The Roth Conversion Ladder is one of the best strategies to withdraw money from a 401 (k) plan at any age, without paying a penalty

It does require some tax planning however

It can definitely help with tax arbitrage as well The strategy involves converting a portion of your pre-tax 401 (k) into a Roth

After 5 years, you can withdraw the converted amount without paying a penalty

You can't withdraw the profits from that converted amount however

Peter Lynch is a legendary fund manager, who compounded money at 29.30% at Fidelity Magellan Fund between 1977 and 1990.

Today is his 80th Birthday

I have compiled 80 Peter Lynch investing quotes in celebration for his birthday 1. Go for a business that any idiot can run – because sooner or later any idiot probably is going to be running it
2. Know what you own, and know why you own it
3. Selling your winners and holding your losers is like cutting the flowers and watering the weeds

Charlie Munger would have turned 100 today

Sadly he passed away last November

Warren Buffett's partner at Berkshire Hathaway was a fountain of knowledge and wisdom

I have compiled 100 Charlie Munger quotes in celebration for his life: 1. The big money is not in the buying and the selling, but in the waiting

2. Those who keep learning, will keep rising in life.

3. Like Warren, I had a considerable passion to get rich, not because I wanted Ferraris – I wanted independence. I desperately wanted it.

Charlie Munger has said that accumulating the first $100,000 from a standing start, with no seed money, is the most difficult part of building wealth.

Making the first million was the next big hurdle. To do that a person must consistently underspend his income

1/ Getting wealthy, he explains, is like rolling a snowball.

It helps to start on top of a long hill—start early and try to roll that snowball for a very long time.

It helps to live a long life.

There is another quote from him from a shareholder meeting:

2/

I sometimes get comments that "it takes a lot of money to generate enough in dividends to retire on"

It's an odd comment, because you would need to accumulate a lot of money to retire on with any strategy you select

Whether that index funds, growth stocks, real estate, dividend growth stocks etc If someone tells you that you can retire early with only a small investment, you probably should run the other way, because they are selling you a scam

The people who are in a rush to get rich quickly, never really get rich in the first place

Drop the instant gratification

Warren Buffett turns 93 tomorrow

Here is a thread with 93 investing lessons I learned from him:

1/93 1. “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1”

2. “Remember that the stock market is a manic depressive.”

3. “The most important thing to do if you find yourself in a hole is to stop digging.”

4. “Price is what you pay. Value is what you get.”

Dividends in the US have increased faster than the rate of inflation

It's very rare for US Dividends to decrease

In the past 60 years, US dividends have only decreased during the 2008 Global Financial Crisis

Prior to that, US dividends decreased during the Great Depression of… twitter.com/i/web/status/1… I believe that investors would do better if they focus on the dividend income generated from their portfolios, and ignore short term fluctuations

I focus on companies that increase dividends for a certain minimum number of years

This achievement does not happen by accident

Charlie Munger has said that accumulating the first $100,000 from a standing start, with no seed money, is the most difficult part of building wealth.

Making the first million was the next big hurdle. To do that a person must consistently underspend his income

1/ Getting wealthy, he explains, is like rolling a snowball.

It helps to start on top of a long hill—start early and try to roll that snowball for a very long time.

It helps to live a long life.

There is another quote from him from a shareholder meeting:

2/

Hershey $HSY stock went nowhere for 4-5 years between 2013 and 2019

Then it increased by 150% in 4 years

The stock hit an all-time-high today

I hold, but I think the stock is a little rich on a valuation basis

P/E 26.34
10yr annualized DG 9.62% I like to look at the trends in earnings per share over the past decade

Company is expected to earn $9.41 this year as well

Rising earnings per share will fuel future dividend growth and increase in intrinsic value

These are the Dividend Achievers from 1992 with the highest Return on Equity (ROE)

The companies on that list are still around. However, many of them have also been acquired.

Do you think high ROE could be a sign of a competitive advantage This is a list of the 1997 Dividend Achievers with the highest ROE h/t @BrandonVanZee

I see a similar theme here

Berkshire Hathaway acquired See's Candies for $35 Million total in 1972

In 1971, See's had net income of $2.2 Million so it sold for a P/E of 16

Interest rates were 6% - 7%

That investment has generated at least $2 Billion in free cash flows for Buffett to allocate elsewhere Ironically, he could have purchased roughly 10% of Hershey's $HSY for that amount of money

Hershey was selling for roughly 16 times earnings as well and split adjusted $1/share

He could have simply bought 35 Million shares of Hershey

I love going through old stock manuals

It's helpful to see how conditions looked like for the investors during that time period

I bought old copies of Moody's Handbook of Dividend Achievers from the 1990s and 2000s a while back

Here are a few snippets from the 1992 edition: Coca-Cola $KO

The idea of getting rich quickly is appealing and romanticized on Twitter

But it is not based on reality for most self-made millionaires

It takes the typical self-made millionaire at least 32 years to get rich, according to a study of self-made millionaires by Tom Corley Here's a breakdown from the study:

1% became wealthy before the age of 40
3% became wealthy between age 40 and 45
16% became wealthy between age 46 and 50
28% became wealthy between age 51 and 55
31% became wealthy between age 56 and 60
21% became wealthy after the age of 60

Peter Lynch is one of the best-known investors of our time

He was portfolio manager of Fidelity Investments' Magellan Fund for 13 years

I wanted to share a list of 25 investing rules from Peter Lynch: 1. Investing is fun, exciting, and dangerous if you don’t do any work

Have you ever noticed how many average Joes accumulated wealth by investing in simple concepts like:

- Dividend Stocks
- Real Estate
- Index Funds

Then holding for decades...

These are not complex investments, they are simple and easy to understand

They require patience.. These strategies do not seem sophisticated or sexy

They are pretty boring

But they work

These simple strategies work, precisely because they are common sense strategies

In a world where everyone wants to get rich quick, it's the get rich slowly folks that get rich

In 1919, SunTrust Bank helped Coca-Cola in its IPO

The company took its fee in shares of Coca-Cola worth $110,000

It stored them in a vault for 90 years, but cashed the rising dividend checks

SunTrust sold those shares by 2012 for about $2 Billion That's a fascinating glimpse from SunTrust's annual report for 2006:

You rarely see a cost basis of $110,000, and a value of $2.3 Billion

That's the power of long-term investing in a nutshell

Yield on cost is calculated by dividing the dividends received from an investment over the cost paid for the shares

I view yield on cost as a forward looking metric

It combines my yield and growth expectations into a certain amount of dividend income at a future point It's fascinating to see in action, anytime you buy a security. It get's me thinking about the current yield, growth in earnings per share, dividend safety, valuation.

Of course, it easier to calculate it based on historical transactions

Some folks ask me what is the best dividend ETF out there

The reality is, there are a lot of dividend ETFs

Returns vary from ETF to ETF and period to period

Instead of picking stocks directly, you end up picking stocks indirectly through ETFs

$SCHD $VOO $SDY $VYM $VIG I prefer to build my own ETFs at home by creating my own criteria and sticking to it

Otherwise, I believe a good dividend growth ETF is the S&P 500 $VOO. It has managed to increase annual dividends since 2009

It's great for an automatic investment through a 401 (k) plan

Warren Buffett's company will receive $736 Million in dividends from Coca-Cola this year

They paid $1.3 Billion to acquire 400 million shares of Coca-Cola between 1988 and 1994

He's earning an yield on cost of over 56% on this investment Berkshire receives their original cost in dividends alone every two years on average

Warren Buffett's Berkshire has received $9.866 Billion in dividends from that Coca-Cola position

It is worth almost $24 Billion today

Warren Buffett included the following quotes from Charlie Munger in the 2022 Letter to Berkshire Hathaway Shareholders • The world is full of foolish gamblers, and they will not do as well as the patient investor.
• If you don’t see the world the way it is, it’s like judging something through a distorted lens.

How to evaluate Real Estate Investment Trusts (REITs)

I look for several items, when evaluating REITs 1. Funds from Operations (FFO)

We use FFO, as opposed to Earnings Per Share with REITs. FFO adds net income plus depreciation and amortization of real estate assets, reduced by gains on sales of investment properties

I like to see FFO/share growth over past 5 - 10 years