How a Midwestern Couple Turned $30,000 into $300 Million
In 1957, Bill and Dr. Carol Angle were like any other husband and wife. They wondered about their financial future: making ends meet, retirement, etc.
The Angles heard about an investment class being taught by a bright 21 year-old kid. Rumor was, he impressed just about everyone he came in contact with. So, they decided to check it out. They joined about 20 other folks that night for the class, called “Investing Principles.”
What the Angles didn’t know was that this kid wasn’t just impressive. He was also a genius. As the story goes, by the end of the talk, Bill Angle announced to the crowd, “I’m putting $10,000 in. The rest of you should, too.”
Carol Angle was a believer, too. They would later up their contribution to $30,000 — half their life savings. It turned out to be the best decision they ever made. The Angle family is worth more than $300 million today.
There are dozens of families with a similar story. A 1998 article in Forbes mentioned that there at least 30 families in the local area, and many more elsewhere, worth at least $100 million.
All thanks to a young man who had to take a Dale Carnegie course on public speaking before he had enough confidence to get up in front a crowd.
By now, you can probably guess who I’m talking about.
Many already know the story of Berkshire Hathaway (NYSE: BRK-B). In 1962, Warren Buffett began buying the shares of a struggling textile company, which at the time was trading well below its book value.
Just five years later Buffett would buy the entire company, making it his crown jewel. By 1970, Buffett’s ventures funded by Berkshire’s company’s cash flow were blossoming, particularly in insurance. The insurance business offered Buffett something he dearly loved — loads of cash.
As you know, insurance companies collect premiums and hold them until presented with claims. In the meantime, it can invest that money — called the “float” — and earn a nice return. Buffett and Berkshire simply take the float and buy undervalued companies that generate even more cash.
You Don’t Have To Be The Next Buffett To Get Rich
If you know anything about Berkshire, then you know that Buffett’s record gains are near impossible to duplicate.
But my Daily Paycheck readers and I have something in common with Buffett.
We share a love of cash and compounding.
You see, we use the dividends generated by our portfolio to buy even more shares of our holdings. The result: dividend paychecks that grow with each passing month.
Here’s a look at the paychecks we earned in November:
|Date Payable||Security||Freq.||Dividend||Shares||Total Paycheck|
|11/1/2019||Blue-chip telecom stock||Q||$0.62||107.4||$66.03|
|11/1/2019||Big Pharma stock||Q||$0.41||106.1||$43.50|
|11/7/2019||Preferrred stock fund||M||$0.10||113.8||$11.50|
|11/7/2019||High-yield bond ETF||M||$0.49||132.32||$64.84|
|11/12/2019||Muni bond fund||M||$0.06||207.9||$12.26|
|11/15/2019||Big Pharma stock||Q||$1.07||100.0||$107.00|
|11/15/2019||Consumer cyclical stock||Q||$0.75||34.1||$25.43|
|11/15/2019||Biz development fund||M||$0.21||258.7||$53.02|
|11/27/2019||Utility income fund||M||$0.18||455.3||$81.95|
|11/29/2019||Tax-friendly div. fund||M||$0.10||326.2||$33.27|
|11/29/2019||Preferred stock fund||M||$0.11||320.1||$35.85|
|11/29/2019||Finacial sector fund||M||$0.16||140.0||$22.11|
|11/29/2019||High div/low vol fund||M||$0.15||100.0||$15.30|
|11/29/2019||Sovereign debt fund||M||$0.11||204.2||$23.28|
|MONTHLY TOTAL PAYCHECK||$1,194.04|
Overall, the portfolio paid us $1,194.04 in November. That’s actually a low month, since there are few companies that end a fiscal quarter (or pay quarterly dividends) this month. But as you can see from the table above, 16 of our 24 “paychecks” in November were monthly paychecks. So we know what to expect from these holdings each and every month. Of course, there will be dividend raises, too, which is even better…
By reinvesting our dividends in each one of these holdings, we’ve been able to create an income portfolio that’s more than doubled in size. Our readers can do the same — and watch the size of their portfolio grow year after year — or simply “flip the switch” whenever they’re ready to live off the income for retirement.
The point is, sometimes investors forget that it isn’t just Buffett who became rich from Berkshire Hathaway. The regular folks who invested with him amassed great wealth, too. And while I don’t claim to be the next Warren Buffett, we don’t have to hit the lottery by happening to meet the next Warren Buffett, either. The truth is anyone can create lasting wealth in the market by using a “get rich slowly” approach like the one we use over at Daily Paycheck.
It’s not too late for you to get started, either. If you’d like to learn how to start your own Daily Paycheck portfolio — and get a few high-yield dividend picks while you’re at it — I invite you to read this short report.