“Early Wal-tirement: How to get in from the Very Beginning. “

Sniffing out the teased picks from the 12% Letter's "Wal-tirement" ad

By Travis Johnson, Stock Gumshoe, November 28, 2011

Time with family and bloated turkey-filled bellies did nothing to slow down the avalanche of newsletter teaser ads — heck, we even saw plenty of “black Friday” deals for all those folks who are hoping to stuff a newsletter subscription into little Timmy’s Christmas stocking (yay!)

But perhaps the most popular one that’s been sent my way over the last few days is the pitch from Dan Ferris for his 12% Letter over at Stansberry & Associates — like many such ads for this service that we’ve seen over the years, the basic pitch is a simple one that’s wrapped in an odd made-up name … and, to keep your friendly neighborhood Gumshoe interested, they also pitch a way to get in early on some wealth building excitement.

The made-up name is “Wal-tirement” — they’re teasing us that Wal-Mart effectively took over the retirement planning business the same way they took over groceries, prescription drugs, tiny plastic useless toys from China, etc. Here’s how Ferris puts it:


“How the ‘King of Retail’ could help pay for your retirement

“After years of revolutionizing the retail business in America—

“The undisputed ‘King of Retail’ is now involved in another part of the U.S. economy…

“Helping to save your retirement.

“You read that right. In a move that is shaking the very foundations of conventional retirement wisdom, the retail giant is offering a program that, for many retirees, could actually replace Social Security, 401(k)s, IRAs, pension plans, and the like.

“Dubbed ‘Wal-tirement’ by our analysts, this program is completely separate from the government and has nothing to do with the ups and downs of Wall Street, but it’s got an unbelievable track record.

“You see, the incredible thing about ‘Wal-tirement’ is that the payouts have ALWAYS GONE UP—every single year. No matter what.”

And as usual, there are plenty of impressive looking charts — the steadily increasing payouts of “Wal-tirement” compared to the very unsteady performance of the S&P 500.

Not only that, but we have our suspicions confirmed: there really is a secret way of making money that Wall Street doesn’t want us to know about! Just as we thought! Here’s how Ferris puts it:

“… the mainstream financial community is beginning to take notice…

“MSN Money says this is ‘replacing the government as the gold standard for low-risk investing’ and a Certified Financial Planner recently wrote, ‘it scores a perfect 10 on the factors that are important to retirement investors.’

“In fact, Wall Street is so afraid of this program, they have convinced the government to make it illegal to be advertised to the general public. But there’s absolutely nothing illegal about me showing you how it works.”

Ah … so, yes, you guessed it, this is yet another teaser for DRIP investing — Dividend ReInvestment Plans (DRIPs) are, in this case, plans in which companies sell stock to investors directly (instead of through a broker) and allow you to reinvest your dividends into new stock directly as well. Sometimes they even give you a slight discount on reinvesting your dividends, which is nice, but basically these are pitched as a way to set up regular investments (many of them offer plans where you automatically invest $50 a month or something like that) and let you slowly compound a nice nest egg.

Of course, in many ways these plans are an anachronism — a good deal back when there weren’t easy online brokerage accounts that allowed you to reinvest your dividends for free, and when many full-service brokers charged commissions that were several times higher than the more competitive fees most people pay now. Not that there’s anything wrong with DRIP investing now, it’s just not necessarily hugely different from your regular Etrade or Ameritrade brokerage account that offers free dividend reinvestment. Most DRIP plans are offered not really direct through companies, but through the clearing houses on the companies’ behalf — companies like American Stock Transfer and Computer