How To Build Your Own Mini Berkshire Empire + MORE Jun 7th

For today’s post, I thought it would be interesting to crunch some numbers…
Your Mortgage
Owing $250,000, at 3% interest over a 5-year term, amortized over 25 years, making bi-weekly payments and you’ll pay over $90,000 in interest costs over the amortization period.
The lesson:  even a cheap mortgage rate will cost you BIG bucks over time.   Get a good mortgage rate and make lump sum payments on your mortgage when you can to significantly reduce your borrowing costs.
Your Credit Cards
Owing $10,000 on a credit card, paying 18% interest, paying just the monthly minimum:  you’ll pay almost as much in interest as the original balance.  It will take you around 22 years to pay off this debt.
The lesson:  credit cards are great for temporary credit, getting cash-back or travel rewards in the process.  Credit cards could cost you a bundle if you don’t pay off the balance in full by the due date, always.
Your Mutual Funds
Investing in your average Canadian equity fund at ~2% management expense fee, putting down $10,000 initially and keeping that money invested for the next 20 years:  should earn close to $24,000 (based on historical returns of about 6…

Every year, I read the annual Berkshire Hathaway shareholders letter, written by Warren Buffett. I highly recommend that anyone interested in the markets take the time read it. It’s an interesting long term perspective that we rarely see. Why would someone want to build a mini-Berkshire? I guess having a fund that grows steadily over time, that outperforms stock indexes such as the S&P500 would help me tremendously in my passive income objectives.
What I Do Not Want From My Mini Berkshire
Two main things that I would not look to replicate:
-Having shareholders: Buffett and Berkshire have shareholders that they invest for and while using other people’s money is a great way to get bigger, it’s not something I’d look to do at this point.
-Paying Dividends: While Berkshire does not pay out dividends to shareholders, I do expect to depend on income from my investment fund at some point and would thus need to rely on some income at a certain point.
Similarities Between My Mini-Berkshire And The “Real” Thing
Positive cash flow: Berkshire gets very important cash flows from its insurance businesses that generate cash flows…

Dividend investing is a huge part of my investment strategy. As I’ve mentioned in my now monthly passive income updates, receiving dividend income from my both my Ultimate Sustainable Dividend portfolio and my ETF portfolio is a primary driver of how my retirement will be like a few decades from now:)
Today I’m looking at the top S&P500 dividend stocks. Why? It remains much easier and less risky to go for bigger cap stocks that have more history.
Find Out More
In the next few days, I’ll be doing some research on some of these names. As you can probably tell, most of the top names here are paying much more than they can afford. I typically stay away from such stocks which means Pepco Holdings (POM), Lorillard inc (LO) and Garmin (GRMN) in particular. You can join our free mailing list if you’d like more thoughts on those names.

In the meantime, here is the list!

TickerNamePriceDividend YieldPayout RatioEx-Date

WINWindstream Corp8.0312.45356…

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Program replaces the current $15-billion (U.S.) share repurchase program begun in 2011