The practice of economy, directed toward a retirement
investment plan in the stock market, is in itself a source of
great revenue. It is the art of making the most out of every
stock market investment, with the definite purpose or goal
being to provide a life that is fully independent of monetary
concerns.
But the economy of making each investment in the stock market
does come with a price. It will require self-denial (the money
invested is not spent for goods or services). Economy and
self-denial, I'm afraid go hand-in-hand. To truly benefit from
a stock market investment, a savings plan should be adopted
and a systematic approach of dollar-cost-averaging (buying the
same stock at different prices) should take place; and when
the purchase should take place, economically clearly defined.
How to use your investment dollars will require forethought,
patience and wisdom, for they are the pillars of economy.
Before making any stock market investments know exactly what
you expect from those investments. Have the patience for the
investments too fulfill the expectation, and the wisdom to know
exactly how the investments will fulfill the expectation.
A forethought example:
I want every stock market investment to supply me with
ever-increasing cash for the rest of my life. I want my
retirement investment portfolio income to grow until the
income from my portfolio replaces the income from my job when
I retire.
A patience example:
I will make quarterly investments into each security owned to
raise the cash dividend supplied by each stock market
investment. I will start by owning three companies which will
supply me with cash dividends every month of the year. I will
also add the cash dividends to the quarterly investments. I
will build this stock market retirement investment plan up
until I own 500 shares of all three companies. Once 500 shares
of each company are owned, I will begin investing in three
more companies. Owning six companies will provide
ever-increasing cash dividends twice a month, until I retire.
My patience will eventually acquire 12 companies, providing me
with income every week of the year.
A wisdom example:
I will only purchase those companies that have a historical
record of raising their dividend each year. I know that a low
2% dividend paying stock is not necessarily bad. It means the
company in question is a growth stock, using most of its
profits to expand. A growth stock makes up for the lower
dividend yield by faster stock appreciation in the marketplace
(however, the company will still show a historical record of
raising their dividend each year). I will diversify into 3
stocks, right from the get-go, even if it means I start off
with as little as 5 shares of each company. I will not pay
commission-fees. I will place emphasis on increasing the cash
income paid to me from all my stock market retirement
investments.
I will also: "Put less emphasis on increasing this week's
pay, more emphasis on increasing my earning power by the right
reading." - Donald Laird
For some right reading try the PREFACE from the book `The
Stockopoly Plan - Investing for Retirement.' Visit:
http://www.thestockopolyplan.com
Charles M. O'Melia is an individual investor with almost 40 years of experience and passion for the stock market. The author
of the book The Stockopoly Plan – Investing for Retirement; published by American-Book Publishing. You can invest in the book at
http://www.pdbookstore.com/comfiles/pages/CharlesMOMelia.shtml