On Dec. 20, 1922, a surveyor -- J.G. Tierney -- made his way
along the Colorado River by barge. Tierney, who worked for the U.S.
government, was surveying a remotespot in the Mojave Desert called
Boulder Canyon sits in the middle of some of the most
unforgiving land in America.
During the summer, temperatures frequently top out near 120
degrees. Less than five inches of rain fall each year. Rattlesnakes
and scorpions hide under rocks. And the sharp cliffs are
near-impossible to scale.
And yet, this canyon in the heart of the desert holds one of the
greatestinvestments in U.S. history... one that has generated
billions of dollars in wealth and is practically guaranteed to keep
doing so for decades.
But it wasn't without its costs. In total, 112 men -- beginning
with J.G. Tierney, who on that December day drowned after falling
off the barge that carried him and his equipment -- died to create
I'm talking about Hoover Dam.
Before I get too far... no, I am not recommending that you
invest in the Hoover Dam. Even if you wanted to, it's fully owned
by the U.S. government. There's not a stock you can buy that gives
Instead, it's what Hoover Dam
that is the true opportunity to grow your wealth.
Let me explain...
Hoover Dam (originally called Boulder Dam) was finished in 1936,
at which point it began damming the Colorado River to create Lake
Mead -- the United States' largest reservoir.
The project was massive. At its peak, more than 5,000 people
worked on it at the same time. And the dam contains enough concrete
to pave a two-lane highway from San Francisco to New York City.
In total, construction costs came to $49 million.
That $49 million investment is the sole reason why millions of
people are able to live in the Las Vegas area today. And it has
generated billions of dollars of wealth in the process.
But Hoover Dam didn't just create a massive reservoir to provide
water to the middle of the desert. It also created one of the most
lucrative electricity generation plants ever built.
Located in the base of the dam are 17 hydroelectric turbines
that make up the Hoover Powerplant. These turbines generate roughly
4.2 billion kilowatt hours (kWh) of electricity per year, making it
one of the largest hydroelectric plants in the United States.
Electric providers love hydroelectric power because it's among
the cheapest power sources on the planet. Hoover Powerplant sells
its electricity on the wholesalemarket at just 1.6 cents per
kilowatt hour. In comparison, Las Vegas residents pay an average of
11.6 cents per kWh for electricity -- seven times as much.
But even at that low cost, Hoover Dam generates and sells about
$63 million in electricity every year (1.6 cents x 4.2 billion kWh)
that's nearly 130% of what it cost to build the dam in the
Of course, there are a number of other costs such as maintenance
and upkeep that figure into the equation, but the point remains --
Hoover Dam has become one of the greatest individual investments
ever made by the U.S. government. And it continues to increase its
return year after year.
So how can this help us as investors? After all, as I mentioned
earlier, you can't invest directly in Hoover Dam.
You simply have to understand why Hoover Dam has been such a
Hoover Dam is what I like tocall an "irreplaceableasset
No one can come along and build a competing dam. And the world
isn't going to run out of a need for electricity. If anything,
we'll need more electricity in the future.
That's why even 76 years after it was built, the dam is more
important today than ever.
And while you can't invest in Hoover Dam, there are dozens of
irreplaceable assets around the world -- including many
hydroelectric dams -- that you can invest in.
And as you would expect,investing in these irreplaceable assets
has proven to be extremely profitable...
Take oil and gas pipelines, for example. Pipelines are the
ultimate irreplaceable assets. Another company can't simply build a
pipeline next to an existing one. And the pipelines that carry
fuel, natural gas, oil, and other commodities across the country
aren't about to be replaced by some new technology.
That's why I've loaded up on pipeline operators, which are
typically structured asIndex (NYSE: AMZ) is up 396% versus just 94%
for the S&P. And thanks to the recent boom in U.S. oil and gas
production, I believe MLPs could deliver even better results in the
Pipelines are a great example of replaceable assets. But there
are plenty of others...
Brookfield Infrastructure (
. Brookfield owns toll roads, electricity transmission grids,
ports, and railroads all over the globe. All of these are
irreplaceable assets. And they continue to earn a steady stream
ofcash for BIP and its investors.
This is exactly why I added theshares to mycurrent yield above
Action to Take -->
Don't get me wrong, there are no guarantees in investing. Any
investment can fall in value. But when you invest in irreplaceable
assets, they often end up being some of the most lucrative ways to
grow your wealth over the long term.
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