How nice would it be if you could have some of the best companies in the world buy you every car you’ll own for the rest of your life? Who doesn’t love free stuff? I know I do.
How did I get one of the fastest growing companies to buy my next car?
What I did was actually much less exciting than it sounds. I made 3 decisions in the past 4 years that made this all possible.
- October 22, 2015, I bought 8 shares of Amazon at $567.34
- November 10, 2015, I bought 5 shares of Amazon at $658.70
- February 16, 2015, I bought 3 shares of Amazon at $519.48
My total investment into Amazon comes in at $9,391. One thing I want to draw your attention to was my decision to purchase more shares in February 2015 when the stock was in a freefall. Anyone can say in hindsight “Amazon is a great company! Of course, they were going to bounce back!” In the midst of losing money, it’s hard to invest more into a loser. Now I look silly for not buying more while it was “on sale.”
So how has my investment faired over the past several years? Well, as of June 8, 2018, the stock price is now at a whopping $1,683.99! For those of you who don’t want to do the math-
- Total amount invested in Amazon- $26,944
- $17,553 in profit
- Total return of 186.92%
As much as I love being able to report these earnings, none of it actually matters until I sell. That’s an important point to consider in scenarios whether you have big winners or losers.
I have heard so many people say, “my ‘so-and-so’ lost everything in the recession back in 2008.” It’s important to remember that you only lock in your position when you sell. Did you know that if you had bought into the S&P 500 at the absolute peak back in 2007 and just held onto your investment through the recession, you would have doubled your money in late 2017? Anyone who didn’t panic was rewarded for their patience. You only lose when you sell.
Don’t get too hung up on the price at any particular moment, things can always change. Just be confident that if you are diversified and can hold on long enough, the stock market is a proven vehicle to create massive wealth.
Get paid in your sleep
The thing I like most about looking at my Amazon return is thinking about all the work I had to do to earn all that money… oh wait, I’ve literally never spent a second working for Amazon. I’ve made over $17,000 doing absolutely zero work– how cool is that?!
This is NOT a pitch to invest in Amazon, but this IS a pitch to invest your money in the market so the best and brightest companies in the world can work FOR YOU, and make YOU money 24/7, 365 days a year.
When you invest in a stock, you’re investing in an organization whose leadership team is focused on making the company, and it’s shareholders, more money. That is the power of investing in any wealth-generating asset.
How much is left for my car?
So far I have $17,553 in profit, and sadly, I won’t be able to keep all of that money. Uncle Sam will want his cut, and since I have held these stocks for at least a year I qualify for long-term capital gains, meaning my profit will be taxed at 15%.
$17,553 X 15%= $2,632 will be the government’s cut. That means $16,874-$2,531= $14,920 is left for me. Nearly $15k is a pretty nice chunk of change to buy a solid car, which will be lightly used in my case.
I want to issue you a challenge to focus on buying/building assets that will someday pay for your everyday life expenses. Earn your money once, put it to work for you, and before you know it, it’ll be working harder than you do!
What are some of your favorite investments you’ve made?