Today, yet another company popular in many people’s eyes made the IPO debut on the stock market: Twitter trading under the symbol TWTR.
This is the perfect opportunity to lay out the reasons I’m NOT investing in it.
- Twitter is a seven year old company, and has yet to turn a profit.
- Companies with no profit aren’t places to turn to, looking for dividend payouts
- They have no history of growing their stock price…because they just started trading.
My wealth building plan is based on strong cash building opportunities. That is where my rental property comes into play. While it’s boring to only get a monthly report on people paying rent, it has gone off without a hitch yet again. A little money moved into my real estate check book, and in three days, a smaller portion of it will flow out to pay off the banks that have empowered me to buy this property.
I got my monthly dividend from Vanguard Natural Resources, despite an overall lack of exciting news and bell ringing on the stock market. I scheduled an electronic payment of that money to help knock out my HELOC a little bit more.
A couple weeks ago, another chunk of money was routed into my EIUL where my total principal value continues to rise, and will not decline in value.
None of this is fancy, but it’s working great. These investments have proven themselves to yield cash and grow over time. Twitter has proven nothing. It might be hot right now, but IPOs aren’t the place where wealthy people make lots of money. The people that make a real killing are the ones that get a chunk of equity from the company. For example, if you are an employee and have been issued options at $2/share (which is totally made up), you stand to make good money. But if you are a first time buyer, the opening price was around $45/share. Big difference.
So, in a nutshell, I’m not diving into Twitter. If you want to, make sure you are doing because you have a solid reason, NOT because you are emotionally connected to the buzz.
For the record, I am fanatical Twitter user. I buy paid Twitter client apps (tweetbot) on all my devices and chat all the time. It doesn’t make me a Twitter investor.
Happy wealth building!