Found this story interesting about Warren Buffett...although the article is refering to stock the concept is still the same.....I made a small investment. With diligence and patience my small investment will take me further than I could ever imagine. Warren Buffett, perhaps the greatest investor of all time, has a simple solution that could help an individual turn $40 into $10 million. A few years ago, Berkshire Hathaway Chairman and CEO Warren Buffett revealed some shocking information about one of his favorite companies: Coca-Cola. Specifically, how after dividends, stock splits, and patient reinvestment, someone who bought just $40 worth of the companys stock when it went public in 1919 would now have more than $5 million. Source: Coca-Cola. Yet in April 2012, when the board of directors proposed a stock split of the beloved soft-drink manufacturer, that figure was updated and the company noted that original $40 would now be worth $9.8 million. A little back-of-the-envelope math of the total return of Coke since May 2012 would mean that $9.8 million is now worth about $10.8 million. The power of patience Sure, you’d have to hold that stock position for just under a century, but I think we can agree that the return is worth it. Especially when you consider that today… the $5 million Buffett mentioned equates to $10.8 million. Imagine that: an eight-figure sum from just 40 bucks! I’d be lying if I said that $40 in 1919 wasn’t drastically different from $40 today. So let’s adjust for inflation and call it $540 in todays money. That means for the price of a new iPad, a diligent investor could find his way into nearly $11 million. Pretty good, wouldn’t you say? Warren Buffett thinks so. He would make that kind of investment 10 times out of 10. And he’s confident that you can do the same, as long as you have the right mindset and a little patience. How to invest for the long term There’s one small speed bump on the road to investment riches, however: there are literally thousands of things that could go wrong with a company at any given moment. Meaning you could wake up one day and find yourself looking at 50% loss instead of a 50,000% gain. So how do we find the Coca-Cola in a sea of Zyngas? Well, the best companies…the ones that turn a couple hundred bucks into millions…have what it takes to win over the long run. Meaning, investors should be looking for rock-solid business models backed by exceptional leadership. The rest is easy… just buy and hold – even when times get tough. As Buffett says, if youre right about the business, youll make a lot of money. So you can forget about poring over stock charts and panicking at every dip. If you’re right about the business, like Coca-Cola, you’ll come out on top. And one day, you may well find that today’s $40 turned into millions
Posted on: Tue, 18 Nov 2014 03:28:48 +0000
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