Retire On Your Visa Card

How many readers are aware that Visa - the largest credit card processing company - is a publicly traded company? If you already know - then do you own any of their stocks? And if you didn’t know - then this is news to you!

I am by no means a stock market guru or day-trading whiz, but now and then I stumble upon a good investment that is a no-brainer to me. On March 18th (ish), 2008 - VISA’s stocks started trading in the open market at $44/share in IPO. That’s about 3 months ago. Today - June 2nd, 2008, VISA is trading over $86.00 per share.

So why do I think VISA is a good investment for long-term investors? Before I give my opinion on why VISA is a good buy, let me first clear up what VISA is NOT. Many misunderstand the company VISA for a credit card lender. They absolutely do not extend cash or credit to VISA card holders. This should be apparent when you apply for credit cards with the Visa label - financial institutions and banks are the ones extending the credit to you, the borrower. VISA merely processes each transaction, debit or credit, and charges a processing fee. That is how they make their money. Now that I’ve cleared up in a nutshell what VISA does not do - let me go into why stocks of this company is worth buying.

VISA:

• has a global footprint and growing demand for card usage
• there is a genuine interest by institutions and fund managers in this company
• MasterCard is in the same business and their stock has performed well since IPO
• usage of credit cards won’t slow down
• 5 - 10 years from now, advance in technology will increase the convenience of credit card services

So the ultimate question is “Is it too late to start buying Visa shares?” My answer is a resounding NO! Look at the charts of MA and you will see why. A little intimidating perhaps to buy a share at over $100, but how many more times would you want to miss that boat sailing towards retirement? That’s just me - but I’ve not stopped buying Visa stocks since I got in, a little late post IPO, at $65/share.

Reasons to own VISA stocks is not limited to the points above - but those are my reasons for investing in Visa as a company.

p/s: This is merely a personal opinion and in no way financial advice to invest in VISA stocks.