Over the past couple years, I have spent some time reading books by Derek Foster. The acclaimed ‘retiree’ claimed to have made himself known by retiring at the age of 34. Contrary to your ordinary millionaire, he explains that he lives a frugal yet comfortable lifestyle. Nothing extraordinary and a simple outlook.

For many, it’s hard to put aside money for investing. What Foster suggests is putting aside $200 / month every month to get started. $200 x 12 = 2,400 / year and by 4 years, that adds up to approx 10,000, which should be plenty to get started.

In Foster’s book “The Lazy Investor”, his main piece of advice is to invest in companies that offer DRiPs. DRiPs or Dividend Re-investment Plans are dividends that are automatically used to rebuy additional shares within a company. For example, if you have 100 shares and a company pays $0.10 in dividends, you would typically be paid $10 on a quarterly basis. Instead of being issued a cheque for $10, the company would purchase $10 worth of its own shares with the dividends.

The strategy is relatively straight-forward: invest in recession-proof companies. Foster suggests that an indicator for a “good investment” is to look for companies that have historical increased dividends. This is a good indicator for companies with potential growth (attractive investments).

I must admit that the advice from his book has been beneficial thus far. Although my investments are currently associated with my workplace, the tips from his book hold true with my current holdings. As the adage goes: buy low, sell high.

Please note that during the recession, Foster had sold all of his investments due to panic. This is a common trait with investors who try to mitigate their losses.

The important thing to note is that there is always a rebound. Hold and never sell. Warren Buffett is a great example of this. Buy when people are panicking (cheap stocks); never sell.