Finance

A Hoarders Last Lesson

I didn’t know Jerome very well, in fact, I didn’t even know his last name until I read his obituary.

We would see him driving his tan Cadillac by the house frequently, coming and going from the house across ours at the end of the keyhole street. Our most frequent interactions were with him at one of our many summer garage sales throughout the years. He would always chat us up, buy a smattering of things we no longer needed and trundle them back to his house.

He was a bit eccentric, but very kind. The last I ever saw of him he was painting a small, dead tree white and hanging big plastic ornaments on it and waving to the neighbor children playing nearby.

The lat conversation I had with him was about him having myself replace his garage door opener for him, but as he put it “I’ll need to get some stuff out of the garage before that can happen.”

You see, Jerome couldn’t park inside the garage, because it was packed full of STUFF, from floor to ceiling! That and how he always bough armfuls of our garage sale items led me to believe he might be a hoarder. Boy, was I ever right!

One evening I backed into my spot and noticed a big blue dumpster in his driveway. A few days later it was full to the brim, and I thought “Huh, Jerome must be cleaning some things out.”

A few days later, another dumpster that was consequently filled in the ensuing week or so. Curiosity got the best of me and I took a walk by, and it was just full of old lawn chairs, garbage bags, broken furniture….. just STUFF!

When I noticed his car was missing, I added it all up and figured he had passed.

Suspicions were confirmed via Google, that Jerome, a widower since 1999, aged 82, was no more.

A month later an estate sale followed, and we watched dozens of people walking away with many of his belongings. I have to imagine that some of our garage sale items were also now the property of someone else, yet again.

So, why am I telling you this story? It’s because of the epiphany I had looking at this dumpster in his driveway full of worthless belongings. But, not just any dumpster…

A Republic Services (NYSE:RSG) Dumpster.

That’s right, I immediately correlated how unfortunate it was that Jerome had spent so much money on things that eventually had no use to anyone, and were now headed towards their final destination at the landfill.

And Republic Services will be transporting those belongings, for a fee, which will eventually be passed along to shareholders, in the form of a dividend. And not only will those shares continue to pay dividends, but when we meet our eventual demise, we can pass those shares down to those we designate as beneficiaries.

I am a dividend growth investor, and Jerome was able to posthumously teach me one last lesson. That investing in quality profitable companies will indeed provide dividends not just for us, but for those we leave behind.

As dividend growth investors, we are creating wealth and financial security for generations to come.

For what it’s worth, I am not an investor in Republic Services, but it has been on my watch list. It is currently at a P/E ratio of 25.34 and has a 5 year average of 25.12, ever so slightly overvalued.

The starting dividend yield is 1.89%, pays an annual dividend of $1.62/share, has raised the dividend for 10 consecutive years and only has a 23.36% FCF payout ratio.

The moral of this story is that if you are going to hoard something, try to make sure it will have value to someone other than you after you meet your demise. Precious metals, real estate, stocks or bonds, these are all instruments build and pass on wealth.

I choose dividend growth stocks, that pay me dividends now, and if everything goes according to plan, pay dividends to those I leave behind.

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2 Comments

  1. Great story Russ! I’m enjoying your tips. Very impressed with your blog! I’m slowly getting to read some of them in my spare time. Love the name Dapper Dividends! I’ll contact you if I have any questions!

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