Learn all you can about investing
Before you send one dime to a broker, you have to know what you are doing. I remember when I was in high school and I first started to get into stock investing. This was my take on how stocks worked:
First, you buy $10 in stocks. In a few months, at least, these stocks will double and you will have $20. Wait a few months more, and they will double once again and you’ve got $40. In just a year, you could turn $10 into $200 or more! Why didn’t I get into this stuff earlier? It’s so simple and I know I can make a fortune. If people would only let go of their money, they could be rich!
I will admit, it’s kind of embarrassing to think I could take this as plausible and good reasoning. $10 to $200 would be a 2000% return, which I don’t think is possible in 1 year. As ignorant as I was, I was still smart. Instead of assuming I knew what I was doing I went out and made sure. Soon I found out I was a little confused.
I spent a lot of time surfing the web for information and I read everything I could on the subject. In fact, I still read a lot about investing. I can’t say I’m an expert, I am still in college, but I do know how you can be an expert.
First, what you need to do is read up on investing. If you’re interested in the stock market, look for a book on the stock market. Go to the Book Reviews section to find great books to start out with and know which ones to avoid.
Another great way to learn is by practice. Join the free WallStreet Survivors website and practice in the stock market without losing money. It is completely free and you get to compete with others. FREE TO PLAY - Fantasy Stock Trading Game
You don’t even need to join anything. You can try on your own. Create a spreadsheet in Microsoft Excel and keep track of your own pretend investments.
All you have to do is decide how much you will invest, let’s say, $10,000. Pick how many stocks and which stocks you want. Decide what percent of the $10,000 you want to go into each stock. Look up the current value at nasdaq.com and record them on your spreadsheet. Make sure you keep track of the amount of shares you have of each stock and that it’s constant.
Then, periodically check the value of your stock and see if you made any money! The more you learn, the better you will get. This is also why it’s important to read up on investing to know that you will lose sometimes and win. Sometimes you may gain a lot, and sometimes you may lose a lot. The more you learn the better off you will be.
