Investing With Minimal Knowledge

Where Should You Start?

First off, let me say that learning the ins and outs of the stock market and investing in general, is the absolute best way to go, before you even start investing. It usually can take up to 1-3 years to learn how to invest, however, with technology and innovation, it’s becoming more simple to invest in the market. If you are one of those people who has a consistent income, and would like to earn some extra capital for the future, then investments, are the way to go.

Not to come off as a “follower”, but everyone is playing the stock market. What I mean by everyone, is the majority of institutions and corporations, including individual investors. The company you work for, that matches your 401k, invests in the stock market, with your money. Your insurance company, uses a percentage of your premiums to invest in the market. Your Alma Mater, invests in the stock market. Harvard University, being the top college with over $36 Billion in endowments.

For hundreds of years, people have made and lost money as well, in stocks. This article is written, for those of you who have heard the horror stories about the stock market, and would still like to try your luck, but don’t exactly know how. You have to know, there is ALWAYS a risk in investing in anything. So keep that in mind when you start to look into the market.

How Much Money Do You Need?

Let me also say this, it doesn’t take $2,000-$5,000 to start investing in stocks. Granted, if you have that much to put in the stock market, then that’s actually a great starting point, you have access to a few thousands, which would possibly equal to bigger returns. For those of you in the $25-$500 range, there is a starting point for you as well. Let’s say, you bring home anywhere from $500-$800 a week, or bi-weekly. Calculate your bills and how much of debt you have to pay on every month, (under 5% is manageable). If you can save $25-$50 a week, then invest that small amount into a stock of your choice every week. Now you may be thinking, where would you buy the stock? This is where, innovation comes into play. Apps like:

  • Acorn Investing
  • Stash Investing
  • Swell Investing

You can start with one of these investing apps first. For example, I have all three apps, but I use Stash more often. I started off at first, by investing $15 in their “Corporate Cannabis” portfolio. I also set up an automatic $20 a week transfer from my bank account to my portfolio. So every week, I would get a notification, that $20 was successfully transferred into my Stash Account, and I can stop the weekly transfer at any given time, with no fallout, and resume at any point and time, whenever I feel.

Now the price of the Exchange Traded Fund(ETF) that I purchased, is $53.68. So my initial $15 investment, only acquired me 0.27942 shares in the company, which, if I only left the $15 in, I would never see any real return at all. So that’s why you should set up the automatic weekly transfer to continue to build up enough, to acquire at least your first 10 stocks in whatever portfolio you decide to choose. You can start with a minimum of $5 dollars a week, if need be and then continue to go from there. It’s works pretty much the same with the other two apps as well. You can even choose what type of risk you’re willing to take with your investment, either risky, moderate or aggressive.

What Stocks Should I Pick?

Honestly, research is the key to finding a legit company to invest in. Most people who are new to the market, flock mostly to the mainstream stock, which isn’t bad, but everyone doesn’t have $1,400 to buy ONE share of Amazon stock or $176 for ONE share of FB. You have to remember, in order to see a return, you have to buy stock in bulk. The ideal number is 100, so for an example, if you buy a 100 shares of stock in Amazon at $1,400 a share, then that would equal to a total of $140,000, not including commission fees! The same for FB, a 100 shares at $176 is roughly, $17,600, plus commission. So when you think about the “Average Joe”, then “mainstream” stocks may not be the way to go, at least not at first. For new comers to the market, I suggest investing in, with proper research of course:

  1. Dividend Paying Stocks
  2. Defense/Utility Stocks
  3. Real-Estate Investment Trusts
  4. Mutual Funds
  5. Exchange Traded Funds

How To Research Stock Options?

Like I stated before, research is the key to understanding the market and the company you are looking to invest in. Most people get their news from FB and mainstream media, which is fine, but there are tons of other avenues you can take, to acquire information. Here are some mainstream sites you can start of first with, by downloading or following their platforms:

  • CNN
  • Yahoo Finance
  • MSN Money
  • Bloomberg
  • Investor’s Business Daily
  • Nasdaq
  • Wall Street Journal

You should also sign up for free newsletters, that you would receive by email, and set up alert notifications to receive throughout the day, to keep you informed. The more you research, the more you find other channels of information, and possibly before anyone else. When you start to get a feel and understanding of the market, then you can move to opening a brokerage account. Ones such as:

  • TD Ameritrade
  • E-Trade
  • Innovative Brokers
  • Fidelity

I personally use Fidelity more often, which they all pretty much work the same, they just differ in commission you have to pay for each trade you make. Fidelity, gives you the option of opening a cash account as well. Basically, it’s like having a regular bank issued debit card. The difference is, I can use it to make purchases and pay bills, and at the same time, log in to invest a portion of my finances into the stock market when I get ready. The money that I have sitting and not touching, is automatically re-invested In a Money Market Savings Account(not taken from you, but re-invested, your money will still show), and gains interest as it sits,(higher than the interest payed with a bank). Reason being, is that Fidelity operates as a “Money Market Account”. Which most, are designed like. So think about that, you just paid your bills, and decided to log in on your phone or PC and purchase a few stocks as well, and then sit the rest to the side, so it can gain interest over time, along with having a unique debit card in your pocket. Imagine gaining a 150% on your return, and it comes directly to your debit card, for you to spend.

For those of you contemplating investing, take these baby steps at first, before you decide to dump a huge portion of your capital into the market. The market isn’t going anywhere, so take the necessary time to do the homework. I hope this helps. Be on the lookout for more upcoming investment options. 

Please leave a comment below and continue to follow MillennialXeConomics.com for more info or email me at david@millennialxeconomics.com

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David Chandler

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