What Works: Buy stocks and start a business

by James & Miel on June 24, 2009 · 0 comments

The thing about personal finance bloggers is that we get caught up in the day to day trivialities of running a blog and sometimes forget about good content. In my view the purpose of blogging should partly be about communicating the best way to build wealth. While we DINKS are certainly not experts when it comes to making money, there are two things we have done which have put cash in our pockets.

1) We’ve bought and held high quality stocks. For example, we bought shares in Starbucks (SBUX) and Exxon Mobil (XOM). Holding onto both of our positions in these companies brought us gains in excess of 20%. In the case of XOM, we’ve seen a 40% appreciation in the value of our shares. We hit it big with Hansen’s Natural Corp (HANS), and made pre-tax profits in excess of 50%. Of course, we’ve seen plenty of looses, but the buy-and-hold strategy has worked for us.

2) We started a small business. My wife and I have an efficiency condo unit that we rent out. Real estate has been a love hate experience with us. We tried to expand into a multi-family building two years ago, but sold the property. On the other hand, our condo unit has added thousands of dollars to our networth and allowed us to significantly build our wealth. The final point here is that the rental unit is basically a small business, we have one customer to whom we provide housing and utilities in return for rental payments. It works. The business puts money into our pockets.

To conclude, if you are really serious about becoming financially secure, you’ll take some time to find out what works for creating wealth. For us this has been two things: 1) investing in good stocks using a buy-and-hold strategy and 2) starting a small business.

Best,

James

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