I ❤️ Monday.
Not everyone does because it signals a return back to work, but here's why I don't mind it. Investing in stocks is the new hobby I picked over Covid lockdown. Some people learned how to bake sourdough bread - I buy shares of companies in the public market.
Now I'm eager to see Monday, and find out how my money works for me, to make more money.
Primary Target: Emerging Technology
You know I'm tech enthusiast so it's no surprise that my investments are in future-forward, high-tech companies performing cutting-edge work.
Here's a short-list of my higher conviction plays, if you're wondering:
All are relatively small companies today (in the Summer of 2021). All should be much bigger in five years. The plan is for them to gain business success and I'll see my investment grow with them.
Keeping Cash is Just Another Option
No doubt this is about making extra money. It took me a while to finally figure out how terrible today's savings rates typically are. Keeping my hard-earned cash in a savings account with my bank actually looses value for me every year.
How? Inflation reduces my buying-power.
Getting a 3% raise every year at work only guarantees keeping up with how much more expensive everything progressively gets over time. I can't get ahead of the game like that. My bank's savings account interest rate doesn't even come close to keeping up.
Does saving cash actually mean I loose money? Seems like it.
Yes, I need a well-planned amount of money saved for monthly living expenses, bigger yearly purchases, and surprise expenses. Beyond that, maybe I should be investing more.
Money Can't Buy Happiness
We all know the old cliche that money can't buy happiness. We all intuitively understand that money provides options.
We use money as a resource. Buyinh the products and experiences that we want to create happy memories that leads to a life well lived. Money creates freedom of choice. That might mean a lot depending on your stage in life.
If you're young, putting a part of your paycheck into a managed index-fund offered in your company's 401K is a fantastic way to prepare for the future. It's an easy way to get nearly risk-free exposure to stock investing. I've found it to be good returns with little effort.
For example, I put a part of my paycheck into $FXAIX - the Fidelity managed account matching the S&P 500. My opinion is set it and forget it. It'll be a big help when retirement comes around .
If you're older, and have the means, you might choose to intentionally pick individual stocks fitting your interests. You'll get involved and manage your stock portfolio on a weekly basis. Even if it's on auto-pilot after a while, and you're simply checking in and taking notes.
By "means" I think of it as money I can afford to loose. Not the goal, but a real possibility, and I can't allow it to sink my personal finances.
Motivated to Learn and Earn
Some of us will naturally find building up a stock portfolio an intriguing hobby. One more fulfilling than watching sports, Netflix, and tiktok.
Reading articles like, "if you invested $1000 in Microsoft ten years ago it would be worth $XXX...", fascinate me. Google search that if you want. Swap out your favorite high-tech company name. Are you stunned and amazed at what you discover? How does that make you feel?
It inspired me to seek out what I think are the lessor-known emerging companies that will explode into the next FANGMAN-quality group for the next decade. I only choose to buy stock in companies that I understand. That means research and performing due deligence. I need to know what I own.
I love to learn. Investing is a satisfying way for me to spend my spare time in a productive manner. I want to discover what people call asymmetric risks. These are investments that have a relatively small chance of loosing my money, but a high chance of returning double, triple, or even ten-times my money given five to ten years of holding.
Practice is Perfect
There's no need to immediately open a brokerage account and transfer a bunch of money from a savings account to get started. Especially to immediately buy a bunch of stock based on hot tips found in rando Reddit forums.
First decide a budget and research stocks based on what you know. Use your knowledge and experience as your investment edge. Do something called "paper trading". Simulate buys tracking share prices daily as they rise and fall. Don't use paper - use a proper spreadsheet app.
Discover your performance over time. Get a sense for how the market behaves and how you choose to react in turn. Gain confidence practicing before doing real stock investments.
I can't help but think stock investing is a proper test-and-learn for people who have an eye on entrepreneurship. Investing seems to me to be a lot like being in charge of a company. Strategy, due diligence, budget, and expectations on returns are key to your portfolio and a dream startup.
Patience
That means I need to make buys to gain a position and then stay patient. Ideally, watching my portfolio grow over the months. Occasionally making adjustments like selling off stinkers that didn't pan out.
Better yet, trimming some winners to take profit. Then I have new capital to deploy building starter positions into new companies I want to own and support.
I wish you great happiness and prosperity this year!
