morgan, Wells Fargo, or Merrill Lynch. The problem is that advisors at these companies are supposed to preserve your money, not grow it. They might want to grow it, but they’re not personally invested in how much money they make for you. They get paid a percentage of what they manage. So they don’t care if they make you eight percent, three percent . . . whatever. If they’re making two percent for their management services, and they get a two million dollar account, they’re paid $40,000 to manage your account and not lose it. They’re not going to take any chances. And if they’re not taking chances, what are you paying two percent for? You could do that yourself.

Second, you should ask: Do they have dividend income themselves? How can someone who doesn’t earn dividend income have the necessary information to tell someone else how to retire? People can’t retire because they don’t have enough income to replace their salaries. Your job is to develop your dividend machine. The path to a retirement nest egg leads back to buy and hold, like the lady who bought the one share for $180. All she did was tell her advisor, “Reinvest the dividends, please.” Your advisor must have dividend income for you to work with him or her. Would you hire a gardener who’s never planted before? Most investment advisors, in my view, just aren’t focused on dividend investing.

I know someone whose advisor told him to buy a muni bond yielding two percent rather than investing in Apple. Apple is up more than 80 percent since then. What’s ironic is that the advisor told him: “You own more Apple stocks than any of my other clients!” I told my friend that the advisor wasn’t making money from recommending Apple stock.

The people managing your money at a big firm aren’t geniuses. If they were, they’d have their own hedge fund. If you have five million dollars, you can have a hedge fund. But if you don’t have big money, your investment money gets put in a mutual fund, mingling with a lot of other people’s money. You’re not getting personalized attention. Investing anything less than a million dollars only gets you that. And the people doing the investing for you are making two percent.

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