Trust me, it is not too late.
There are many different strategies out there to help you invest and trade in the markets, which can make it seem daunting to even get started!
As someone who started investing from scratch in 2016, I've learned a lot on my own and improved my financial literacy, which was not something that was stressed to us in grade school back in the 90s/00s!
This new generation is smarter than ever before and will continue to rely heavily on the digital world to grow their future. Today, we have a vast number of online resources and more access to financial products than previous generations, but trust me when I tell you that this movement is just getting started!
If you're someone who feels like it's too late to start investing because the markets have reached all-time highs, or you doubt it will ever pay off, please think again.
That is why I am here to help ease concerns and share my valuable insights from my own experience!
Brainwashing Statements That Discourage Investing
As I'm sure you've heard and seen everywhere, "you should only invest the money can afford to lose", or "make sure you have a nest egg big enough for emergencies first"!
Ok, so here's my two cents on that...
First of all, in this day & age, no one has money they can afford to lose. With sky high inflation and increasing credit card usage, money is always needed. It has become increasingly more difficult to save money when many Americans are struggling to even make ends meet! A lot of Millennials have a hard time envisioning their first home purchase because it seems far out of reach & not even worth it.
In fact, one of the reasons why I was so determined to start investing on my own was because I got myself into credit card debt (on top of massive student loans) right out of college that felt impossible to pay off. Being the frivolous spender that I was, I refused to give up the things I liked just to meet a budget, so the problem only got worse. Any money that I tried to save or invest through a financial institution needed to be withdrawn periodically to pay bills, so it wasn't worth their lofty fees to stay with them. My full-time job in retail pharmacy was taking over my life and quickly became disinteresting so I knew there had to be a more creative way to pay for my lifestyle.
Now, I do not recommend getting into credit card debt if you haven't already, but in reality, it's pretty inevitable for Americans to carry debt on the daily. If you think about it, companies take on risk by investing up front money (often borrowed) to see a profit afterwards. Part of running a business is managing its assets and liabilities through balance sheets. Of course, the goal is to have your assets outweigh your liabilities, but without leverage, the dream of profiting and becoming successful wouldn't be possible (unless you're filthy rich to begin with).
So then, if businesses are funded with debt for their big dreams, why should everyday people feel guilty for taking on their own leverage from time to time? Have we been taught as a society that living within your means and letting the "big financial guys" control our money (while they profit) is the preferred route? When you borrow money to buy a home, you have a massive mortgage where interest paid is a greater monthly dollar amount than many people will ever see on their credit card statements! The burden of owning a home is sometimes not worth people's life savings when they don't see a profit from it for decades. If people are already working multiple jobs just to pay their bills, what happens to their dreams if they can't invest for the near-term future?
Ok, I'll stop my ranting now ;)
Regardless of debt, investing a reasonable, small amount on a regular basis is something anyone can afford to do now with the digital technology that is accessible to us!
The Power of Micro-Investing
All in all, it does not take a lot of money to start investing today. Mobile apps and online financial platforms make automated investing an effortless task. The best part is you don't even have to know what you're doing because the platform will automatically divvy up your contribution into fractional shares so that you have exposure to hundreds of companies without paying the lofty price for whole shares or whole ETFs. This is called micro-investing.
There are many incentives for creating an account and can take as little as $5 to get started. The app that I personally used to start investing spare change into an automated portfolio in 2016 was Acorns, but today, many fintech companies are piggybacking on this idea.
Therefore, people are putting their money to work even if they do not have a big nest egg to begin with! The money you start with may feel like it'll never grow, but you'll be surprised when you see the round ups from your everyday purchases get invested. You're essentially paying yourself spare change everytime you buy something already! Acorns.com
The Multitude of ETFs Available at a Low Cost
If you have at least $1K that you want to deploy, you may not have to micro-invest, but the idea of automatically investing into a brokerage account on a regular basis is still the same! Over the long term, the best method to invest passively is setting a dollar amount you want to automatically contribute towards an ETF plus the frequency in which it's done (weekly, monthly, etc.), will allow for cost averaging (since you're not randomly timing the market). Over time, those contributions along with the compounding of it's dividends and interest will grow all behind your back!
If you haven't already read my post about ETFs, I highly recommend doing so! Understanding the concept of an ETF along with diversification is paramount to building your own portfolio! But don't freak out, it's so cool (and simple) that you'll be excited to learn more!
Today, a plethora of reliable sources like Investopedia.com can help people learn/brush up on their financial literacy with thousands of easy-to-understand tutorials and videos. Anytime I need clarification on a term or strategy relating to investing, that's my bible!
The first ETF search engine I came across ended up becoming my go-to resource for finding ETFs. You can search for ETFs that contain your favorite company's stock, find ETFs by sector, theme, size, and so much more! It's as easy as ETF.com to add to your favorites bar.
Yahoo Finance is a great hub for everything in one. You'll get your business news, economic events, market moving headlines, all with the ability to search and follow companies and products. It also allows you to link your brokerage account to display your portfolio in a more eye-catching format. You can also see what the community is saying on chat forums and pitch your two-cents in for specific tickers! finance.yahoo.com
One major reason why people feel intimidated by the big investors on Wall Street is due to the lack of transparency behind portfolio packages, so they feel they could never re-create the same kind of portfolio on their own. Once you understand what financial products are available to the public (retail investors) and realize how cost-efficient they are compared to advisory fees, you'll probably start thinking of all the possible ETFs that could build your ideal portfolio!
Ease of Access/Tactical Tradeability
Maybe its trust issues, could be fear of committment, but people love to know their money is in reach if they ever need it. The money you invest should not I repeat should not be your savings account or act as a checking account unless it is an only emergency option. However, the ability to access your portfolio should not feel impossible, but rather effortless. If you want to add or sell shares of a particular stock/ETF during regular market hours, it can be done in an instant if needed. Settlement of trades take place the next business day now, which means the $ sale of a share could be withdrawn from the account in 1-2 business days. Essentially, you shouldn't have to ask for permission to deal with your money!
Greater Personal Satisfaction
If done accurately, without withdrawing from your investments, the growth of your own portfolio will feel even more satisfying of an acheivement knowing you picked your own products without having to pay someone else to do it for you! The right resources and platforms will have benchmark portfolio models to guide you in properly allocating % your portfolio. Tracking your portfolio performance is one of the best motivators to staying in the game. Whether you're up or down YTD, as long as you're diversified and stay the course, you can rest assured knowing you have the latest fintech doing most of the hard work for you. You're not in this alone, but you'll feel as if you are!
In future posts, I will discuss in greater detail the beauty of diversification and theme-investing to mirror your unique style. Investing is not a cookie-cutter approach, but should include brands you identify with, are a regular customer of, and/or that you are a believer in.
Until then,
XO Hope
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