Tom James had a knack for making money.

At 15, he had gotten interested in coin collecting. But rather than building a collection, he began trading coins.

He even convinced his father to cosign a $5,000 loan. In just three short months, he made $10,000 and repaid the loan.

After college, Tom joined the company his father started. Four years later, he became CEO.

Over the next four decades, Tom grew Raymond James (RJF) into one of America’s largest financial services companies.

If you’d invested $10,000 into Raymond James stock when it went public in 1983, you’d have turned into more than $400,000 by the time Tom retired in 2010. The same amount invested in the S&P 500 would have grown to just $70,000.

Today, I’ll share with you three pieces of advice from Tom James.

Three Pieces of Investment Advice

1. You have to take risk, but there are times when you do it and there are times when you don’t do it.

I learned that lesson the hard way in 2008. As a real estate developer, I had been raking in profits for years. But I kept putting my money back into real estate, even when it was clear the risks were rising.

I lost nearly everything in the crash. I could only watch helplessly as the opportunity to scoop up valuable real estate at bargain prices passed me by because I didn’t have any money to invest.

For Tom, one of the most difficult times in his career was the bear market of 1974. He ended up having to sell off a part of his coin collection to keep Raymond James afloat. But it was a risk worth taking and now his stake in the company is worth more than $2 billion.

2. Invest in what you understand.

One of the reasons I invest in real estate investment trusts (REITs) is because of my background in commercial real estate. That experience helped me understand why REITs have

For Tom, running an investment bank meant that he was familiar with the financial industry.

So when the stock market bottomed in 2009, he was buying Bank of America (BAC) because it was the cheapest and JPMorgan Chase (JPM) because he knew Jamie Dimon for more than 35 years.

Those investments paid off handsomely as the banks recovered.

3. Look for companies with great management and industries with a bright future.

I regularly keep in touch with dozens of CEOs because I want to make sure they’re still making good decisions for the companies that I invest in. They help me keep up with the latest trends that are affecting their business and understand which industries and sectors will do well in the future.

Some of Tom’s biggest investments were in low-risk companies with great management teams such as Coca-Cola (KO) and PepsiCo (PEP). But he also warns that it’s difficult to pick a winner when too many companies are chasing the same thing. That’s why he thinks that more than half of the companies jumping on board the artificial intelligence trend are going to fail and disappear.

Applying Words of Wisdom

Manage your risk. Invest in what you understand. And find companies with great management.

Those are three pieces of advice that we follow here at Wide Moat Research and it’s paid off for our team and our Intelligent Income Investor subscribers.

Here are just a couple testimonials from those who have benefited from Intelligent Income Investor.

  • “Words cannot express my gratitude. Thank you so much for what you are doing, not only providing selections but also teaching. This is doing more good than you know.” – N.P.

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If you’re interested in joining the ever-growing list of subscribers capitalizing on the in-depth research and highest quality dividend-paying companies in our portfolio, click here.

We don’t just listen to great financial advice, we apply it. And so should you.

Happy SWAN (sleep well at night) investing,

Brad Thomas
Editor, Intelligent Income Daily