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Community Advocacy Organization

Investing 101: Beginners Guide

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There is one thing that is as certain as death and taxes. When discussing finances and investments, speculating means precisely that, speculation. The keys word here is, speculating. That means you are guessing!

Albeit the best guess, based on statistical information, it’s still the best guess.

As a boy, age 14, I dreamed of my first car. Like most boys, my dreams were of a Porsche, Lamborghini, and vintage corvette. Knowing I didn’t have the resources yet to do what I wanted was upsetting.

“Not to worry,” says dad. “If you were able to swing a nice car, you might even be able to swing the girl that wants to ride in the car too. Bare this in mind. If you don’t have the money to pay for the insurance and gas, that nice car and girl won’t be able to go very far. Stay within your means, son.”

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Investing is the same. Stay within your means! It’s time to make your savings multiply. First, let’s explore a few investing basics for beginners. How much money you need to start investing? As with any new venture, it's essential to use good common sense. Depending on where you start investing, you could do as little as $25 per month or $100. The important thing is to get started. Investing $25 per month is $300 a year, and $100 per month is $1,200 per year. In five years, that’s $6,000. If you are only getting .03%, then in five years, you have 6,180. But, if you can get 12%, your earning are 6,720. Just imagine what a $250 per month invested could yield: $3,000 per year or $15,000 in five years. That’s earnings of $360 per year or $1,800 in five years and an excellent yield of $16,800.

Let’s take a wild leap of faith. You and your better half are each able to invest $500 per month. That equals $12,000 per year or $60,000 in five years. That $12,000 times 12% earns $1,440 per year or 13,440 or a grand total of $67,200 in five years. What to invest in: (1) the stock market, (2) investment bonds, or (3) mutual funds. The stock market refers to collecting markets and exchanges where regular activities of buying, selling, and issuance of shares of publicly-held companies take place. Bonds are investment securities where an investor lends money to a company or a government for a set period in exchange for regular interest payments. Once the bond reaches maturity, the bond issuer returns the investor's money. A mutual fund is an open-ended investment company that invests its shareholders' capital in a usually diversified group of securities of other corporations.

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The most common investments are in mutual funds. Think of it: instead of putting all of your eggs in one basket, you spread them out by putting your eggs in several baskets.

How to buy stocks: Buying stocks is relatively easy. First, you’ll need a brokerage account, which you can set up in about 15 minutes. Once you’ve added money to that account, there are four additional steps (1) select an online stock broker, (2) research the stocks you want to buy, (3) decide how many shares to buy, and (4) choose your stock order type.

The secret to making money in stocks: Stay the course. Let your money work for you. The ability to keep calm under pressure without freaking out is the key to success!

Now that you have the lay of the land dig in.

Investing 101: Saving vs. investing

What is saving? The concept of saving is the process of amassing money, and then the idea of investing is making your savings multiply.

So, you think the best course of action is to maybe not get anyone else involved.


Don’t forget about inflation. Over time, inflation erodes the purchasing power of cash. That $100 bill untouched for five years will not work but the same amount. Nowhere does the cost of living keep pace. Smart money is on following an investment strategy.

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