Has the pandemic caused you to fear investing? Freaked out about the volatile stock market in the face of so much uncertainty? Looking for a calm in the storm – a sign that things might actually be coming out of all of this?
Things seem so uncertain right now. A worldwide pandemic, an upcoming US election, rising US-China tensions, and global debt spiraling out of control.
It seems terrible.
But that’s only when you zoom in on the very near term. Over the long haul, humanity makes tremendous strides forward. Life has improved dramatically over just the last 100 years. And that improvement tends to compound, making the next 100 years exciting.
Our ability to innovate is invaluable. And I believe it’s that ability – the ability to innovate – that will actually come to make this pandemic a blessing in disguise.
I’ve used investing to go from below broke at age 27 to financially free at 33. Even now, I have hundreds of thousands of dollars in stocks. Yet I’m not concerned at all.
In fact, I think many companies will emerge from all of these issues over the next few years. There’s one huge innovation that I believe is going to start rapidly accelerating, and it’s going to significantly improve profitability for many businesses all over the world. And more profit leads to more dividends… for shareholders just like us. Let me tell you about an innovation that you could end up hugely profiting from.
One of the biggest costs for most companies goes almost totally unnoticed by investors. That cost is labor. Labor is often a cost for most companies. And it’s not just the wages I’m talking about, either. It’s the benefits, the managing of human resources, time away from work, incentivizing the proper
behavior, etc.
However, this pandemic has showed a lot of companies just how fickle that labor can be.
Want to know what’s not fickle? Robots. Robots aren’t fickle. Robots are nearly 100% reliable.
They don’t get sick or tired, and they don’t eat.
The innovation I’m talking about here comes down to automation. The acceleration of labor automation could lead to a increase in profits for global businesses with large workforces. That’s more profit to reinvest back into the business, grow, and increase those juicy dividends that we investors enjoy and sometimes even live off of. Automation was coming on strong.
I’ll give you a very clear example of this. When you go into a McDonald’s restaurant, you might have noticed those neat little kiosks. They allow you to interact with a slick tech interface, where you can order your food, pay for your meal, and almost totally avoid any human contact at all.
That’s automation. That’s, essentially, a robot taking your order, accepting payment, and managing your order. It’s shifted delegation from a human to a computer. And this is something that’s only going to be more attractive for companies big and small moving forward.
This pandemic has caused all kinds of issues with supply chains, manufacturing, and making sure things get done. But automation solves that. And it saves a ton of money over the long run, to boot.
This was our future. Automation was coming. A lot of low-income jobs with repetitive tasks will almost certainly not exist in 20 years. A cashier is a perfect example. But I think this future is going to come even sooner now. This innovation is going to accelerate as a result of the pandemic.
And that makes all kinds of stocks even more valuable. After all, any business is ultimately worth the sum of all future cash flow it can provide, discounted back to today. If the sum of that cash flow is dramatically increased by virtue of less cash going out the door on labor costs, then those businesses are suddenly worth a heck of a lot more.
That’s cash flow, valuable businesses, and dividends. So when you think about all of the crazy stuff that’s going on right now, just remember that there’s always a silver lining. A more rapid uptake of automation would certainly be a boon to investors.
I have hundreds of thousands of dollars wrapped up in stocks. I actually live off of the dividend income my portfolio provides. But I’m simply not concerned. I’m still buying stocks. And I find a lot of stocks even more appealing today than I did six months ago, because the prices have come down those future cash flows might actually be much higher.
Paying less for more cash flow? Yes, please!
As for which stocks to possibly buy, make sure to follow our channel.
We’re regularly putting out videos on high-quality dividend growth stocks to consider. Of course, there’s also my own personal portfolio, which you can also take a look at.
— Jason Fieber
P.S. This six-figure portfolio, which I call the FIRE Fund, generates enough passive dividend income for me to live off of. It allowed me to retire in my early 30s. I’ve made my portfolio entirely accessible over at Patreon – and I post alerts there whenever I buy or sell a stock.
I put my money where my mouth is and am often invested in the same high-quality dividend growth stocks that I make videos on. Over the years, I’ve heard from thousands of investors who have been profiting from many of the same exact stocks I own. So if this sounds like something you think you could benefit from as well, check out this link to see my portfolio and start getting my buy and sell alerts.