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I have Tweeted over 6,200 times. Follow me, follow you - or whatever Phil Collins said. And I have had people Tweet me back many times, but I've never received a Tweet quite as funny as this one:

The "this" - my stock option investing newsletter. The irony - the fact that Luis probably first discovered me because I called key components of Netflix's (NASDAQ:NFLX) 2011 collapse before they happened.

Luis' Tweet got me thinking in a couple of different, yet related directions.

First, it triggered thoughts of the old adage that you should treat investing like a bill. By making it part of your budget, you can ensure that dollars you could be investing are not inadvertently making their way to cups of coffee, movie tickets, arcade tokens and Netflix subscriptions. Second, Luis' Tweet made me consider something I've been thinking a lot about lately - asset allocation. A relationship exists between these two points.

$50 A Month

Money magazines probably beat it to death just a bit, but it's pretty powerful. If you invest $50 a month and generate an 8% annual return, you'll have $29,647 in 20 years. Let it sit for 30 years and it becomes more than $75,000. That's pretty impressive and, while 8% is pretty good, it pales in comparison to what the right mix of tech and Internet stocks could have returned over the last decade or two.

That's pretty powerful, but what's even more amazing is that if you took the $8 a month you spend on Netflix, in 20 years you would have more than doubled your money to $4,744 and, in 30 years, you would end up with more than $12,000. That's nothing short of extraordinary - a measly eight bucks a month at an 8% annual rate of return yields over 12 grand.

Now, before you get all upset and claim that I have taken my Netflix bearishness too far, relax. I am not saying that you need to cancel Netflix and invest the $8 or put it toward my newsletter. That would be insane. But, this little story does tell us a thing or two about the choices people make and the power of investing even a tiny bit of money on a regular basis. It also speaks to asset allocation.

Asset Allocation

Even if you do not have a budget, you need to work within the framework of one inside your portfolio. As a mere mortal, I have a budget, both in the day-to-day and in my investing. That's why when people ask me why I do not actually invest in many of the trades I discuss, I tell them that most brokers do not accept good looks for payment.

Let's up the ante from $8 or $50 a month and consider the investor who is fortunate enough to start with $10,000 and then invest $1,000 a month thereafter. This person must first sit down and deal with allocation and budgeting at several levels.

If I were that person, here's what I would do. In this case, I become 25 years old; single; frugal, though not cheap; and looking to scale back from work considerably around age 55. I'm not the type of person who will check my brokerage account each day. I'll probably check my stocks a couple times throughout the day on Seeking Alpha and take action if necessary, but, for all intents and purposes, I want to put this thing on auto-pilot. As such, I will not go ultra-aggressive, but I will dabble in a speculative stock here or there.

Before we consider specific holdings and allocation, a mere 5% annual return on a $10,000 initial investment followed by $1,000 a month for 30 years gives you $880,404. By 2046, you'll have $1,000,000. Yes, that does not count inflation and commissions, but it also does not consider dividends and growth above 5%. Tick the return up to just 5.5% and 30 years yields $969,673.

Those numbers alone, which I never tire of reading, justify a long-term approach that focuses on dividend reinvestment. The more I think about it, the more I think my kid, when she starts investing on her own, should take whatever I start her off with, keep the Sharebuilder account and sock away that $1,000, or whatever it is, each month along relatively conservative, but highly effective lines.

There has been a bit of controversy surrounding this general topic on Seeking Alpha, but I see no reason, for most people, to do anything but allocate about 70-80% of their money to dividend-paying growth and/or blue chip or soon-to-be blue chip stocks and the rest to non-dividend paying growth stocks and speculative plays. Keep an eye on it daily, readjust each quarter based on your changing convictions and performance and 30 years burnin' down the road, you're sitting relatively pretty.

Company (Ticker) $10,000 Allocation $1,000/Month Allocation
DIVIDEND PAYERS
Altria Group (NYSE:MO) 15% 20%
McDonalds (NYSE:MCD) 15% 20%
Whole Foods Market (NASDAQ:WFM) 10% 10%
Starbucks (NASDAQ:SBUX) 10% 10%
GROWTH STOCKS
Apple (NASDAQ:AAPL) 15% 15%
Amazon.com (NASDAQ:AMZN) 15% 10%
Nissan (OTCPK:NSANY) 10% 10%
SPECULATIVE
Pandora Media (NYSE:P) 5% 5%
A Quarterly Pick (NA) 5% XXX

Of course, the stocks and allocations can change over time, but, in some cases, they might not have to. The point is that it does not take much to do relatively well as an investor. A watchful eye probably works better than an obsessive one. A plan (whether it's dividend reinvestment, a stack of ETFs and mutual funds or growing tech companies alongside your favorite sector funds) that you adhere to as methodically as Netflix removes $8 from your checking account each month should come closer to providing consistent returns than chasing the flavor of the day.

Source: Should You Invest Your Netflix Subscription Money?

Additional disclosure: I am long NFLX June $40 put options.