Polliesdividend

The Snowball Effect – Book review

It is important to keep educate yourself. Stephen Covey calls it Sharpen the saw.

To do this, I follow seminars and/or webinars, read books and blog posts from fellow DGI’s. This to gain new insights and of course learn something new. And because reading is FUN!

I read a lot of books, all kind of books. From biographies, management books to of course financial books. I really enjoy reading. This joy I hope to give to my kids! Reading books opens up a whole new life and you enrich yourself with new knowledge. What a great gift!

In my 2017 goals I wrote that I would read at least two books every quarter. And I will share my new knowledge with you, my readers. I will do this to keep the snowball of knowledge rolling.

Here is the seventh book review for Polliesdividend.

 

 

The Snowball Effect – Using dividend & Interest reinvestment to help you retire on time – By Timothy McIntosh

Dividend and their reinvestments are friends of the value investor. We, as Dividend Growth Investors (DGI), know this better than anyone. A lot of books are written on this subject. Today I give you my review on a recently published book by Timothy McIntosh – The Snowball Effect.

You may know him from several other books (The Bear Market Survival Guide; The Sector Strategist and the Comprehensive Financial Planning Strategies for Doctors), his articles in the WSJ, NYT, USA today or maybe from his tweets on twitter @DividendsMGR (I can recommend following him).

 

Time is the best ally of the long-term buy and hold income investor

 

In this book Timothy McIntosh shows you how to become a “ Snowball” investor. This type of investor focuses not on what the price of the investment is, but the income it produces. A “Snowball” income investor embraces a buy-and-hold state of mind and buys dividend-bearing stocks and bonds.

When reading this book, you immediately feel and know that an author with experience and the gift of story telling has written this book. And yes, Mr. McIntosh draws from years of experience and takes you as reader on a ride through more than hundred years of the stock market. And along the way teaches you many interesting facts and gives you clear advice on how and what to invest in.

Ups and downs of stock value become less important if you invest in stocks that pay dividends. When reinvesting, you want the prices low, because you buy more stocks when the price drops. Over time, as the author illustrates through many examples, you are more likely to increase your portfolio value by reinvesting your interest and dividends than by waiting for the market value of the shares to rise.

 

Investors love dividends

 

What make the book stand out are the numerous real world examples and the chapter about covered call strategy. This strategy is a great tool for dividend investors wishing to collect additional income from their investments over time.

The last part of the book is a nice bonus for the reader. It is a list of his Top 100 Picks – dividend-paying companies that McIntosh finds reliable choices for this formula. What a treat!

 

My thoughts

A simple and very effective strategy, written in an easy to read style. I recommend this book to all DGI’s and everyone how wants to learn about true wealth building and the retiring on time.

This book gives a clear understanding of the basics of the stock market and provides a method for building wealth. Time well spend!!

 

A snowball approach to stock investing allows you to focus not on the price of the shares you own, but instead on how many shares you own.

 

Take away

Okay, what do I take away from this book after I digested it?

  • It is an easy and nice to read book
  • All important metrics are explained in a simple way
  • I learned that an investor who attempts to build wealth during periods of a high CAPE ratio is almost always doomed to low future returns.
  • First rule of covered call writing – pick a company that you already own whose current stock price, you believe, is above you target price and whose dividend yield has fallen below his historical average.
  • It’s not the price of the stock that should matter so much, but the income it provides.
  • Great list of 100 great companies (Thanks Timothy for your research 😉 )
  • Nice list of suggestions for additional reading

 

Companies that pay dividends will always provide you with a return. Always

 

Pollie-rating

The Pollie-rating for this book is:

Pollie-rating

 

Have you read this book? What do you think of the lessons from this book?

Cheers,

Pollie

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