Hello everyone! Welcome back to BirthMay 2022! Today’s post is about what I’ve learned recently on investing!

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In case you’re new, every May I blog every day and call it BirthMay! Why? Because it’s my birth month and I’m super extra.

Now, I’ll have to admit, I still don’t know a ton about investing. I’m honestly so clueless still so for legal purposes I need to make it clear that none of this is any financial advice. This is just me, a regular non-finance person, sharing what I’ve learned thus far. Here we go!

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Finance Friday: Investing

So investing is one of those things that I always knew I should know about, but never bothered to start to learn until recently. In fact, I have a vivid memory of learning about “stocks” in middle school, but not very well because I pictured it as people going into a Costco-like warehouse, aka the “stock market”, and a bunch of fancy people pointing to a pallet of stuff in the warehouse, haughtily saying “yes, we’ll take that one” and they “purchase” the stock. Then, they make money on each unit sold as their “dividends”.

Eighth-Grade Me knew nothing, clearly. But I suppose that’s essentially what stock trading is, just minus the warehouse and specific pallets of inventory. Someone decides a company has something of value, gives them money for partial ownership, and, theoretically, are rewarded with small portions of the profits for supporting the company.

Now, I went into investing a little blindly honestly. I’m just referring to my “fun” investing, not my retirement accounts like a 401k or Roth IRA. This is just a brokerage account I set up to put some money aside every month and just do whatever with it. While I do hope I make money eventually (not in this market though, LOL) and get more comfortable with larger amounts eventually, I did start small.

When I opened my account, I decided to follow the advice I’d seen of “invest in companies you already use and support”. So, if you use Amazon or Google a ton, buy those stocks. However, I soon realized how expensive those big, flashy stocks are, so I quickly gave up on that strategy. I do still plan to buy individual company stocks now and then, but only if I really feel like it.

Instead, I watched a few more YouTube videos and realized a better strategy would be Mutual Funds and ETFs. So that’s what I did! Now, I won’t pretend I fully understand the difference between the two, but I believe ETFs are a little trickier as they are more involved and do have a specific amount you have to buy for each fund, similar to a stock price. Mutual Funds are more like Index Funds I believe. You can invest any amount and not think about it as much.

For me, I’ve started to focus on Mutual Funds. In general, I don’t want to think too much about it, so those work perfect for me. Now, my portfolio is looking absolutely terrible, as is pretty much everyone’s since the market is not great right now. However, a lot of people in the financial groups I’ve joined have shared that their outlook on it is that we’re buying “on sale” right now and just have to hold on. That mindset has been working for me too so I’m still investing the set amount every month and waiting it out.

Oh! I nearly forgot! Before I did all of this, I actually used an investing app. I used to use Acorns, as one of my former coworkers recommended it. I did like it at first but did eventually switch, although I understand from first-hand experience why these apps are helpful for people getting started. Acorns isn’t the only app like this but it’s the one I mention because I used it. Basically Acorns would allow for someone to set a reoccurring payment and/or “round up” their expenses and invest the change. It’s meant to be an easy way to start an investments account, with a low-barrier to entry. Acorns then takes the funds of everyone, invests it for a small monthly fee, and then allocates out the dividends accordingly. It was fine and I’m ultimately glad I did it to get started, but if I could go back I would have invested in mutual funds instead right off the bat. I never ended up investing too much into Acorns over the years and I found the fee was pretty high for what I was investing. The fee is only a few dollars a month and I often was earning more in interest than I was losing to the fee, but even then thinking about all those fees is quite sad for me to think about! I do like that it’s an option, but I wish I had made the switch and done the research sooner.

Basically, I’ve found it’s way easier to get started than I thought! The best resources I found was looking up “how to start investing” or “investing for beginners” on YouTube and it was a chain reaction from there. YouTubers will share anything from their favorite brokerages, walkthrough of how to actually purchase stocks and funds, their top 10 or so funds to invest in, and so much more. Now, I obviously would caution against finding one person and blindly following whatever they say. I try to watch 5-10 videos about a particular topic from a variety of YouTubers to get different opinions, pick what I feel comfortable with, and go from there. I am so glad I finally got started and honestly do wish I had put in the work sooner to learn and invest.

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So that’s my take on investing! Super simple, because I do still have a ton to learn. But for now, this will work!

Thanks for reading!

Pamela

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