This is the year to fall in love with the sock market
When I was 18, I fell in love with the stock market. It happened out of necessity, really. My Dad was a financial consultant, so growing up with him meant that we talked about money, investing and the stock market. Instead of going to father daughter dances or going out for fro-yo, we read the Wall Street Journal and picked stocks. He taught me what he knew, and he knew about money.
By age 18, I opened a Roth IRA with money I had saved from working at the neighborhood Italian deli over Christmas break. It was about that time that I realized what investing really meant. I opened an account and put in money (that I would have otherwise left in my savings account). I bought mutual funds or stocks. Over time as the market went up, my investments went up with it. I realized the steps to investing: I put money in, I pick investments (provided that they do well), my investment grows way more than if I had left it in my savings account. Once I figured out how it worked, I was hooked.
I was lucky. I had someone to teach me about the market. My Dad was not only accessible but expected me to ask questions. Many folks whom I’ve talked with do not have a person like that in their lives that they can refer to. If you fall under that camp, do not be disheartened, investing is still a great idea.
For those of you venturing out into the world of investing, here’s some advice from one girl to another.
1. Get excited about making money!
When women make more money, you can almost guarantee that they will be using those funds to further their family, their community or both. Having more money means that you have options for yourself and the people you love, so get excited about the prospect of learning how to invest and the possibilities that come with it.
2. Get Informed
If you’ve never invested before, start by getting educated about what that means. Start to follow people on social media who talk about investing, read the Wall Street Journal and talk with people you know who are savvy investors.
Just like I wouldn’t recommend getting married after 1 really good date, I don’t recommend trading without some knowledge of how the market works. Instead, of jumping into a brokerage account, practice trading. Make a spreadsheet with some stocks that you might be interested in and pretend you’re trading. This gives you the chance to see the ebbs and flows of the stock market before investing any money.
Your pre-investment spreadsheet should have stocks that you want to buy. What’s the price when you “bought it”? What value is it at in a week or month? Would you have made money or lost money? What did you learn?
After you’ve spent some time getting informed, open a brokerage account and start small. Just keep in mind, investing is a marathon, not a sprint.
3. Ditch shame, blame and judgement because you don’t know everything there is to know about investing.
Look, there’s a gazillion acronyms and nuances to investing. I don’t know all of the in’s and out’s of every investment, and I was a licensed financial advisor! Never feel bad for not knowing all of the details. Instead, get curious, ask questions and focus on learning. Shame, blame and judgement have no place in your investment portfolio.
And, if you’re working with a financial advisor, don’t allow them to shame or judge you, either. If any joker makes you feel bad about the fact that you don’t know your trust funds from your hedge funds, stop working with them and find someone else who encourages questions.
You get a gold star for embarking on a journey to improve your financial future. Investing in the stock market is a long term game. Make sure that you give yourself a giant pat on the back for wanting to delve into investing in the first place and then cut yourself some slack. You’re doing great.
And, just like trying a new exercise plan, anything new is easier to start when you have a buddy. (If you need an investment buddy, I’ll be launching my investment mastermind soon. More to come on that!) Try to find a friend or two that’s interested in investing. Schedule zoom coffee dates on a regular basis where you can talk about the market, investing and stock picks. Small groups are great for helping you with a new adventure, such as this.
My financial journey has been a long windy road, but I wouldn’t change it for anything. I hope that 2021 is the year that you decide to give the stock market a shot. You never know, you may find love, just like I did.