Thunder Drake

I want to take the time to give my salutations and congratulations to every and all active hoard owners out there. You understand the value of having humankind’s enterprises empower you. You understand the art of money making money. You’ve taken action to secure your wealth. You’ve mustered the courage to do it and the tenacity to maintain it. It is a true accomplishment indeed, my friend. An ale worth drinking to.

This time, I would like to dedicate a moment to those who have not yet begun the process of building their hoard. Of all the things I’ve been yammering my flabby dragon lips over in regards to this process of building. The best advice I could probably provide, perhaps more so than anything else I’ve bantered on about thus far, is this.

Start your hoard.

That’s it. It’s the most sound, simple thing I can preach. I can go on about the golds and the silvers until the gods of time die of old age. I can talk about Where to get them, the history of them, but the only thing I can advise to aspiring hoarders/investors is to begin sooner, than later.

Easier said than done? It can be a bit nerving, yes… But allow me to encourage those whom have not yet begun… Perhaps these numbers will give you that little foot-paw to the rump and send you on your way to take action?

Let me offer an explanation on a few very important elements to measuring your hoard’s gains. I will also show you how absolutely crucial it is to start sooner than later.

Dividends, Interest and ROI

For those whom do not know how interest or rate of return works, it can be summarized as this.

• Return On Investment, or Rate of Return, is simply how much you make over a certain period of time. This can be determined.

For example, let’s use a buy and sell scenario if you bought one ounce worth of gold. You buy it at $100 and sell it at $1,000. You have X9 Return on Investment. Or a 900% Return on Investment. Ten times your money. If you bought it for 500 instead, you’d have a X2 ROI. Or 100% ROI. Two times your money.

You can also use a yearly scenario to calculate how much you earn back every year. Holding dividend stocks, would start you off at about 3% ROI, but as you buy more and more shares, the return can get explosive.

• Interest, or compounded interest, is a percentage made back from your investment, such as bonds.

$10,000 dollars with a 5% yearly interest rate would get back $500 dollars, making the bond worth $10,500. That $500? If you kept it in the bond, that $500 will work for you! In 2 years, that bond will be worth $11,025. In 5 years, $12,762. In 20 years, $26,532. In 40 years, $70,399. Seven times your original holding! …Minus inflation, of course. But bonds could go higher. In other words, your interest is earning you more interest!

• Dividends are what a company pays you. You are paid for every share you own, which adds up to a certain percentage at the end of the year. Also, the dividends themselves grow. All these factors differ for each company.

There is an immense difference between a hoarder who starts at age 25 in comparison to a hoarder who starts at age 35. A girth-teetering difference.

Let me show you through the 40 year difference on dividends.

For this exercise, we are going to invest in blue chip stocks. From 1970, to today, 2010. Let’s call our portfolio Draggy Portfolio. We’ll own about… 20 different dividend companies. Some risky, but most big time companies. For simplicity’s sake, let’s say they’re all enduring. Enroll into a DRIP for all of them. That is, a Dividend Re-Investment Program. Draggy Portfolio’s dividends grow about 16% every year on average. The dividend yield averages 3%. $500 goes into it every month.

Can you see the difference between just 10 years? It’s jaw dropping, really. Time is like the fuse of a gunpowder keg. It’s short, and it burns rapidly.

You might have noticed two interesting things, however. 1971 was when all nations were taking off of the gold standard. This means all money went fiat. You’ll also notice that around the year 2002, there was a huge drop in the value. But it recovered in just 3 years.

Since the loss of the gold standard, acquiring shares via fiat money has been that much easier. Also, the value of the stocks fluctuated madly ever since. This is why the market would then so volatile and scary.

Also, in regards to the stock market crash you see, the effects on dividends didn’t change much. Actually, if you noticed how much quickly it recovered, it would have been a perfect time to acquire more stocks. Even if just sticking in $500 every month. But even by then, you’re a multi-millionaire. Go figure!

Lastly, the value of the shares themselves may be a tad inaccurate. As they usually start off high initially. But over decades of time, this makes for an accurate courtyard figure of how shares grow over time. Because dividends get monstrously effective 20 to 30 years down the road.

But everything I’m stressing up to this point is held in regard to one important principle. The most valuable element, more than market of stocks, gold, silver, and precious papers combined, is time. Time is the most valuable contribution of all hoards. It is what makes hoards grow. Just like a tree. Or a plant.

Where should a youngling begin?

Perhaps it’s not just the smart or the swift who get ahead, but the brave. Starting a hoard with such value iffy treasures in the modern human market is certainly a steep venture. One that takes a little bit of courage. It’s also important to remember that in the end, life is one big adventure. If you do not venture, you do not gain. Look within your adventurous side and find that desire within.

Or perhaps it’s a matter of bad habits. Buying luxuries before you buy anything else. Buying silly things. Buying toys or a fancy a personal home that puts you in debt. I intend to cover entirely the matter of bad spending, but I will propose this to suffice. For those whom spend everything they get, take note that there is nothing wrong with it, save for one single failure.

The failure to pay yourself first.

If you set aside even 5% or 10% of your labour’s pay the moment you get it into your hoard, you set a better habit in motion. If your mental habit is to spend everything you get first, then use that habit to your advantage if you bear it. For in the end, it is your hoard that’s supposed to pay for your luxuries.

What about not knowing where to start? Even if your disciplines and start up is in order, or which treasures to exchange your paper money for?

I have covered the majority of these in previous speakings, but To summarize a few ideal places to begin.

- Indexes. I started off doing this to get me some exposure to the market of stocks.  If you’re interested in “diversification”, split your money in about four or five of the major human world markets, so you can take advantage of the rises and falls at all times. They also offer Real Estate Investment Trusts, as well as bond markets all cobbled together. You lack option control with indexes, but they serve as a fantastic start.

(Out of character note: For indexes in USA, look up index fund companies, such as Vanguard. If you live in Canada, you don’t have as much access to index funds. TD Waterhouse’s E-series funds serves as a good replacement for what is not available yet. You can also invest in ETF’s from iShares to get exposure to these markets as well as other markets, such as real estate.)

- Gold and silver. Surely you know what gold and silver looks like right now. Buy bullion from banks or dealers, or strike deals acquiring it from other people.

- Dividend stocks. Find yourself a good brokerage, a personal broker or electronic. Start amassing those big blue-chip companies.

There are many other different things to consider amassing. Try getting a nice little abode with a good tenant, for example. Or perhaps pursue a venture in intellectual property or business.

Onward, little whelp!

The most important aspect above all is simply developing the habits and setting the table for yourself. Then once you set the table, simply deduct a portion from everything you earn and drop it off into your hoard. It’s easier said than done. Much easier said. But it can be done.

If there’s something common between man and dragon, is that we are both creatures of routine and habit.