A Billion Dollars Of Research Cannot Be Wrong

gillette razor blade A Billion dollars of research cannot be wrong.The Procter & Gamble Company (P&G) PG

 So, I saw this very cheap razor blade (on the left), and I couldn’t believe the price. So I ditched my Gillette Mach 3 Turbo for few weeks and after all the cuts and nicks, I went back to my Gillette—there is just no comparison. Now, let’s take a peek at the company who makes my Gillette Mach 3 Turbo razors and, as it turns out, they did invest over $1 billion in making their razor much better.

The Procter & Gamble Company (P&G) has top line revenue of over $80 billion and over $11 billion in net profits in the past year, which means that there is a 100% chance that you and your loved ones use more than one of their products on a daily basis.

 “P&G has 23 brands with annual sales of $1 billion to more than $10 billion, and 14 with sales of $500 million to $1 billion — many of those with billion-dollar potential.”

The best part is that they also pay out over $6 billion in cash dividends each year to shareholders. Now, ask yourself this question: Do you own any shares of this company? NO? Why Not? If you and a few hundred million people buy and use their product each year, why do you not want a part of the $6 plus billion in dividends they are paying out each year?

You can start of by just buying one share and add to it each month.  Okay, I hear you saying what is the purpose in buying one share?

Then, here is the true story of Coca Cola (KO) and how a $40 investment is now worth $11 million!

Did you know that $40 invested in 1919 Coca Cola “Coke” would now be worth  $11,860,330.47! (Yes that is million) as of today (10-23-2014)? But, what I find remarkable is that they are one of the simplest companies; if you stop and think of what they do it is downright boring. They basically sell 3 (4 if you believe in urban myth where some people still think it is spiked with cocaine) things: water, sugar and food coloring.

Another lesson in investing in Coca Cola is to stay invested in good times, as well as troubled times, and to never panic. Coca Cola became a publicly traded stock in 1919 and it cost you $40 per share, but one year later due to the depression and the horrific stock market crash, your $40 would have been worth only $19—less than half of your original investment, but if you just hung in there and let the quarterly dividends and the occasional stock split compound for you, you boring beverage investment would pay off royally. Yes, coke is indeed “it”. 

Warren Buffet—who is worth over $67 billion—has admitted that is first investment (when he was 12 years young, he is now age 84) was in Coca Cola “coke” stock. 

Lesson: The simple things that you can understand and most of all the very things that you and others used/consume every day in good times or troubled times, will be some of your most rewarding investments.  And one last but very important thing; make sure they pay quarterly dividends. This is even better yet if the dividends are increasing at least every two (2) years. 

Questions:

What are some of the things you and your family use/consume each day?

Now stop and think, are these the the same things that tens of millions of people must use and consume each day, such as electric & gas for your home, gasoline for your automobile, your mobile/cell phone carrier and other thing such as medications?

Now do you, your friends and millions of other people have to pay for these goods and services each month?
Can you see how simple and easy this is to find safer companies to invest you money over the long term

Sherwin Brown

About Sherwin Brown

Sherwin has been an entrepreneur since he was twelve years old. He currently teaches, writes, and speaks to people about how to improve and safeguard all aspects of their financial portfolios.

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