How does one make money on what they are saving? One way is to invest it in the stock market in companies and funds of your choosing. On my Stock Picks page, you'll find a selection of companies and the dates that I recommended buying them. About once a quarter, I will report on the aggregate performance of the stocks I have picked thus far. The specific reasons for recommending each company can be found under the Stock Picks page. In general, I believe these are good long-term companies and were at reasonably appealing share prices at the time of my recommendation. If you evaluated your risk tolerance and determined that specific publicly-traded companies are within your tolerence, adding these companies to your portfolio will hopefully give you a good chance of building your wealth through both capital appreciation and dividends being paid.
For those new to investing in the stock market, capital appreciation is the change in the market value of a particular stock, which is a part holding of a company. Dividends are typically monthly or quarterly payments that are arranged by the company to all shareholders (entities or people who own the stock) at regular intervals. These dividends come from the continued successful operation of the company and reward shareholders for owning part of the company. I am an advocate for owning good companies that represent successful, stable businesses and thus allow dividends to be paid out.
So far, I have recommended just a handful of companies for purchase earlier in the summer. Living in Canada, I'm sure you are wishing that you could turn the clock back a few months to enjoy the long days and warm sun that we don't see as much of these days. And here I am, giving you one more reason to wish you could turn back the clock. As you can see in the above table, all of the companies I recommended are up and if you had bought an equal amount of each company, your average return for the quarter up to today would be almost 10% if you include the dividends paid out!
Now, for me to say this is typical performance of a stock market would be absurd, as the particular run for these companies between these dates was especially good. Typical annual performance for the stock market is only around 7-8% per year, so to get more than that within just one quarter is rare. But I think the idea that buying good companies at fair prices is well illustrated by the performance above.