Page 373 - One Thousand Ways to Make $1000

Fifty years have passed. You are now eighty years old, and ready to retire.
Let us see what has happened. The thousand dollars which you had invested
in a gilt-edge bond grew to $1,806 when you were forty. By fifty it had
climbed to $3,262. At sixty it had reached $5,891 and by seventy the $5,891
had grown to $10,640. Today, at eighty, your original $1,000, with a little
nourishing and watching, amounts to nearly $20,000 which, invested at 5 per
cent, will give you an annual income of $1,000 a year for the rest of your life.

By playing safe and exercising banker’s caution you made $19,000 on your
original investment. By looking for big returns, rather than safety, your friend
lost $20,000. That is the difference between investing money, and speculating
with it. It is not so much the loss of your original investment which should
worry you but the loss of the compound interest on that investment. Get
acquainted with compound interest. It is a wonderful discovery.

The Best Investment for a Business Man

There are many ways of investing money safely. Some think that building
and loan associations are the best. Others favor first mortgages on good
property. Others cannot see anything but listed bonds. Still others prefer
seasoned preferred stocks. The plain truth of the matter is that there is no
“best” investment. The best investment for one man, may easily be the worst
investment for another. It depends on a great many conditions besides the
value of the proposition itself.

The depression has proved the wisdom of the old advice to diversify your
investments, and not put all your eggs in one basket. After you have
accumulated a working reserve, it may also be advisable to set aside a part of
your savings for the purchase of listed stocks with a long dividend record,
which you think should enhance in value. Speculation in even listed stocks,
should never be attempted unless one can afford to lose, and does not need
the additional income.

Buy old issues at the bottom . Select an industry, closely allied to national
prosperity, which is temporarily depressed.
Buy bonds with a high collateral value—meaning bonds on which a bank