The Greatest Gift You Can Give

The search for the 'perfect gift'... Getting started is the first step... The greatest gift you can give... How to start someone on the path to financial freedom... A new addition to our Stansberry's Forever Portfolio... Five stocks to buy for the long run today...

Our editors write every day about businesses, economies, stocks, and increasingly, cryptocurrencies...

As we've said before, the amount of material we cover at Stansberry Research is truly astonishing...

A day rarely passes in which we struggle to find something to write about here in the Digest, where we try to highlight the "best of" our research in a hopefully informative and entertaining way.

In fact, our universe of publications offers so much to talk about that it's very easy to lose sight of the forest in favor of a single tree, as the old saying goes. In other words, in investing, work, or any part of life... it's easy to forget the big picture.

But more often than you think, we're fortunate to read something from our editors that snaps us back to reality... and screams at us, "Share me! Share me with everyone who might not even know they need this right now!"

It's the kind of stuff we love... It reminds us of what got us started in this line of work in the first place, and how we needed to first start learning about money before we could even think about making any significant amount of it.

Remember, nobody is born an investing genius.

Our colleague and Retirement Millionaire editor Dr. David "Doc" Eifrig was the one to smack us over the head with the reminder in his latest must-read issue...

Getting started is the first step on anyone's investing journey...

It's an easy concept to forget, but it's probably the most important for most people in our world today... and we don't take this idea for granted.

We don't think we can share this "big picture" idea and unquestionable truths like it enough.

It's what came to mind last week, when we started reading the interesting story from Doc in the April issue of his Retirement Millionaire advisory...

It was about a former janitor, gas station worker, and World War II veteran who – when he died at age 92 several years ago – had quietly amassed an estate valued at $8 million despite never earning what would be considered a high income.

In short, no one would ever guess that this man was one of the richest people in his town. He walked around in a jacket held together by safety pins. He drove a used car and was careful to avoid parking meters.

He lived frugally... His splurge was breakfast at a local coffee shop.

The man was such a closet millionaire, that one time he went to pay his bill at his regular coffee shop and found that someone else had paid for his meal... assuming he couldn't afford it based on appearances.

The point is, how did a man who lived so modestly turn into a multimillionaire?

First, he got started on the right path – and early.

He was self-taught. Close friends knew he religiously read the Wall Street Journal. (They still had no clue about his wealth.)

Then, importantly, the man stuck to a great plan... one which longtime Stansberry Research subscribers should be very familiar with.

He bought shares of high-quality businesses and held them for a long time, enjoyed the fruits of compound interest over decades, and didn't succumb to too much spending to "keep up with the Joneses," for example... Essentially, he always spent less than he made.

It's a concept anyone who read Thomas Stanley's classic book, The Millionaire Mind, surely understands. In the end, the man who didn't look like he had any money was richer than the fictional Joneses, or most families. As Doc wrote...

[He] owned stocks that paid big dividends and would often grow their annual payments. Think of stocks like Procter & Gamble (PG), Colgate-Palmolive (CL), and Johnson & Johnson (JNJ).

There is nothing sexy about these stocks. Their revenue growth won't wow you. But their brands are strong and have stood the test of time.

The formula for wealth isn't complicated. By living below his means, saving, and investing, [he] was able to turn a modest income into millions of dollars. But it takes discipline and patience.

Now, depending on your goals or your station in life today, this may or may not be the best approach for you... Maybe you're reading our publications because you're into day-trading and can't escape the rush of a quick win (or the pain of inevitable losses).

If you want to be a long-term investor, though, as Doc emphasized in his issue, there is no better way to do it than to think of buying stocks like you are truly owning shares of a business – because that is exactly what you are doing.

As longtime readers know, over time, thinking this way and acting accordingly can pay off exponentially. This multimillionaire former janitor is one example. Warren Buffett is another.

Both had one thing on their side to make their plans work... Time. It's the most valuable commodity of all.

It's never too early...

I (Corey McLaughlin) can't tell you how many times I've heard from various editors and analysts in this industry that they're in it because of a grandparent or family member who introduced them to the markets at a younger age...

From watching Grandpa scribble down stock tickers down on yellow legal pads while watching the evening news... to having Grandma buy some shares of the top stock of the day.

This is a common storyline. And it reflects an idea we've shared about the need for basic financial education in this country... which might help with the long list of problems that "We The People" in the largest economy in the world face today.

As we've said before, nobody is born with a full head of financial knowledge... But the same can also be said for science, math, or any other subjects.

We gain knowledge of those subjects through school. I was fortunate enough to have a rogue middle-school teacher show us the basics about investing. But even then, I mostly lost interest in the years following, to my own fault.

Today, more and more states (21 now) are requiring that students take at least one personal finance class to graduate high school... Finally! It's a good start, but there's also nothing like having a mentor to guide someone in the right direction at home...

This is where Doc and his research team's recommendation this month comes in...

The idea specifically comes from analyst Jeff Havenstein, who was struggling around Christmastime to find the "perfect gift" for his young nephew and niece.

Jeff did what many folks do around the holidays... He settled for getting a predictable option – a new set of Legos.

Upon reflection, though – and frustrated with buying toys that might rarely be touched by kids over the long run – Jeff decided to think differently the next time he needed to buy his nephew a gift. As Doc tells the story...

This year, [Jeff] vowed to get his nephew the perfect gift for his upcoming fifth birthday... and that led us to write today's Retirement Millionaire: the gift of financial freedom.

More to the point, Jeff did this by buying his nephew a small portfolio of stocks... It was a great gift right under his nose, which cost the same as a toy that might be forgotten in a few months.

Jeff bought stocks of companies that his nephew would mostly know, or likely know more about in the years ahead... and he picked businesses that have long track records but are still growing above the rate of economic growth, providing real returns to shareholders.

Over the long run, there is no better way to grow wealth through owning stocks than to buy high-quality, dividend-paying businesses that raise their yields over time and hold them for a long, long time. As Doc continued...

It works like this... Let's say you own a stock that pays a dividend. When the company gives you your first dividend payment, instead of using it to buy a new game or spend it on food, you buy more shares of the company's stock.

That's it. As simple as that sounds, it's an incredibly powerful tool when you put it to work.

Jeff's nephew likely doesn't fully understand the value of having a stock analyst for an uncle just yet... But he's already farther down a potential path to financial freedom than most other kids his age. More from Doc...

Many of us don't have multiple decades left in our investing careers. But your kids, your grandkids, your nieces, your nephews, or even your friends' children do.

A small investment gift today can set them up for the rest of their lives.

Over time, a few hundred dollars can turn into a few thousand... No less important, it will teach the young recipient of the portfolio about the power of saving and investing. There's no better education than watching a portfolio grow over time. It's the best gift you could ever give someone.

We agree... Aside from a guarantee of great health (which is impossible, though there are ways to better your odds), we've come to believe that the greatest gift you can give someone is that of financial knowledge.

We can't know what the future will bring, but we're willing to bet we would all be better off if everyone simply knew what many people don't – the rules of the money game and how it really works.

There are practical ways to give this 'gift'...

The first, according to Doc, is to just get started by opening a "custodial brokerage account."

This is a brokerage account that you can set up on behalf of a minor, and it can be used to invest in stocks, bonds, cash, and more. As Doc explained, the good news is a custodial account can be opened by anyone – parents, grandparents, siblings, aunts, or any other adults.

The funds become the minor's property immediately, but they can't access them until a certain age (usually 18 or 21, depending on the state).

Once the beneficiary takes control of the account, he or she can withdraw the money... Or even better, as Doc says, they can continue to hold the stocks in the account and let them grow.

The second step is to figure out how much total money you would want to gift, as well as how much you would want to devote to each holding, not unlike your own portfolio.

This could get pricey... Single shares of stocks like Amazon (AMZN) sell for more than $3,300 today. And even cheaper, potentially great long-term holdings like Visa (V), for example, still have expensive share prices. A single share of the credit-card giant costs more than $220 today.

The good news, though, is that you can buy "fractional" shares of companies nowadays – and do it fairly easy in many standard brokerage accounts.

By that, we mean you can gift half – or a third – of a company's stock instead of a full share... and the recipient will still enjoy the benefits of interest, maybe the most key concept to share with anyone.

We're not in the business of endorsing brokers, but Fidelity, Interactive Brokers, Charles Schwab, and Robinhood are among those that offer fractional trading, with minimum purchase requirements as low as $1.

Then, of course, you have to pick the stocks themselves...

You likely have your favorites already in mind. And Stansberry Alliance members can certainly head over to Doc's Retirement Millionaire portal to see them... or check out our Stansberry's Forever Portfolio for another good example.

Our Director of Research Austin Root just added another "forever" recommendation – a capital-efficient, world-recognized brand – just two weeks ago...

This stock almost perfectly fits the investment criteria for a "forever stock" that our founder Porter Stansberry laid out years ago, when he recommended chocolate maker Hershey (HSY)... And as regular readers know, Hershey is now one of our all-time-best picks.

In fact, they're so similar that Austin quoted Porter's original case for Hershey as he described this new opportunity in the latest issue of the Stansberry's Forever Portfolio...

This is a [relatively] slow-growth business. That, surely, will turn off most investors.

Most people simply don't understand the impact of even slow growth over time in businesses that are extremely capital efficient...

In almost every year, the company's dividends are larger than its capital expenditures. This company rewards shareholders, not its managers...

It's the impact of these reinvested dividends and the consistent decrease in shares outstanding that most investors do not figure into their future total return equation.

Similarly, Doc and his team identified five stocks that share the characteristics that they believe will stand the test of time – such as a powerful brand and distribution dominance in its industry. They also discussed how to spot which of these stocks are worth their high valuations today.

We can't give the tickers of Doc's five stocks away here. That wouldn't be fair to his paying subscribers or he and his research team. But we will say a few things about the stocks he identified...

One is a massive tech giant that still doesn't get enough credit for its footprint in today's world... Another is a global entertainment leader that has weathered the COVID-19 pandemic just fine... And a third is a "vilified" bank that generates an 11% return on equity.

As any kid who you teach will know, if you can earn 11% per year, you'll do really well over time. Do yourself and someone you care about a favor today... Pass your knowledge on. Show them everything you wanted to know at an earlier age.

Give Doc's Retirement Millionaire issue a read for the best guidance on how to do it. His April issue includes much more detail on custodial accounts, what to look for in long-term stocks, the magic of compound interest, and much, much more.

If you don't already subscribe...

In the spirit of today's essay, we've arranged the chance to give Doc's flagship newsletter a try for the next six months for just $29. It's a small price for perhaps the greatest gift you can give... It's even cheaper than a fancy box of Legos. Get started right here.

Bitcoin Could Destroy the Idea of Money

In yesterday's Digest, we gave you bitcoin bull Max Keiser's "pregame" take on tomorrow's bitcoin-versus-gold debate between billionaires Michael Saylor and Frank Giustra. Today, it's gold's turn to shine...

Best-selling author Jim Rickards recently joined our editor-at-large and debate moderator Daniela Cambone to weigh in on tomorrow's event. He explained why he prefers gold as "sound money"... why bitcoin could destroy the idea of money... and what arguments to expect from Saylor and Giustra when they go head-to-head tomorrow.

"Frank has history on his side and Michael will have price action on his side," Rickards says...

Click here to watch this entire video right now. And please make sure you don't miss the great bitcoin-versus-gold debate between Saylor and Giustra. It will go live tomorrow...

Enter your e-mail address at DanielaCambone.com so you don't miss a minute. You'll get instant access to this blockbuster event, which we're thrilled to be hosting. We hope you enjoy.

New 52-week highs (as of 4/19/21): American Homes 4 Rent (AMH), Axis Capital (AXS), AutoZone (AZO), CBRE Group (CBRE), Crown Castle (CCI), Comfort Systems USA (FIX), Alphabet (GOOGL), Invitation Homes (INVH), IQVIA (IQV), Ingersoll Rand (IR), LGI Homes (LGIH), 3M (MMM), Oshkosh (OSK), Rayonier (RYN), Seagate Technology (STX), Trane Technologies (TT), Westlake Chemical Partners (WLKP), W.R. Berkley (WRB), Health Care Select Sector SPDR Fund (XLV), and Zimmer Biomet (ZBH).

In today's mailbag, feedback on yesterday's Digest about tomorrow's big debate and thoughts on lithium batteries. Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"After filing my tax return for 2020, I think that there is one key feature that tilts in favor of gold: The IRS did not ask if I had invested in gold this year. I can only surmise that to have power over others is something our current crop of politicians covets.

"It's easy enough to see the stranglehold that the Chinese Communist Party has over their people by instituting their state-regulated cryptocurrency and enforcing a cashless society. I'm certain that the large banking cartel salivates at the idea of bringing this concept to the United States with the help of their obedient congressional dogs. How they must love the idea of a fake cryptocurrency to support a cashless society where any contribution to an organization that opposes them flags someone who must be destroyed. The protection against these budding dictators is personal, private networking through any of those organizations that the cancel culture is trying to silence.

"Geez, I just re-read what I have written. Pretty dismal outlook. But there is the question, right at the top of the 1040, 'Have you invested in any cryptocurrencies this year?' Here's to blockchaining our politicians and their masters, the banking cartel." – Paid-up subscriber Lucinda H.

"The IRS has regulations spelled out on the sale of gold, but, as far as I know, they haven't spelled out whether each use/sale of Bitcoin is a taxable transaction and whether companies that accept bitcoin are required to supply 1099s for every transaction. It would still be a store of value but doesn't seem to me that it can replace a currency until the tax regulations are spelled out. It appears that the IRS/government could be mean and nasty to prevent the use of bitcoin. Does this effect the debate?" – Paid-up subscriber Joseph P.

Corey McLaughlin comment: You've hit on a great point and one that we expect Michael Saylor and Frank Giustra to get into tomorrow. Again, be sure to sign up right here for free for instant access to this battle of the billionaires to make sure you don't miss a minute.

"Instead of bitcoin vs. gold, proponents of both should combine and replace fiat... and then decide which of the two is better." – Paid-up subscriber David B.

"Any chemistry student (including me) who has tossed a hunk of sodium or potassium into a pond knows the result. BOOM! Lithium is no different, just a little less reactive. Expose lithium to oxygen, and it burns. The problem is the fumes from the fire.

"Lithium hydroxide or oxide affects the nervous system in bad ways. The best thing to do is let it burn and run away. Dumping water on it just makes it worse. The only sure way to put out a lithium fire is with a nitrogen or argon fire extinguisher – but there aren't any available." – Paid-up subscriber Earl H.

McLaughlin comment: Thanks for the note, Earl... This gets me thinking, if Teslas take over the world, it seems to me that "lithium fire extinguishing" would be a good business opportunity, no?

All the best,

Corey McLaughlin
Baltimore, Maryland
April 20, 2021