Lifestyle

Secure the Bag: Stocks and Investments

As young adults, it’s important for us to work on securing as many bags as possible. Working a 9-5 just isn’t enough. I’m sure most of us are in debt with outstanding loans and bills piling up.

Earlier this year, a lot of people starting investing in cryptocurrency, which can be a little dense and tricky to understand. However, there are other options when it comes to making investments that come in the form of apps.

Back in the day, you would’ve had to call a stockbroker to make a trade, but in 2018 that’s not the case at all. Now all you have to do is download an app, type in some of your information and BOOM you’re all set to start trading.

Honestly, I didn’t have an in-depth knowledge of stocks until recently. When I was college, I took one ECON course and I only learned the basics. So I’m here now to teach you some of what I taught myself along with the best tools to utilize for investing.

Learning about stocks and investing can be boring and dense so I’ve come up with some information that is straight to the point so that you can get the gist of investing.

Wait What Exactly Are Stocks?

Stocks are a type of security that indicates ownerships in a corporation or a claim on part of a corporation’s assets and earnings. Stocks are one of many investing vehicles.

The two types of stocks are common and preferred. Common stock typically entitles the owner to vote at shareholder meetings and receive dividends. In contrast, preferred stocks don’t come with voting rights, but have a higher claim on assets and earning than common stock shares. The type of stock we’ll be talking about is preferred.

Owning a stock in a company ultimately means that you own a piece of that company. Any profit that is made by that company is beneficial to you. However, when that company isn’t making any profit it affects you as well. Always do your research on a company’s potential for growth before investing.

With that being said, a company that is in the process of growing will more than likely see an increase in profit over time. Also, it is important to note how influential the company is amongst its users, which can be good or bad in regards to design changes, bad PR or simply loss of interest. For example, Snapchat’s stock (SNAP) plummeted by 6% (about $1 Billion) back in February after a popular social media influencer tweeted about disliking the app’s new design. Then in March, it went down again by 4% ($800 million) after an offensive domestic violence ad was used. Each plummet affected its market value.

Also, foresight is a major key. Back in June 2012, Tesla’s (TSLA) stocks were trading for about $32. As of now it is trading for about $294. If you had the foresight and/or funds to purchase Tesla’s stock for $32 back in 2012 the money you spent would be worth way more now. That’s around 9 times more than what you would have originally invested. So what you would spend to fill up your gas tank, get your nails done, haircut, weave, or whatever would now be worth a car note, utility bill or even a plane ticket.

The Relevancy

As young adults, we have a lot of insight into things that are popping and not so popping as well the ability to make predictions on the fate of something. Our insight and timing is what will help us grab stocks early in the game while they’re cheap. By making judgment calls on the fate of stocks you’ll be able to increase what you initially invested.

The whole point of investing is to work smarter not harder. I know that many of us have gone to college and have jobs. We’ve put in endless amounts of time and have made countless sacrifices for the sake of our education and careers. Investment gives us the option to put our hard-earned money to use for our future.

Where Do I Start?

Simulation Apps and Practice

Well for starters, I would suggest using simulation apps. Simulation apps give you the opportunity to practice so that you’re not losing money and screwing things up while learning. It’ll give you the opportunity learn how to read stocks, ratings as well as the graphs. It may seem a little overwhelming at first, but once you get the gist of it you’re good. The best apps to use for that are: Stock Wars, Stockfuse, Best Brokers, MarketSim, Forex Trading for Beginners, and Invstr. I’m currently using Best Brokers and MarketSim.

The Real Deal

When you’re feeling confident after practicing you can download some of the best apps for trading

Robinhood offers free stock trades. However, it’s too free because you still have to pay fees and other costs. Your trades will have zero commission via Robinhood. Through the app you can connect your bank account, fund your account and trade fee-free. You can view your portfolio value and buying power right from the app. Even before your account is approved you can view the current stock trends. You can also share a link with friends and family so that you all can get a free stock. I’m currently using this app.

Acorns is a top option for those who don’t want to spend a ton of time worrying about their investments, but would like to contribute regularly. You can link a debit or credit card to the app and Acorns will “round up” your transactions to the next dollar and invest the change you would have received had you paid in cash. Acorns makes it easy to invest even at small dollar levels because a few dollars here and there adds up pretty quickly. Accounts with a balance up to $5,000 pay $1 per month. Accounts with more than $5,000 pay 0.25% fee. College students can use their “.edu” email and can use Acorns for free for up to 4 years from their registration date.

Stash offers a low cost method to build a diverse portfolio. Also, it helps you learn how to make the best investment decisions. It has educational content that is customized to your investment preferences. You have the option of choosing between values-driven portfolio focused on different investing themes or building your own custom portfolio. Stash is an excellent starting point for beginners.

Vault is ideal for those who are self-employed freelancers. Freelancers don’t have access to an employer 401(k) plan and will ultimately have to put together their own retirement plan. Vault allows anyone to open an IRA, Roth IRA, and SEP IRA account for their investments. Vault gives you the ability to invest based on a specific percentage of your income in whatever form of IRA you want. Whenever money is deposited in your account through your freelance job, the vault app will notify you to approve the depositing percentage you chose in your IRA account, but you also have the option to invest your percentage without manual approval. Also, Vault uses the same pricing model as Acorns and Stash.

  • Stockpile offers a different approach to buying and selling stocks. With Stockpile you can buy fractional shares of pretty much any company. Also, you can fund an account with a stock gift card that will give the recipient shares of the stock starting at $5. There aren’t any monthly fees and all trades are 99 cents. This app is perfect for kids or young adults interested in investing. Stockpile also offers single stocks and ETFs. You can gift or be gifted shares of a stock or a basket of stocks via e-gift card, physical gift cards or through a bank transfer.

Save, Save, Save

Set aside money for your investments. You can start small or big. It doesn’t matter as long as you start somewhere. One of the good things about stocks is that there is a broad range of them for different prices. It’s easier and more ideal to start with cheaper stocks so that you can learn the ins and outs of it without it hurting you too badly. Pass up on a drink or a pair shoes and invest in yourself.

Tips

  • Read through finance pages like Bloomberg Gad Fly, Bloomberg Markets, or Yahoo Finances. If you’re always on social media follow some finance accounts. Keeping up with finance news and sites are the best way to stay updated on trends in the stock market.
  • Take some risks
  • One of the key things about investment is prioritizing. You want to ball out and do some shopping, but in order to invest you have to chill on some of your frivolous spending and only spend when necessary. Your financial future has to be one your top priorities.
  • Use the fact that you’re young to your advantage. Being young allows us to have insight on trends and can use that knowledge to invest early and wisely.
  • Timing is everything when it comes to investing. The sooner you start investing the more time you give your money to grow.

I hope the information and tips I provided help you decide to invest in your future. Use your insight and knowledge of trends to make some money.

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