“Zero Commitment”: This Is The Successful Investment Method For Millionaires Who Prefer Beer Over Stocks

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jim cook

Jim Koch bought his first stock at age 12. Now, at age 74, she outsources chores to her family’s nanny.

Billionaire Jim Koch aims to invest in the stock market without paying much attention to it. founder of the Boston Beer Company, 74, He’d rather spend his days experimenting with beer than tracking down the displays in the markets,

I don’t think it has any chance of beating professional investors says the coach. My kids say, ‘Well, shouldn’t we invest in…?’ To which I reply, ‘No. You have to remember, if you are buying a stock, there is someone on the other side of the transaction who is selling that stock. And chances are they have more information and better information than you.

Rather than deliberate about the market, Koch prefers random diversification and “zero commitment”. Trading of its shares is not done by him or any professional broker, but for his wife’s longtime assistant, whom the couple had hired as a babysitter 20 years earlier when she was in college. Every two weeks, it takes losses and arbitrarily selects a new individual stock from a predetermined list of indices that includes the S&P 500 and the Russell 2000.

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Koch says this strategy has outperformed most actively managed portfolios and requires less work. I don’t want to worry about it, he explains. “It’s boring. It’s annoying”, His time is better spent running the $2.1 billion (2022 revenue) business he founded in 1984. The Harvard graduate quit his consulting job and began brewing in his kitchen that year, using his great-grandfather’s recipe from 1870. , Thanks to cost-cutting measures such as the use of pay phones instead of an office line and aggressive marketing of their hand-held beers throughout Boston, Koch’s Boston Beer was profitable in its first year.

Brewer’s “crafty” days began several decades before he became addicted to alcohol at age 30. He delivered newspapers as a child and grew up in Cincinnati, saving his money and buying his first public stock around age 12. Koch buys two shares of P&G to a broker who, according to him, charged him an “outrageous” commission. He never sold them: I’m going to give them to my grandson. He still has the broker’s receipt.

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Those shares cost him about $140, equivalent to about $1,400 today, and have since been split into 128 shares with a combined value of $20,000, more than 14 times the original investment value. (He also reinvested all the dividends.) For comparison, adjusted for inflation, the S&P 500 has risen eightfold since 1962.,

Such big wins belie the fact that it has not been Koch’s goal to grow his wealth through the stock market. Instead, he says he aims to use the securities to maintain his fortune. You make money by focusing on your risk, He explains that you play it safe by diversifying your risk and also says that he buys it through Boston Beer. It seems to have worked out well: Forbes estimates Coach is currently worth $1.6 billion.

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