Now, notice I didn’t say the easiest and quickest way to make passive income, but let’s face it, investing is something we all know we should probably do…
You hear about investing in the break room, your uncle Joe tells you at the reunion you need to do it and you possibly know a friend who “Hit it big”.
Truth be told (If you’re anything like me) you want to invest, but you don’t know where to start. Perhaps you’re asking yourself, “What are good investments for beginners?”
Don’t worry, I have been there. Keep reading to laugh at my blunders investing and how to learn to properly start investing the right way as a beginner.
My life before being introduced to investing.
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Before I explain to you how I was introduced to investing I think it is vital to first let you know this:
For the better part of my 20’s, I spent more time paying attention to the bottom line on ESPN than I did worrying about my networth.
It is pretty well documented, but I had firmly possessed the poor habit of spending money on stuff that… well, let’s just say the typical return was a headache on Sundays.
As I have alluded to so many times, I decided to grow up and start taking my finances seriously around 2015-2016 by the age of 29. After getting engaged and recognizing that our student loan debt was a serious problem, my wife and I went all in on making sure we made the most of what remained of our 20’s.
Our financial gameplan was to:
- Pay off my student loans
- Pay off cars (Get more cash freed up)
- Throw everything we had at her whopping $270,000 student loan balance.
Ever since we implemented that plan in February of 2016 we have managed to accomplish the first two, and we are on our way towards the third (Your biggest priority before 30 should be to get out of debt, then invest for the future – more on that later).
However, in the spring of 2018, I got a little greedy. I thought I would become Mr. Investor.
I WAS an idiot beginner investor.
Remember the break room investing advice you heard?
Let’s just say I took some and ran with it. The advice came from a person who knew what they were talking about – as it pertained to their investment needs – but not my needs.
Long story short, I was talking to someone about investing out of plain curiosity. I had heard through the grapevine he did well investing and before I knew it we were emersed in a two-hour long conversation.
This guy (Who we can call Tee-Man) was a nut – he had his own spreadsheets, he checked his stocks religiously (Like hourly) and he possessed a true passion for investing.
Sort of like my passion for helping people get out of debt, this guy loved talking about stocks. Tee-Man told me how he put two of his daughters through college with his investing returns.
As our conversation got deeper, he proceeded to tell me all about these hot bio-pharm stocks that I needed to get. One, in particular, had a high risk/high reward potential. But what I wasn’t keeping in perspective was the plain fact that:
I had never invested before!
Tee-Man had good intentions.
He loved talking about stocks. His information was highly accurate, but truth be told I wasn’t passionate or knowledgeable about playing with stocks or investing in general.
I mean if it was easy, everyone would do it.
However, investing is anything but easy. There is a reason that 9 in 10 lose money with individual stock. Investing on your own is hard and like anything, it requires expertise.
But Tee-Man assured me I could simply start investing by getting the Robinhood app and buying these biopharma stocks he was telling me about and that it would be no big deal.
Call me naive, but I took $200 out of my checking and bought 50 or shares of the Geron Corporations stock knowing that in August or September there was a 50-50 chance their product could get funded.
Funded = stock blows up.
Not Funded = stock is worthless.
Each day, as it got closer to September, the stock grew, eventually growing to over $6 (Which is not bad for a penny stock that I bought at less than $2 a share).
Needless to say, I was excited, and I was fist bumping Tee-Man in my head, he knew is stuff!
That bad thing was, I was out of touch with Tee-Man and I didn’t know if I should hold or sell.