While I tend to think of myself as being uber responsible
and careful with my money, I’m strangely not overly cautious when it comes to
my stock picks. Thus far, it’s all
worked out pretty well for me.
I’ve had anywhere from an 8%-25% return on my individual investments
over the course of this past year.
Of course, my luck may change at any time, but I’ve got myself in the
game, and that’s what I’m most proud of.
Like many of my fellow broke beauties, I was intimidated by
the market. Let’s be real, I still am.
But I knew enough to know that my chances of growing my money were way
better in the stock market than in the absurdly low yielding checking and
savings accounts the banks were offering.
So after contributing the requisite amounts to my savings, checking, and
retirement accounts I decided to set aside some “experimentation funds”.
I opened an account at a brokerage with $1,000 and decided
to split that money between two stocks.
$1,000 was as an amount I could “afford to lose”. Like the money you walk into the casino
with. In truth, I’d be devastated
if I lost $1,000, but I know it’s an amount that won’t destroy me and it’s
enough to get my feet wet in the reality of the market.
So onto the stock picks. I wanted to invest in companies whose product I used, whose message
I supported, and whose potential for growth I could visualize. I thought about the products and
services I use every day and the brands I’m loyal to. I settled on Amazon (AMZN) and Whole Foods (WFM). I looked up their ticker symbols and
saw they were both priced near their 52 week low. With totally random, unscientific reasoning I decided they
must be a good deal and bought my respective shares of each. Like I said, not overly cautious but it
got me started.
Just by having my own money in the stock market, my desire
to read and learn as much as I could grew ten fold. I found new ways to save and cut back expenses so I could
set more aside and use my newfound knowledge from books, articles, and blogs
about the maket. All of the
sudden, just by experimenting with $1,000, I was not only invested in stocks
but in the reality of my financial future and my own financial education. I put aside more money for savings,
more for retirement, and more for my stock portfolio.
There is an attitude of “I’ll figure it out later” or
“someday” with the young and broke when it comes to investing. And while stocks will often dip and sometimes
fail, I think the real mistake is not getting involved at all, especially when
time is on your side.
I went on to buy Facebook (FB) at around $21/share this
summer. It dipped to about
$17/share in the fall and stayed there for a while. Now it’s around $30/share.
My AMZN, which I bought last year around $185/share, is now
up around $270/share.
My WFM was around $85/share when I bought it, it went up to
about $100/share this summer, now it’s back down around $88/share.
My recent purchase of Apple (AAPL) at about $535/share is
down around $503/share now.
While I’ve been weathering the ups and downs of each stock,
I’m not stressed. I believe in
each company I hold. I’m not
running to ditch AAPL or WFM. I’m
26 years old, I’ve got plenty of time for those shares to rise. What’s important to me is that I’ve
made the decision to face the reality that is my finances by getting started
and learning everything that I can to make my money work smarter, so that I
don’t have to work harder and longer.
Start trading. Start learning. Start earning.
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