All the questions you're too scared
to ask your dad
|May 1, 2018|
Better Have My Money: learning 'bout stocks so we all become rich
Welcome to Better Have My Money, my weekly newsletter about stocks for newbies who are deeply confused and maybe a lil intimidated by the stock market. Better Have My Money is a gif-filled rundown of the things I've learned that week from my own tiny brand new stock portfolio (from how to buy a share, to beingmad about how much CEOs get paid, to losing a bunch of money in weed stocks) and the things I'm still learning.
Shit is dreary af this week, at least for my stocks, but I appeared on BuzzFeed's AM to DM last week to talk about this newsletter and it is muy hilarious that I am being interviewed as a financial expert. I used some literally bonkers hand movements to describe how markets grow over time. Sexy! You can watch thewhole vid here.
Stocks wise, it's been a kinda depressing week. Lots of DOW DROPS headlines, and talk aboutglobal growth slowing, whyinvestors are getting super jittery (rising interest rates, inflation and confusion over wth the president is doing, aka same old crap), and even maybe a recession in 2020. Maybe this is the end of the decade long growth! Again those of us who graduated around 2008 and may finally have a lil money to invest in stocks will be screwed again!
On the plus side, maybe this means stocks will drop and suddenly we'll be able to afford a bunch of them? Regardless, important to remember that historically the stock market rises despite every war, recession and president, so I'm just gonna keep my eye on the long-term.
Thankfully, cause right now I'm up... down about $12? (oh no my fake financial expert cover has been blown!!!!)
Here's my Ally stocks:And my weed ones on Robinhood:April is financial literacy month and since it's the last damn day of April, I figured I should go through answer some of the readers questions I've received!!!! I'm sorry if I've ignored your question for several months, the answer is that I don't know the answer (yet).From Caroline: I have a 401K through my job and that's basically all I got. How does someone even start investing in stocks? Do you just take $20 to Wall Street and give it to some guy in a suit? Do I sign up for an app? I am very clueless and would LOVE a step-by-step guide How Do I Even Stocks?That Wall Street finance bro does not deserve your $20 note! So first of all, your 401K is highly, highly likely to already be invested in a bunch of stocks so CONGRATS you already have a stock portfolio without even realizing or doing anything about it. But, to buy and sell your own, you'll need a special investment account (I do explain this in a lil more info in the very first edition of BHMM). Your bank probably has one! Check out its fees.I recommend the Robinhood app in nearly every newsletter cause there are no fees (unless you sign up for the paid option) and it therefore costs you $0 to buy and sell stocks. To me, it's a game changer, particularly if you're only buying $20 worth of stocks! I have a Robinhood referral code here, which gives us both a free stock (probably a super cheap one like Groupon, but there's a tiny chance it's Apple).From Aiyana: Do you additionally invest in an IRA (Roth or Traditional) or are you just buying individual stocks? I have two different Roth IRAs but have been considering buying individual stocks kind of as a test, so I was wondering if you had experience with both.
Yes we are now talking about IRAs, your dad is probably very happy right now! My dad isn't cause he's Australian and therefore doesn't know wtf it is, which is more in line with my own IRA knowledge. So it stands for Individual Retirement Account, and I do not currently have one! Honestly cause I didn't know what it was.Basically, it's just putting money aside into a special retirement account and a traditional IRA is tax-deductible (although now only if you earn under $63k, if you earn more, only some is deductible). Meanwhile, a Roth IRA is money that has been taxed first, but it means you don't have to pay some later taxes on it. And it's an account you can then use to invest in stocks or funds, and you can even pick individual stocks to buy.
But! If you withdraw from it before you're 59 1/2, you pay a 10% penalty! So it's good if you're wanting to invest in stocks for your retirement, bad if you're hoping (like me) that your stock portfolio might be something to help you buy a house in five years.
From Meggie: How did you figure out how much to start trading with? Like what percentage of your savings? I have a lot saved and just don't know what to do with it — like how much to invest vs. how much to keep accessible/liquid.
The answer is how much are you OK with maybe losing? I have somehow used a rule of thirds — one third into longterm investment accounts I cannot easily touch (which grow but slowly), another third into stocks (which may be up or down depending on the week!) and a final third into a savings account which only has 1.6% interest but that I can grab in case of emergency. Golden rule is three months of living costs kept in a bank account you can access in time of crisis, and my savings account isn't anywhere near that yet but that's the aim.
Confusing term of the week: "FANG stocks" – an acronym for Facebook Amazon, Netflix and Google (alphabet) stocks. I know, I'm embarrassed this exists too.
In related news, a founder at What's App — which has always been about end-to-end encryption —quit Facebook todayafter disagreements about data privacy. Tomorrow is Facebook'sF8, the big Facebook conference where it unveils all its fancy new stuff for developers, so I'll be watching the stock price as it unfolds.
Every week I have a lil stress about when this newsletter should go out. I have Mondays off, so that's when I write it, but sometimes I don't finish the newsletter til late at night (sometimes cause I am lazy). Today it was a little late as I was facetiming with my baby nephew who has just learned to say"bum"! He is probably a genius.Do you have a preference on when you get it? I created a Twitter poll specifically for this dumb question that you probably don't care about, but if you have THOUGHTS, pleasevote here.
If you're not down cash this week, I suggest throwing some money to the fundraiser organized by James Shaw Jnr,the man who stopped the Waffle House shooting in Tennessee last week, for the four victims that were killed. I really appreciate that Shaw did not pretend he did it to save others and was honest about wanting to just make sure he survived. And remember! Your 401K is probably invested in gun stocks! Here's howyou can find out if it is(and then make changes accordingly, if that's a thing you wanna do).
Better Have My Money is on Twitter @bhavemymoney, so please tweet nice things and tag us. Got a mate who is also clueless af about stocks buts wants to be rich one day? Forward this onto them and tell them to subscribe.
From Lucy Hamilton: "This is one of only a handful of newsletters i subscribe to and actually read - subscribe for lols and demystification of stocks and such" — I am a secret mystic so I am thrilled to hear this.
Hey, do you guys remember how I sold my UPS stocks for a slight loss last month cause they weren't moving or doing anything?
They are now up 8%!
Plz remember I am a financial expert OK.