My Parents Didn’t Teach Me How to Invest but That Didn’t Stop Me

This woman taught herself to speak the language of money.

Growing up in an immigrant household in the ’80s, we didn’t talk about money — like, at all. Cash was king (ahem, queen), and stashing money under the mattress was a thing that actually happened (I know, you thought it was just in the movies). Having money in a savings account at a bank? Nope. A sit-down chat about how to invest wisely? Definitely not.

Even as I started to learn the language of money while working my first job, reporting from the floor of the Chicago Mercantile Exchange, I didn’t feel up to investing, mainly because I wasn’t yet fluent in that language. I was contributing to a 401k, but only because HR had suggested it, and I did not yet know or understand how many other options I had (many of them better than a 401k for growing my modest monthly paycheck). But here’s the word that kicked it into gear for me: inflation.

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In general terms, inflation is the slow and steady upward creep of prices for common goods and services — and, as a result, the decline of purchasing power. Stuff gets more expensive over time, and therefore people can’t buy as much. Inflation is expected to grow by 3 percent per year, every year, which is why making more than that by investing is so important; otherwise, your money will be worth less tomorrow than it is today.

So, by stashing cash under your mattress, or even in a 401k, that means you’re losing money in inflation-adjusted terms. But, by investing in the market over a long period (making you about 7 percent, adjusted for inflation), you are making your money grow faster than the would-be inflation robber.

Even though my parents didn’t teach me anything about stocks, I got down to business and learned to speak the language so I could join the investors club on my own. Here’s a crash course in investing so you can get in on it, too.

1. Make Sure You’ve Got Your Own Back

Yes, growing your money through investing is important, but not if the other areas of your financial life are out of order. Before you take your first investing steps, make sure you have at least six to nine months of savings in the bank, your credit cards are paid off, you’re working consistently on any longer-term debt (like student loans), you’re regularly contributing to your retirement and you have money saved to start investing (typically minimums range from $500-$2,500).

2. You Already Know More Than You Think You Do

It’s fair to say you probably shop from time to time and can garner which stores/brands are busier than others. Consumers like you and me drive sales, profits and — you guessed it — stock prices. A great place to figure out where you want to start investing is by looking at the companies/brands in which you believe.

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3. Figure Out Who to Call

Option 1: Discount brokerages like E-Trade and Fidelity that are self-service (mostly online) and more DIY options. Costs are roughly $4-$5/trade.
Option 2: Full-service brokerage firms, where someone professionally manages your account (and whom you also pay). This costs around $150/trade.
Option 3: Consider adding an app like Robinhood, Swell, Acorns or Stash. While you should still seek help from either a discount or full-service brokerage, these apps can help you figure out additional ways to diversify your portfolio (aka have a variety of investments, like stocks and bonds with different risk levels and rewards) and find a focus on value-driven investing, in addition to automating certain investments.

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4. Ready to start?

Once you’re ready to buy, the next steps are pretty straightforward. First, select which stock(s) you want to buy. Remember from No. 2: You know more than you think you do. Be like Warren Buffet and “Buy into a company because you want to own it, not because you want the stock to go up.” Next, decide on the number of shares that you want to buy. You don’t have to fill your portfolio with one stock (in fact, you shouldn’t; you’ll mitigate risk by diversifying your portfolio), and it is OK to start small. Then, decide how soon you want to invest. This means whether or not you want to buy the stock at the prevailing market price (a market order, with prices fluctuating in seconds) or only when the stock is at a certain price (a limit order). Finally, quickly transfer your money: a wire transfer typically goes through the same business day, a check deposit goes through in up to five business days and an electronic transfer can be set up in roughly five minutes but may take up to three days to post.

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Once you have made your debut in the investment club, remember that you’re playing the long game. A smart investor doesn’t look for overnight results, but rather, grows their portfolio over time. So, don’t get sucked into logging in to check on your nest egg multiple times per day; the market can and will fluctuate, and you’re only going to freak yourself out. Instead, keep an eye on your portfolio say, once per week, so that you can make any necessary adjustments to help your money grow, baby, grow. That’s how I raised myself to grow up to be an investor (and get a good night’s sleep without a lumpy cash mattress), and how you can, too.

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