"When the student is prepared, the teacher appears."
Learning and earning go hand in hand.
If you received this in your inbox this morning it’s because you have expressed interest in taking the reins of your investment life and getting started or you have already started but want to take it up a notch. Either way congratulations!
I was inspired to start this newsletter after reading an article about the disparities and wealth gap between men and women. That gap furthers with minorities. If you want to read the full article you can find it here. I want to help women gain the confidence to invest more by providing them with resources and information they need to take the leap. I also want to create a community where we can freely talk about money. How are we spending it, what are we investing in, what are our success stories, as well as our failures. I think sharing this information is so crucial and creating a space where we see others doing it as well as learning from each other will create a sense of community and reinforce that we are not alone. Talking about money can empower people, particularly women, to take control of their finances.
To be clear, I’m not an expert in fact I’m far from it and this is not financial advice. What I share is from personal experience and my own findings. I’m a research fanatic and an avid reader. I’m subscribed to over 30 different newsletters that cover topics ranging from business, investing, entertainment, daily news, productivity, entrepreneurship, crypto, mental health, photography, and technology. I spend about 3 hours a day reading, digesting the info to expand my knowledge, and applying my findings to grow my business and better my finances. (If you want any recommendations on the newsletters I read please email me.) For a long time, I’ve kept the knowledge to myself but I have realized that I could be spreading that information to empower others. Knowledge is power right? Every week, I’ll be summarizing my reads into the best pieces of information for you. The best way to teach someone is to learn it themselves so I’m here learning with you.
I grew up in a household that talked about money because as the daughter of immigrant parents we were always trying to figure out how to make our money last as long as possible. The biggest lesson my mother taught me was to save money. She opened up savings accounts for my sister and I at an early age and made us start saving. If we had 10 dollars she encouraged us to save at least 2 dollars. I became really good but I also became overly attached and too scared to invest it. I had a big fear of moving my savings out of my bank account and never seeing it again. It wasn’t until I started working full time that I realized if I wanted to eventually stop living paycheck to paycheck and be able to retire I needed to start investing.
My first stock I ever purchased was Snapchat (SNAP). When it first hit the stock market in 2017, there was a lot of hype around the stock and many thought it would balloon and double. I bought in at $25 a share and in the months that followed the stock dipped like crazy because the company was under performing. Many thought Snapchat would become obsolete due to the rise of Instagram Stories. In December of 2018, it got as low as $5! and trust me I felt like a total loser and desperately regretted my purchase.
A big lesson my first investment taught me, was to wait to invest in a company until after the buzz dies down. When big companies first announce that they are going public (IPO means initial public offering) the investors pump up the stock price and most of the time by the time it hits the stock market it is overpriced. More times than not the stock will dip. So at least for me, next time I’m going to wait until the buzz dies down before I buy into a brand new stock on the exchange.
The second lesson I learned from this experience is to HOLD and be patient. Several times I considered selling to try to recoup some of my money but I realized that investing is a long game. I opted against selling and fast forward to 2021, the current value of SNAP is now $50 per share with the potential of more growth. Who would have guessed that Snapchat would still be around and stronger than ever. My investment has doubled to date and from my research the company has a lot of potential for growth so my plan is to hold as long as possible.
Why should YOU start investing now?
Studies show that the average person can lose over 1 million dollars in their lifetime if they don’t start investing early and this is due to compound interest (Here is a great article on how compound interest works in the stock market.). The longer you’re invested, the more you benefit from compounding so I encourage you to start now.
I would like to get rid of the notion that investing is only for the rich. It isn’t. Investing is for everyone. The rise of investing apps like Robinhood, Stash, Public, E-Trade, Acorns, etc has made it so that you me, our parents, grandparents, primo, tias, basically anyone with a bank account can invest. With the rising number of applications it can also be overwhelming which one to trust with your money. Below are the applications I personally use and the pros and cons based on my experience. If you use the below links to sign up you get some money to invest. Woo!! Who doesn’t love free stuff right?
Stash (You get $20 if you sign up using this link) - https://get.stash.com/luz_9kkklx
Stash aims to make investing approachable for beginners. The service has a $0 account minimum to open a personal portfolio (Stash also has retirement and custodial portfolios), and charges $1 to $9 a month, depending on account types. If you’re looking for a little hand-holding while you build a portfolio of stocks and ETFs, Stash may be a good fit.
Pros - It is easy, safe, and good for a long term strategy. I have it set to do weekly automated deposits straight from my bank account. I look for funds and companies that payback dividends and invest those dividends back into the market. You can have both a personal portfolio as well as set up a retirement account. You can set up a recurring deposit or do it just once.
Cons - I pay $3 a month but in the big scheme of things it is worth . I’m essentially paying for a service that is helping me build wealth for my future. Another con is that Stash only executes trades twice a day because it is built for the long term investor and not the day trader.
Acorns (You get $5 if you sign up using this link)- https://www.acorns.com/invite/6D4LE9
Acorns has modernized the old-school practice of saving loose change, merging the robo-advisor model with an automated savings tool. Acorns works by rounding up your purchases on linked credit or debit cards, then sweeping the change into a computer-managed investment portfolio. That approach is certainly a useful tool to save more. Acorns offers three levels of membership:
Lite: $1 a month. Includes a taxable investment account.
Personal: $3 a month. Adds on an individual retirement account and a checking account.
Family: $5 a month. Includes everything in the lower tiers, plus Acorns Early, which lets you open investment accounts for kids.
Pros - It is mindless investing. I set it up once and don’t have to think about it. You can also pick your investment risk level and it will invest your money according to your comfort level. If I keep my money in my account until I’m 40, my hypothetical investment projection will be $20k. That’s not bad at all. They also partner up with brands that give you back a percentage to invest in. For example, if you purchase Nike shoes for $100 they will invest 5% of that into your Acorns account.
Cons - You have to pay for it. I pay $1 a month. But to me it is worth it since I’m paying for a service.
Public (You get money also but I don’t know how much) - share.public.com/antaresvv
Public is commission-free and doesn't require a minimum deposit to start investing. It also doesn't use Payment For Order Flow, which is when brokers receive compensation to route orders to third-parties for trade execution. Instead, Public has a tipping feature for trades. You can decide to give a tip to the broker for executing the trade. This helps eliminate conflicts of interest between brokers and customers. There's also a social media element to Public: The app makes your portfolio public to other users (hence the name) and gives you the ability to browse others' portfolios. Another big draw for Public is that the app lets you buy fractional shares (which it calls “slices”). This means you can purchase less than one entire share of a stock. Fractional shares come in handy when you'd like to buy, say, Amazon, which currently trades for more than $1,880 per share.
Pros - It is pretty useful to see what other investors think about a stock, why they purchase it, and their projections. It is basically a social media app with the the ability to buy stocks. Reminds me of Twitter. But if you can’t stand social media then this isn’t the app for you.
Cons - Its features are somewhat limited compared to larger brokers that also let you trade stocks and ETFs without paying commissions. Public doesn't support mutual funds, bonds, or other investments and has somewhat limited research on each stock.
Robinhood (You get money also but I don’t know how much) - https://join.robinhood.com/antarev1
Last but not least let’s talk about Robinhood. I have a love hate relationship with this company. I’m sure you have seen it all over the news, specially when the Gamestop Saga happened. Robinhood is best suited for newcomers to investing who want to trade small quantities, including fractional shares and cryptocurrencies, and require little in terms of research beyond seeing what others are trading. Robinhood's overall simplicity makes the app and website very easy to use and charging zero commissions appeals to extremely cost-conscious investors who trade small quantities. That said, the offerings are very light on research and analysis, and there are serious questions about the quality of the trade executions.
Pros - Robinhood allows cryptocurrency trades to be placed in very small quantities. Most other cryptocurrency-friendly platforms require certain minimums in order to trade. Robinhood's mobile app and the website are extremely easy to use. Robinhood is very efficient at getting your cash into the market. All customers have instant access to deposits and immediate access to funds after closing positions, and your buying power is increased as soon as you initiate a deposit into your account. You can also buy into certain cryptos using Robinhood but I don’t recommend this and I can explain why next week.
Cons - Though prices update on the Robinhood app and the website, they lag other real-time data providers by several seconds. They make it so easy to invest that is almost scary. They have been criticized for making investing too game like.
These are the four apps I currently use. There are many others but I can only speak from expereince on the ones I’m currently using. They each provide me something different. Ultimately, I advice you to pick one and just start. Don’t be scared to link your bank account and start small. Invest $20. Play around with the interface and get comfortable. You will make mistakes and that is the best way to learn. If you see red don’t panic and remember that investing is a long game. Be confident in your decisions and know that you will learn something every time. Like my momma tells me… trust your instincts not your fear.
My closing words are the following… “Be patient. Recognize there’s a cycle to investing. Don’t invest all your capital at once. Rather, spread it out over time with a clear strategy for how much you’ll invest in different assets. Diversify your portfolio.”
Next week we will dive into ETF’s, promising stocks, and crypto.
Please email me with feedback! What else do you want to see? Did you sign up on an investment platform? Did you invest? Do you have an investment story? Let’s keep the conversation going.
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