Well, I did it. I gave in … I caved … I folded. I couldn't take the pressure any longer! I joined the masses.
I bought a high-def TV
No sooner did I get in line to pay for it than my girlfriend scampered off into the mall, yelling those four words I hate to hear: "I'll be right back."
Twenty minutes later, I was still standing in front of the store next to my giant cardboard box. A security guard ambled over and asked, "And how is it that you came to acquire such a great thing?"
"I've just been working hard, I guess."
He let out a deep laugh, put his hand on my shoulder, and told me something I won't soon forget. "Man, we all work hard. But to accumulate your monies to buy something great -- now, that is truly a blessing."
An unlikely investment lesson
His name was Sidney, and he was from Ghana -- where, for most of his life, he had worked from sunrise to sunset every day so that he and his family could eat.
Now, I won't suggest that you start -- or continue -- investing just because some people don't have the option, but I will say my conversation with Sidney reminded me why I started investing in the first place.
I also remembered this when John Montgomery, founder, CEO, and fund manager of Bridgeway Funds, came to Fool HQ to give us some insight into why -- not how -- he runs his funds.
Granted, I would've loved to learn more about how he invests. His Bridgeway Aggressive Investors 1 Fund (BRAGX) has returned a jaw-dropping 19.1% annualized since he started it in 1994, and currently owns market superstars Intuitive Surgical (Nasdaq: ISRG), Mosaic (NYSE: MOS), and Potash (NYSE: POT).
Nonetheless, it was refreshing to see that Montgomery has never lost sight of why he's investing. See, Bridgeway donates a whopping 50% of its after-tax profits to charities -- most notably to foundations dedicated to stopping genocide in Africa.
I won't lie …
My reasons for investing aren't nearly as noble as Montgomery's. Truth be told, I just want my money to work hard for me now so that I don't have to work so hard in the future.
If I can manage to invest well, that's entirely achievable. It's also something I imagine Sidney would consider a blessing -- which is why I wish I had taken more time to tell him about the power of investing.
Sure, I could've explained to him that by investing in Dell (Nasdaq: DELL) or Wal-Mart (NYSE: WMT) back when they were still relatively unknown he could've raked in gains of anywhere between 5,000% and 52,000%. But I doubt that would have had much of an impact on him.
What I should have told him …
Twenty years ago, if you had set aside 100 hours worth of pay ($1,000 if you make $10/hour, $5,000 if you make $50/hour, etc.) and invested it in some well-run companies, by now you could have accumulated hundreds or even thousands of hours worth of pay -- without having to work a single extra minute.
|
Stock
|
$1,000 Invested 20 Years
Ago Is Today Worth:
|
Hours to Earn That
Amount at $10/hr
|
|
IBM (NYSE: IBM)
|
$6,690
|
669
|
|
American Express (NYSE: AXP)
|
$10,030
|
1,003
|
|
McDonald's
|
$13,360
|
1,336
|
|
Procter & Gamble
|
$20,900
|
2,090
|
Historical returns include dividend reinvestment.
I know what you're going to say
Yes, I cherry-picked these results to prove a point. But let's be honest -- it didn't take an investment genius to buy shares of these industry-dominating businesses 20 years ago.
And by doing so, Sidney could have secured an amount of money that would have taken him an entire year of 40-hour weeks to earn. In essence, he could have added a year to his life.
How to add nine years to your life
The 20-year returns on those stocks are impressive, but they don't begin to compare to the returns of the 10 best stocks of the past decade.
Had you invested 100 hours' worth of your salary into any one of these under-the-radar companies just 10 years ago, today you'd have at least an entire year's salary. And had you invested in Hansen Natural, you could've secured a mind-boggling 487 weeks worth of salary -- which equals more than nine years of your life.
Let's face it
We all work hard to pay our mortgages, to put our kids through college, to keep charities afloat, you name it. And while investing allows us to accumulate wealth -- without putting in extra time at our day jobs -- uncovering life-changing investments like Hansen Natural is no easy task.
Of course, you don't have to go it alone. Our Motley Fool Hidden Gems service focuses on finding the next small-cap winners, and since its inception five years ago, Hidden Gems has racked up average gains of 33%, versus 10% for the same amount invested in the S&P 500. While the focus on well-run, underfollowed companies -- like Middleby, a fantastic small cap that makes ovens -- might not lead to the next Hansen Natural, many subscribers have already added days or even weeks to their lives.
If you're interested, you can see every single Hidden Gems recommendation -- including the two top picks for new money now -- absolutely free. Simply click here.
Austin Edwards
owns shares of Intuitive Surgical, which is a Motley Fool Rule Breakers recommendation. Wal-Mart, American Express, and Dell are Inside Value recommendations. The Motley Fool has a disclosure policy.
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