When I was 9 I had my first mutual fund. My Grandma and Grandpa had given me money and I took it to my parents’s financial planner to invest. I had been reading up on mutual funds and knew that “diversification was the only free lunch in investing”. I’d sit for hours and MANUALLY enter the closing fund prices into my Mac’s financial program, which would graph my growth and show my portfolio’s rate of return. I was instantly addicted to the market. I had given some money to a guy in a suit and now my money was making more money while I rode my bike around the block. This was awesome.
As I got older I would plow all of my money into my funds to accelerate the growth. I had a part time job as a Parks and Rec. councilor and would take half of my cheque to spend on myself and the other half would go into my funds. I’d watch as the market went up and down and I’d even try to time the market so I was buying the fund units when they went down. It was the mid nineties and the market was going through the roof. I was making money hand over fist and I was only 14.
In university I worked 35 hours a week at a stock brokerage and that is where I really learned how to make money. By the time I graduated I had learned how to buy stocks, options, and use leverage to accelerate my growth. My parents paid for my education and I took out my own student loans and invested them in the market (I don’t advise this in this market!). It was now the year 2000 and the tech boom was exploding along with my stocks and money. Before I was even 20 I had learned a lifetime of investing strategies and lessons. After all of that here is what I have learned.
1. Buy What You Know: I look around my world and buy stocks in things that I know and love, but also where I can see the potential growth. I go to the movies at least once a week and see how much money I spend there. At the movies I watch sci-fi and comic movies and every time one of these comic movies comes out it blows away past sales records. I love going to the gym and wearing fashion fitness clothes. When I ‘m at a fancy gym or studio EVERYONE is dripping in the same expensive Yoga or Athletics wear and so I buy my favourtie brand who I love. I’m on social media liking and commenting all the time. I see more and more large companies are starting to spend a ton of money on social media advertising and so I buy those stocks too. I invest in the brands I love and use.
2. Dividends will pay you while you wait: When I buy stocks I’ll look for companies that pay a dividend too. It firstly shows that the company is generating enough sales to be able to pay out a cheque to all of its shareholders. It also will be a way for you to collect some money as the stock price bounces around in shaky markets. You also have the option, with some companies, to buy new shares with your dividends instead of taking the cheque. This allows you to buy more stocks with your dividend income. Win, win.
3. Invest for the long run: It is so easy to blow out of your holdings when stocks take a bit of a tumble and then you miss out when the market goes back when times get better. The market will always go up and down but if you have a portfolio of diversified popular stocks, hey should continue to rise over time. Only when you see the wheels completely fall off a company or industry would you want to give it up and sell it. This will keep your money growing as the market slowly grows over time and they will keep your trading cost low.
Those are the three big lessons I have learned. Start with a financial planner to give you ideas and be there for support. Buying and holding great brands for the long run have been my road to money success and it can be yours too.