When we talk about securing the bag, we usually don’t refer to investing in stocks, but we should. Research shows that most people under 35 (hi, millennials!) aren’t investing in stocks. A large part of that is due to the colossal debt that is student loans and the large portion of income that goes toward paying off those loans.
I’m here to tell you that outstanding loans and fear of the stock market should not be deterrents to investing your coin and increasing your bag. I’m here to share some simple steps to start investing through buying stocks. This piece is by no means a deep dive on large-scale investing as the topic is entirely too dense for a short article to do it justice, but if you’re interested in starting then it’s certainly for you.
What is a stock and why you should care?
A stock is the financial assets raised by a company or corporations. To own stock in a company means that you own a piece of that company. That means that any profit made by that company is an increase in your pockets. The opposite is also true. So it’s always important to do some research on a company’s potential for growth! A company that’s growing is more likely to increase the company’s profits over time.
Take Netflix’s stock (NFLX). In June 2013 one share of Netflix’s stock was trading at around $30. In April of 2018, Netflix stock is currently being traded at around $313. That means that if you had the foresight to purchase stock of Netflix in 2013 the $30 you spent then would currently be worth $313 now. That’s more than ten times what you originally invested. Less than what you would spend on happy hour drinks would now be worth a car note.
You should care because as a young person you have some insight into things that will likely become popular and can, in theory, catch them early and for cheap. In doing so you will more likely be able to increase what you invested or make your money work for you.
Simple Steps to Start investing:
- Download simulation apps. If you’re scared to lose money you can practice with apps that simulate the actual stock market. You can learn, practice, and make mistakes. Take a week or month learning how to read stocks, ratings, and understand those graphs that may seem intimidating.
- When you’re feeling more confident, download one of the amazing apps that exist for trading. Apps like Robinhood and Acorn allow you to buy, sell, and trade stocks from the comfort of your phone.
- Set aside money for it! That money could be $20 a week or $100. The good thing about stocks is that there is a broad range of stocks at all kinds of prices. It’s easy to start with cheaper stocks so that you can learn what works for you and what doesn’t. Turn down that extra drink or that one day of takeout and invest that money.
- Follow some finance pages. Pages like Bloomberg Gad Fly, Bloomberg Markets, or Yahoo Finances are an easy way to keep updated on trends in the markets. If you’re always on social media following these pages will keep you informed and help you make better choices.
- Don’t be scared to take risks. Remember that you’re young and have your hands on the pulse of things that are trending. Do you follow fashion closely? Do you know which companies are becoming more popular with your age group? You can use your knowledge to invest early.
Remember the sooner you start investing the more time your money has to grow! When it comes to securing the bag investing is a great way to start. We hope that these steps will help you use your knowledge of trends in fashion, music, entertainment, and technology to help you gather some coin.