Money makes Money? Yes!

King Felix just signed a 7 years $175 Million contract with the Seattle Mariners.  That is $25 Million a year for 7 years guaranteed.  With so many high profile sports athletes going bankrupt you think there be someone there in the beginning to help them out.  I would love to help them, but I think there are so many people pulling them in so many directions asking for this and that, that it is hard for them to say no.  It’s hard for them to turn down certain people that helped them so much along the way if they ask for something monetarily.  For a young man or woman to be used to making a paycheck of maybe $800-$1,000 every two weeks and now makes about $300,000 a paycheck things will change. 

I understand that you want the cars, you want the bling-bling and you want the houses.  Lets use Felix Hernandez as an example.  He will get about $15 Million clean (after all taxes).  Five of that fifteen will go to buying a house, buying a few cars and traveling naturally.  What about saving money?  If you were to tell Felix that you could guarantee him about $500,000 a year just off dividends would he believe you?  Well, he would have to after he read this. 

Consider this:

Philip Morris (PM) has a dividend of $3.40 a year

Altria (MO) has a dividend of $1.76 a year

Kimberly-Clark (KMB) has a dividend of $2.96 a year

Clorox (CLX) has a dividend of $2.56 a year

Pfizer (PFE) has a dividend of $.96 a year

A dividend is a cash payment on the shares that you own.  Lets consider that Felix puts $2,000,000 in each holding after he spends the $5 million on necessities. 

PM—25,000 shares----$85,000 guaranteed

MO---66,666 shares----$117,332 guaranteed

KMB—25,000 shares----$74,000 guaranteed

CLX----28,571 shares----$73.141 guaranteed

PFE----90,090 shares----$87,272 guaranteed

Regardless of what the stock price does the dividend does not ever change.  All of these companies have seen about a 30% advance on top of the dividend as well.  Felix is guaranteed $436,745 a year no matter what.  That is a nice sum of money for doing absolutely nothing besides putting your money in the right place.  Why do they not know this?  Why don’t they get the help they deserve?  It’s simple really.  Invest in great companies that have been around forever and will be around long after our grand kids.