Own Businesses That Drown You In Cash

Charlie Munger told the story of a friend of his that was engaged in the farm equipment business. Each year, after working hard and running his operation, he’d look out in the yard at the equipment that had been traded in or was awaiting sale and lament, “there’s my profit sitting out there.” What you want, Charlie explained, is the type of business that you can take money out in the form of cash dividends without it hurting the competitive position of the enterprise. Warren Buffett then chimed in that you want the type of company that’s going to send you a check every month.