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Save Yourself: Build Your Own Financial Lifeboat

By Bill Spetrino   |   Friday, 17 Sep 2010 10:53 AM

Many Americans older than 60 have survived the Great Depression and despite being immigrants without connections, trust funds or a fancy education, they have built themselves a significant nest egg while providing their children and grandchildren with the education and advantages they never had.

Sadly, their thrift and determination wasn’t able to be passed down.

Many seniors worry about passing a "legacy" to their heirs. Even worse, many of their adult children have consciously, or unconsciously, funded their current lifestyle with doses of financial “outpatient care” from their parents and grandparents

But as readers here know, to quote the late, great John Lennon: "There's no problem, only solutions."

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You basically have three choices. You can:

• Keep complaining about Federal Reserve Chairman Ben Bernanke, our government and low interest rates;

• You can let someone who doesn’t care about you manage your money;

• You can do what you have done best all of your life. Become successful in allocating capital yourself by using your common sense and intuition.

People always tell me my yard looks great and I thank them. One of my neighbors said, “Billy, you don’t cut the grass, so why are you taking credit?” I replied that I hire and pay the person who does, and they do a much better job than I ever could.

Today, many senior citizens have their money in banks (which nearly went broke two years ago) and collect 1.5 percent interest. Banks are backed by a country that is $14 trillion in debt and running deficits that are shameful

That sounds kind of risky to me.

Why not own a company which pays a handsome quarterly dividend and has a high probability of capital appreciation? For example, a company that’s more than 100 years old with a cash flow in the billions of dollars — and which hasn't run a deficit in more than 50 years.

I would rather trust such a company with my money than the U.S. government.

The key is knowing at what price to buy such a company.

Your job is to find an adviser who you can trust to be honest and competent.

Honest is easy. Someone who charges you a low daily fee with a money-back guarantee isn’t trying to take advantage of you. But many so-called gurus want $5,000 or more upfront for a yearly subscription.

The second part is harder: finding someone who has already achieved great success in finding dividend-yielding companies.
 
Obviously, a person who at age 32 was nearly broke — and at age 48 has an annual dividend income of almost twice their annual living expenses — is better than someone 65 years old who went to Harvard and only has $10,000 of annual dividend income.

An adviser with a documented track record of success and recommended by a company that you can trust is what you are looking for.

Now stop predicting the weather and start looking for someone who can build your own personal ark that combines safety, growth and income.

This is a stock picker’s market. Now either be one or hire one with a proven track record.

About the Author: Bill Spetrino
Bill Spetrino is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of the Dividend Machine. Discover more by Clicking Here Now.

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Many Americans older than 60 have survived the Great Depression and despite being immigrants without connections, trust funds or a fancy education, they have built themselves a significant nest egg while providing their children and grandchildren with the education and...
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