Sunday, February 17, 2008

Infiniti Point Book Review: The Lazy Investor by Derek Foster

I'm taking a step back and beginning to read a lot about the new sector that I want to investigate - which is the stock market. Even with the hiccups along the road and the roadblocks that slow us down from reaching our financial goals, I still believe that there is a way for people to escape the rat race and reach financial independence on their own terms without working until you're 60+. You learn to ride a bicycle by falling and getting back on again.

I was just recently invited to a seminar at the Vancouver Convention Centre, and although it was full of people, the presentations themselves were uninteresting to me. The business itself looks like it adds up, but I think I need some further investigation to decide whether or not it works from the numbers side of things. Luckily enough there just happened to be a Financial Forum just down the hall which caught my attention.

A book that stood out from the rest at the Coles bookstand titled: "The Lazy Investor" looked interesting, and the tagline start with $50 and no Investment Knowledge looked appealing. From the title - it sounded like it fit in with my mission to help others and myself along the way to the Infiniti Point.

In short - this book taught me about DRIP programs - or Dividend Reinvestment Plans. It's a method where you purchase stocks that pay dividends and then reinvest the dividends to buy more shares of the same stocks, which in turn pay more dividends and increase the amount of cashflow. With the dividend payouts and the equity gains in the stocks being purchased, the gains are slow and steady but also give you a near "recession-proof" system as long as the companies that you purchase the stock in don't go under.

In my own opinion - the pros and cons of this are straightforward.

The structure of the program is sound - however it sounds more of like a "PLAN B" structure to the real estate, investment banking and other systems I'm learning - but hey, everyone needs some sort of backup plan to make things work out. In comparison to the other options of subscribing to a commission based, trailer dependent financial planning company or bank rife with fees (no offense to those in the industry, but I just like doing my own homework) I believe that this would be an excellent passive route for spare investment funds.

Once I open up my first few DRIP accounts - I'll blog their results as part of my online portfolio.

Thanks for reading and Happy Investing!
Earl Flormata

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