The Clown in Chief – Stable Genius? Great Investor?
Far be it for Slack Investor to disparage the wisdom of the majority of voting Americans that have just elected Donald Trump for four years as their president. Despite Trump declaring himself as a ‘stable genius’, my mother wisely used to say that ‘Self-praise is no recommendation’.
“I built what I built myself” – Donald Trump
PolitiFact disputes the extent of this claim. There is no doubt that Donald’s path to being a billionaire was helped by intergenerational wealth transfer. Around 1974, his father lent him $140 million in today’s dollars – most of which was never paid back.
“Fred Trump actually lent him at least $60.7 million, or $140 million in today’s dollars.” – New York Times: Special Investigation
There is some contention on how much was available in ‘free cash’ but, if the available amount was invested in S&P 500 stocks in 1974, PolitiFact estimate that it would be worth at least $3 billion today. Using different initial estimates, the National Journal estimates that passive investing in stocks could have enriched Donald by $US8 billion. So, it seems that Donald was destined to be a billionaire – whether investing in real estate – or the stock market.
“Bloomberg puts Trump’s current net worth at $2.9 billion, Forbes at $4.1 billion. The National Journal has worked out that if Trump had just put his father’s money in a mutual fund that tracked the S&P 500 and spent his career finger-painting, he’d have $8 billion.” – Source: National Journal
To further harp on about the miracle of compound interest , there are huge advantages in starting to invest at an early stage. The chart below contrasts the case of Investor 1 at age 25 and investing $5000 per year for 10 years – then stopping, and allowing the compounding interest to do its work. Investor 2 doesn’t start his investing quest till the age of 35, and invests $5000 per year for 30 years. He never catches up to Investor 1.
Of course, Slack Investor is all about personal empowerment and the chart above rings the bell on starting your investment journey as soon as possible. In the journey of life, you may be one of the lucky ones to receive a gift or inheritance along the way – this advantage is huge! Slack Investor acknowledges his privilege and was given a gift from his grandfather’s estate equivalent to 30% of a year’s salary in his early thirties. The gift went straight on my mortgage.
This makes Slack Investor ponder about the help that a monetary gift can bring. Slack investor is all for self improvement, through education or travel. However, if given a gift of money, he would recommend, at least, using a good portion of it to reduce any debt – or invest. But do it now.
December 2024 – End of Month Update
OK, someone must have been naughty! The year closes and there was no December ‘Santa Rally’ this month. All followed markets fell. The ASX200 down 3.3%, the FTSE100 down 1.4%, and the S&P500 down 2.5%. Slack Investor remains IN for the FTSE100, the ASX200, and the US Index S&P500.
I haven’t yet done the maths on the market yearly gains that include dividends. In raw terms, for calendar year 2024, the ASX 200 was up 7.5%, the FTSE 100 up 5.7%, and the S&P 500 up 23.3%.
All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index). The quarterly updates to the Slack Portfolio have also been completed.
Discover more from Slack Investor
Subscribe to get the latest posts sent to your email.
Merry Christmas Slack Investor
A huge thank you for all of your informative articles throughout 2024. Over the last year, due to more time on my hands, I have read them more thoughtfully and often gone back and re-read previous articles. As a result, I am convinced that I have had a more successful year due to changes to my investing approach. I always look forward to reading your new articles and enjoy the way you make them interesting – often with personal stories. May they continue throughout 2025. Your effort and generosity of spirit are what Christmas is all about.
Best wishes to yourself and family, for good health and a happy year ahead.
Veronica M.
Thank you for your good wishes Veronica. You are kind to mention that you find my site useful. I wish you and your family all the best and hope we both have an outrageously bountiful investing 2025. Optimism should always be the default position at the start of every year. Cheers, Slack Investor
Thank you Slack Investor
Intergenerational wealth transfer was a good read. An interesting slant on the loan/gift the new president received from his father and how he chose to invest it. I can’t imagine him finger-painting though reckon there would be a dollar in it now for him!
Regarding the advantages of compounding interest, what are your thoughts on Dividend Reinvestment Plans? I no longer avail myself of them with individual shares which provide it. Part of the reason is because I could wait around for several years before I actually received a new share, with the low number of MQG I own for instance. I just wait for the dividends to accumulate before I then use the funds to purchase a new stock or collectively top up others of my choosing despite the brokerage.
Keep up the good work. Veronica M.
Ahhh Veronica …. What a joy to hear from you! An excellent question on Dividend Reinvestment plans. I share your view on DRP’s and agree that they are generally not worth the bother (paperwork) for diligent investors who will reinvest their combined dividends anyway while in accumulation mode. I have one exception though. If you are lucky enough to own the fantastic Australian truck parts company – Supply Network (SNL), sign up to their reinvestment program through their registry (Computershare) right now! SNL unusually reward their shareholders by giving a discount on share price through their DRP that has ranged between 11% and 32%. I haven’t looked this gift horse in the mouth yet to see how they calculate the discount. However, I think these shares are good value at current prices – let alone at a discount. Sign me up – this is worth the paperwork! Happy Investing, Slack Investor
Mr Slack,
I do own SNL and did not know this!
Like others I have moved from DRP by default, and now direct any reinvestment. This will be an exception.
Thank you. Trevor
Hey Trevor, glad to pass on the generosity of the SNL board when it comes to Dividend reinvestment. The amount of discount is up to the board on each distribution occasion. According to the January 2025 SNL dividend notes “Subject to the rules of the DRP, shares will be issued at a discount of 2.5 per cent to the volume weighted average market price of the shares (on an ex-dividend basis) during the five business days subsequent to and inclusive of the ex-dividend date. The Directors also advise that the price will be capped at $30.00 per share.”
I would be happy with the 2.5% discount. But, will accept the boards kindliness if they cap the price at $30 (SNL is currently trading at around $35. Cheers, Slack Investor
UPDATE 28/03/2025: The $30 cap must have been a minimum. The board has announced the SNL DRP price is to be $32. The current share price is $36.50 – a 12.5% discount … Not Bad!
Thank you Slack Investor
‘Ask and you shall receive’.
Veronica M.