Description: The article is about sdccu login. As a part of the ongoing Managing Your Money seminars presented by SDCCU,the author gives his views about how to be a successful investor. He gets his ideas from some letters written by Warren Buffett indicating that investing can be a great thing to do.
You will rarely see a picture of Warren Buffett without a Coke. He owns 400 million shares of coca-cola stock,those are his total investment there over the years because he has invested in coke for many years. It’s worth about 20 billion dollars today. It has been a good investment,but he doesn’t care about that.
What he loves about that investment is the dividend,he loves the dividend on coca-cola. Coca-cola increases that dividend every year. When he started buying that 25 years ago,every year the amount of money he paid as a shareholder goes up. As a matter of fact, he reminds me of those things in his letter.
He writes an annual letter to shareholders,that is available on the website to everybody to read,you should read it. If you’ve never read the letter,you should get started now,you can find it on Berkshire Hathaway.com. It’s a great letter. It contains a lot of legal stuff that he has to write about,but when you get to the stuff where he talks about investing,he’s talking to us.
He’s not talking to CEOs, he’s talking to us. It’s incredible. You can read them all the way back,there are 51 of them on the website,you can read them all. In 2010, he said those words,by the year 2020,I will receive a dividend from coca-cola equal to the amount of money I’ve invested in the company.
He’s getting a dividend in two billion dollars,he’s getting a 100% return on his money every year in the form of the dividend,and the year after that, he’ll get paid more than that, because they’ll raise the dividend again. Coca-cola has raised its dividend for more than 50 years in a row,they’re not going to stop doing that,they’ll raise that,it varies from year to year. In some years,it might be 3% or 4 %,some years, it’ll be 8% or 10 percent,it’s what they can pay.
It’s phenomenal. I always enjoy watching the reaction of people in the room. Did Warren Buffett do anything at coca-cola that you and I can’t do? He saw a company that he loved, because he used their product all the time. He started investing in that company 25or 30 years ago. He stays with it during good times and bad times.
He knows what it’s, he understands the company, it has been a great reward. If we want to sit here and create a mutual fund, we would go around this room and everybody would shout out a different stock that they like or a company that they like that, but it means nothing.
Buffett started investing in the darn company and kept investing in the company, he reinvested those dividends,he took advantages of the compounding.
It pays off. In one of his letters about three or four years ago,he talked about his estate when he would die. Most people know that he has already acknowledged that he will die penniless,his estate will be donated to charity,he’s acknowledged that it will go to the Gates Foundation Bill and Melinda Gates Foundation.
That’s where he has been funding a lot of money every year,that’s identified as the place where the bulk of his assets will go. He said that he had also advised his attorney to make small bequest on his behalf to various people that he wanted to thank and reward for the relationship he has had with. What will be thought as a small gift for a man worth eighty six billion dollars?
I’d like to find that out, but I don’t think I’m on the list. I don’t know if that is a million dollars or 50 bucks,I don’t know what it is. He said that he wanted the attorney to send a letter with the check telling them what he wanted them to do with the money. This is the man who has the mind to invest over the years, he becomes a large shareholder in some of the great American companies.
He says that you should take 90 percent of the money and invest in an S&P 500 index fund. There’s the greatest stock picker of all time telling his friends and family to invest in an S&P 500 index fund, that tells you a lot about trying to beat the market. You might get lucky once in a while,but you can do that.
He says that you should use the other 10% to intermediate term bond fund,you should sit back and forget about it and let her go. There’s a lot of wisdom in that,I couldn’t agree more. If you’ve got kids or grandkids,the best thing you could do for them is putting money into an S&P 500 index fund, it’s a great way to go.
Warren Buffett thinks index funds are great investments,they’re boring. There’s nothing that will make you get real excited about owning an index fund. They keep going up in value year after year. For our kids and grandkids,we want them to become investors. Learning to invest is like learning how to ride a bike. How do you learn to ride a bike? You put your body in the seat and you start pedaling.
You’re going to fall down,you’re going to skin your knee, you’re going to have a few aches and pains,but once you get it,you will learn it. You’ll know how to ride a bike and you’ll know how to ride a bike for the rest of your life. Investing is the same thing,you need to learn to invest by doing it.