How To Get Rich From Pennies

in #money3 years ago (edited)


I pick up any coins I come across. In a parking lot. On the sidewalk. At a park. The floor of the grocery checkout. My eye has become accustomed to searching for coins or other interesting items on my path. I search out these opportunities.

One of my hobbies is metal detecting, and besides trash (which I carry to the trash can) I mainly find coins. Pennies, nickels, dimes, quarters – even a Sacagawea dollar coin once – but mainly lots and lots of pennies. You guys in Europe or the UK have it good with your large denomination coins, not to mention centuries of history to dig up. But I digress, it is not about the physical coins it is about what this money represents.

There is a story about how Warren Buffett, the best investor of the 20th century, was riding an elevator up to his office and on the floor was a penny. He was not alone, there were several executives in the lift as well, but none took notice of the shiny penny. When the doors of the elevator opened, Buffett leaned over and picked up the penny to the shock of the executives. As he left, without turning around he held the penny up over his shoulder and said “The beginning of the next billion.”

The world’s most successful investor saw the potential value of the FUTURE of that money. He understands what that money could become. The same goes for spending money, how much future wealth are you giving up for the thing you buy today?

I love getting dividends. I believe they are the ultimate form of passive income. One of my favorite stocks is Omega Healthcare Investors (OHI). The last time they paid me the quarterly dividend, I received 61 cents/share.

That’s pretty much 20 cents a month, less than a penny a day.

Some people would think “What’s the point of that?”

Let me tell you another Warren Buffett story. Years ago in an interview he stated that Coca-Cola (which his company owns very many shares of) sell about 1.8 billion units per day. If they could get just one more penny per unit it would equal $18 million dollars a day. Over a year that comes out to $6,570,000,000!

From just one penny more.

You know what OHI has been doing for the last 6 years, they have increased the dividend by a penny per quarter and occasionally two cents. It means that the dividend per quarter has increased from 36 cents in 2010 to the 61 cents of last quarter. Next time they schedule the dividend they will probably pay out 62 cents/share. A 1.6% raise!

Do you get a 1.6% raise every three months at your job? I don't. Would you like that? I would!

Still, 61 cents every three months will not change your life. Luckily, you can acquire multiple shares and combine those pennies.

Currently, for a little over $3000 you can own 100 shares of OHI and that, if the trend continues, should bring you $254 in dividends next year, $270 in 2018, and $286 in 2019. Money you didn’t have to work for at all!

For huge wealth in the future, re-invest those dividends into more shares to obtain even more in 3 months.

Those few pennies here and there are sure adding up, aren’t they?

And that $254 from OHI ends up equaling about 1% of my annual expenditures. In other words, I bought 1% of my financial freedom for $3,000! While the dividend increases could slow down in the future, they should at least keep pace with inflation ensuring that my buying power remains.

It is not pennies that are hitting my account, they are tiny freedom drops. Each buys me a little more time.

This is the same for all my other dividend paying stocks. I don’t see the pennies, I see the future they will provide where I have the income to pursue what really matters to me instead of having to spend hours of my life working for someone else. The pennies are the bricks in the wall to keep any troubles of life at bay.

Pennies are powerful and will make you rich. You just have to see them for what they really are.

So keep your eyes open for them, and grab any that you can. Plus, one time I found a gold ring in the parking lot. That was nice.


Pictures: Pixabay 1 2


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i would recommend looking in places where change tends to collect.

metal detecting at parks, where the swings reach the furthest back. people swing up, the change comes out of their pockets.

one thing i always do is check the refusal tray of the coinstar machine at the grocery store. people are excited to get their money and forget to check the tray. sometimes it will refuse normal coins for seemingly no reason. it also refuses foreign coins. the best part is, pre 1965 silver coins are a different weight, so the machine invariably spits them out too. free silver is free silver.

just last week i found $4 in silver, and over $1 in normal coins. i've made it a habit to check on the way in and the way out. finding a 1963 quarter and a 1958 dime at once was like Christmas.

You found some great scores there! I must check those coinstars after you or something because there is never anything in there when I look.

Now turn those finds into long term wealth so you can buy your future time back!

sometimes i go months without finding anything. keep checking, don't give up.

I won't! I need more freedom and the pennies help me towards that. :D

In the meantime, I occasionally dump handfuls of pennies into the parking lot when my change bin overflows (not the silver tho).

When I had money in the market, I had my best success with undervalued (fundamentals) stocks that a) had dividends and b) traded options:
One of my best was Ruger. I sold Sell options that nobody ever followed up on, collected the dividends, and watched the stock hover undervalue for two years. I made about 20% a year from Ruger trading.

Hell, if all my trading would have been that great, I would have never tried to run a biz!

Let me tell you a secret. There are people getting more than 20% ROI easily.

They bought excellent companies decades ago and the yearly dividend has increased to more than their purchase price! Buy solid dividend growing companies and this could be you in the future.

Anyways, those pennies you throw away are months of dividends. Or probably years of bank interest currently.

Another home run article, my bro! So there's hope for the buskers yet!! :)

Haha! Maybe they work at a London bank and they are on the street playing as a side gig?

What a fun idea! If only we still had pennies in Canada.....no pennies anymore. All gone. I don't know if the ones left over are worth anything, although I have seen a lot of crafters using them for interesting projects. Maybe I'll collect loonies...I always find those on the ground. :)

You would have to be 'loony' to pass up any dollar coins!

oh, it's way too late for that!!!

This is a great post, I really like dividend paying securities. I actually prefer dividends to increases in share price. Maybe I am weird.

Some people want only share price increases and they plan to sell shares as needed. To me that's like cutting down your trees. If you have dividend stocks, they are like fruit trees. Every year they give you a little back from their fruits, and you still have the tree!

As for you being weird or not, I am in no position to say ;P

About 10 years ago I was doing my grocery shopping in a store called Stop & Shop. I needed to use the bathroom really badly, so I found out where it was and proceeded to enter and walk up to a urinal.

I didn't notice it at first, but sitting right on top of the urinal directly underneath the metal flush handle was what looked like a $100 bill folded in half, and then half again.

I immediately thought it was one of those fake $100 bills that people use as a gag. They throw them on the floor or ground and then watch as people excitedly pick them up, only to get angry when they discover they've been had.

Still, I thought, what do I have to lose? As soon as I finished my business, I grabbed the bill and unfolded it, only to find that it was actually TWO REAL $100 BILLS! Guess who got FREE groceries for two weeks?

I guess the moral of the story is to pick up any money you see, whether it be a $100 bill or a penny, it's money that you didn't have before.

So, let me ask you all a question. How many of you would have brought the money to the customer service desk or lost & found and turned it in?

Stop & Shop was a supermarket I visited regularly as a kid, never found any money though. Heck, I don't think I have found any folding money higher than $5 before! I wouldn't have turned it in without any way to identify who lost it.

That was the most money I ever found in my entire life. Actually, that's not true. It's the most I ever found that I kept. Some years back I found a wallet on the ground right outside the door of a Blockbuster video store. I opened the wallet and there was $267 inside, mostly $20 bills. I was really excited about that until I took a look at the guy's ID and saw that he was a priest. Bummer!

It's a little different when you find just a wad of money and there is nobody around, but when you know who the money belongs to, and on top of that it's a priest, then that's where I have to draw the line. I was able to track him down and return his wallet, cash intact. He wanted to give me a $20 reward, but I told him to say a prayer for me instead and we'll call it even :)

As far as the money I found in the bathroom, I think what must have happened is the guy probably had the money in his hands and put it down to flush and he must have been in a huge hurry and just walked away and left it there.

Either that or I was part of some study where they wanted to see how many people would turn the money in and how many would pocket it. Seems like they would have used a much lower amount of money for something of that nature, though. I didn't really think about it at the time because I was actually struggling financially and I was just really grateful I found the money and there was nobody around that tried to claim it.

Other than those two instances, the most money I've ever found is a $10 bill in the parking lot of a CVS. I also found a $5 bill underneath the seat of a public bus once. I guess I've found more money than most. Once I saw a news story about a guy who left an envelope containing $6000 on the roof of his car and then drove away. A guy who was sitting in the parking lot saw the whole thing and got the guys license plate and turned the money in to the local police and they contacted the guy and gave it back to him. Now that's what I call an honest person. Can you imagine finding $6000 free and clear and returning it? Turns out it was tuition money for the guy to send his daughter to some technical school.

Heck, those are some stories. I've been on the losing side.

When I lived in Hawaii I would metal detect along Waikiki beach. One morning a guy came up to me and said that he lost his wedding ring, I ask him to show me whereabouts it dropped. spent a few hours searching and found it! I went up to his hotel room and they gave me a $100 reward. I didn't want to put it in my wet pouch, so I placed it under my baseball cap. Well, when I got back to my car I took my cap off and no $100 bill! Oh well, guess it fell out somewhere along the way.

You always hear about the stories about someone returning large sums of cash, but I imagine they are the exception - not the rule. All I know is that if I had thousands on me, then I am holding that much money tight to my body.

Good post. Even a mere penny grow a lot if you tap into the power of compound interest.

Its such a powerful force, you want it to be working for you.

You are one of the few penny wise people left.
In Singapore, we have even stop minting the 1 cent.

Sad times, there is a war against cash on both ends.

If you find older pennies; the ones that are mostly copper, the melt value is about 3 cents.

Correct, 1981 or earlier are copper. 1982 is the year that they switched to zinc, so take a closer look to distinguish those ones.

It's interesting how scarce some coins become when the metal content changes. In the 1980s (and likely well before) you almost never found a pre 1965 quarter or dime because those were primarily silver and worth significantly more than face value. Yet today, even though a 1965 quarter is more than 50 years old they are still very common. If you pay attention, you'll notice that pre 1982 pennies are becoming more scarce. Nowhere near as scarce a silver but still harder to find then they were a few years ago...

Good observations, things I'd like my grandchildren to contemplate.

I hope to be sharing some musings on pennies in a few days, and will try to remember to link back to this post!😄😇😄

@creatr

I look forward to hearing said musings :D

Great point but I also pick up most change I find as well. It does add up quicker than people realize. As for stocks that is something I will look into thank you for the idea.

Dividend stocks are how you make your pennies pay you pennies forever! (possibly)

Do you know of an easy way to find the dividend stocks.

Well, if you have an account for buying stocks most of those have tools in the website to filter stocks to your parameters. If you don't have a stock brokerage account, I recommend Scottrade for IRA's and Robinhood for brokerage.

The difference is that you can only put $5,500 a year in an IRA - but there is no tax while it is in there, but you can't take it out until you are 59 1/2. Scottrade charges about $7 to buy or sell.

A brokerage account is one you can buy or sell and take money in and out all you want - but you will have to pay taxes on any gains and dividends you get. Robinhood is good for this because they do not charge any fee!

Your simple question is actually difficult to answer because you need to map out your goals. But here is a good article to read to get started. Money and your future are very important things and should be taken very seriously. http://www.marketwatch.com/story/how-to-pick-the-best-dividend-paying-stocks-2013-05-02

Loved this post. My dad never passed by a penny lying on the ground without stopping and picking it up. “For good luck”, he used to say. And now I do the same. It all adds up in the end. “Every penny counts!” ;)

Yes it does, put all your coins in a jar and at the end of the year you probably have a very good amount! Enough to buy some investments that will hopefully give you a jar full of coins years down the road. :D