Yesterday I used my $5,000 2012 Roth IRA contribution limit to purchase 129 shares of LNCO at $38.50. I'm 37 and looking at a 30 year holding period for this stock. According to my investment calculator, with the assumption of an 8% annual return and no further contributions, my $5,000 investment will grow to $54,679 when I'm 67 (in today's $). Understanding there are risks to any investment, anyone have any assumptions/opinions based on that expected rate of return over 30 years for LNCO? Conservative? Aggressive?
Don't be sidetracked by the stock of the moment; i.e., Cramer. I retired with a defined contribution, IRA and savings totaling approximately $400,000 in 1998 at age 62. I avoided the hot tech stocks, investing in solid companies, IBM, XOM, and NG and oil companies like LNCO and gold; never could understand why anyone would own a retail stock that pays almost zero dividend. My policy is PAY ME FIRST. While the market was tanking from 2000 to 2006 I made huge gains in NG, oil and gold (Yes, buy some gold)
Today I have almost $3 million, including a bunch of LNCO and LINE.
I hope you and other conservative investors prosper beyond your expectations.
I absolutely agree with Biker. I too, invested in many diversified companies. And while I didn't end up with $3 million, I did end up with $1.5 million and retired at the age of 60, with no pension. I live off social security and some of my dividends. I am able to continue investing 'excess' dividends, so my investments continue to grow. I never touch my principle for my investments. Note that Biker diversified his investments and continued investing throughout his career. These two rules are musts; be persistent and diversify.
Bigsell, great plan, great thinking. It is very easy to save for retirement with dividend paying investments, if you start young and persist throughout the years. You'll find out that it's not a sacrifice but actually fun to manage/invest in your retirement funds. You would be surprised how many people absolutely fail to plan for their retirements, or to put anything aside. It's so easy, for so many people, to find an excuse not to invest for retirement; new car, vacation, latest electronic device, $150 monthly bills for phones/cable....etc.
So many think that their retirement savings plan can wait until they are in their 50s, but when the 50s roll around they see it is too late to start, so they don't ever start. These people will end up being the 'aged poor' working until they drop or trying to subsist on social security. It's tough being old and it's tough being poor, but being old and poor is terrible.
I retired 5 years ago, without any pension and not even old enough to be eligible for social security. I basically used the plan you are thinking of. EVERY YEAR, I put aside money in quality dividend stocks, EVERY YEAR WITHOUT FAIL! And because of this, I am actually very/very comfortable in my retirement. Now I am old enough to begin collecting social security and I supplement my income with the payouts from some of my dividends, not all. Because of the large dividend payouts I receive, I'm still able to reinvest about $2,000 month of them back into dividend reinvestment programs.
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I have many examples of how well your/my plan worked, but I'll share one with you. In the early/mid 1990s I invested my $5,000 per year in Occidental Petroleum Stock. I invested for 4 years and did not use the dividend reinvestment program. My cost basis for OXY was $20k. I have held on to this stock for almost 20 years, the dividends I have received have more than covered the cost basis of the stock. Today my OXY shares are worth $200,000 and they pay me $6,200 per year in dividends.
Two important rules, (1) be persistent and don’t allow yourself to find a reason to quit your annual investment plan. (2) Diversify, diversify, diversify; there are too many solid companies (Lucent, Nortel, Worldcom, Lehman Brothers, Washington Mutual…….etc) that have folded over the years, leaving their shareholders with nothing.
Bigsell, you have a great plan and would be wise and wealthy if you stick to it. And I speak from experience.
Looks like you have done your homework on this. And as well as this is.... you will need MUCH more money in the future. Just make sure you repeat this process for several years yet. And as it is ROTH... be excited that (until the Gov. changes it) you money comes out tax free.
Can LNCO go on like this for 30 years? You GUESS is as good as mine. Who knows. But the theory is correct.
Sentiment: Strong Buy