McDonald's Buffett
A Summer Financial Dispatch
I have been eating McDonald’s every day this week. I know, but before you delete my Substack forever, allow me to explain: I spent the wee hours last weekend watching Warren Buffett documentaries to gear myself up for some additional investing. Warren eats Mcdonald’s every day. As a large shareholder in the fast food conglomerate, he orders meat on his sandwich if the market is up and goes without it if the market is down. Even as a billionaire many times over, he doesn’t like to lose money. So, in the spirt of expanding my portfolio, I decided to Be Like Buffet. So far I have has three Egg McMuffins, a large fry and two double cheeseburgers. I won’t go into the details of downloading the McDonald’s App and buying this food for pennies on the dollar. The most important thing is that this paved the way for my investing in index funds via my own brokerage account.
The S&P 500 is one of the index funds in which Buffet invests. Since it’s inception in 1957, to has had an average annual rate of return of 10%. That far surpasses the average market return for retirement accounts which rests at a more modest 5-8%. So if I buy 17 shares a year and hold it for 20 years my investment grows to $294,961.68 by the time I want retire at age 70.
My strategy is simple, I slide $150 a week into my Amex High-Interest Savings account until I can afford one share of the S&P 500 index fund. It takes me about three weeks to afford a share, so then I transfer the money back to my checking account and buy a share in my JP Morgan Chase brokerage account. Buffett also recommends dollar cost averaging into index funds so I’m following his plan.
I understand that finance talk buttressed by greasy fast food is not what you expected from me. As you know, I do have a diverse portfolio and I constantly monitor its progress. I will retire with enough money to live comfortably and the S&P 500 is another way I’m going to get there, one cheeseburger at a time.
Thank you for reading, please drive through.