We are pleased to introduce Ange Matthews, a self-taught, first-generation investor who believes it is still possible and powerful to enjoy investing in the market. Ange shares her expertise through workshops, seminars, classes and coaching that empower people, especially women and people of color, to use their money to make a difference in the world.
With our current economic climate, ongoing wars around the world, and layoffs happening every two weeks, it’s no wonder so many of us don’t know what to do with our money. You might be tempted to tighten your wallets even more during this time, but I’ll let you in on a little secret: A turbulent market actually presents a unique opportunity for new and returning investors.
Some of the best investment results come when individual investors can buy at a low price and later sell at a much higher price. In the past five years, many companies have experienced highs, making it expensive for investors to enter the market. This is when most lows are hitting, making it the perfect time for you to enter. Read on for tips to get you started!
How to start investing in stocks
You’re probably thinking: But the stock market isn’t for me. And it’s true up to a point. When we think of Wall Street, we often think of white men in suits, which don’t necessarily reflect us or our values. It’s also true that we still have a huge gender pay gap, with women making just $0.82 for every $1 men make. And when a recession hits or there are layoffs, women are often hardest hit. Just think back to the economic impact of the pandemic. Now more than ever, we women need to put our money to work for us by investing in the stock market.
Also, investing in the stock market has never been easier. With apps like Robinhood, Eight Core, and Stash, investing is so much more accessible than it was for our moms and grandmothers. However, many of us don’t know what to do other than buy the random stocks that were given to us when we opened our account. But here’s another secret you don’t want these handsome Wall Street guys to know: You can start investing with as little as $100, and it all starts with your mindset.
Design your investment mentality
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The first thing to address when investing is your mindset. Many people fail with sustainable and consistent investing because they don’t have the right investor mentality. Of course, investing in the stock market involves risk, but if you don’t take risks, there are no rewards.
The biggest mistake new investors make is playing the short game and panicking at the first drop in value. They get nervous and cash in before they’ve even given the investment time to sink in. When you start thinking about investing, you want to think long-term. Think of it like meeting a person for the first time. Would you end the relationship after just a week of dating? Or would you actually take the time to get to know her better to see if she really is the person you want around you? The same applies to your investments.
Think about the relationship you want to have with your money. How does that relationship live on when you leave the room? Is your money associated with a lot of negative emotions and past trauma? Or do you have a hopeful view of your money and what you want it to do for you? Is your money enough for 10, 15 or 20 years or even for several generations? Once you have defined your relationship with your money and how you want it to work for you, you can keep these goals in mind and use them as a guide to creating an investment plan.
Create your investment strategy
Once you get your money attitude under control, you can determine your actual investment strategy and how to get started.
The first thing you need is a brokerage account. A brokerage account is like your checking or savings account, but it’s used specifically to buy stocks. When considering which brokerage account to set up, review the tax benefits and income limits of each account. If you’re a beginner and unsure about investing for the long term, go for something simple and start with an easy-to-use brokerage account like Robinhood.
Once you have your account, you want to fund it. Well, I know that for many of us, spending thousands upon thousands of dollars to invest in the stock market may not be in our best interests, especially if we don’t know what to do with the money, or even know us yet our investment opportunities are not certain.
I like to start with $100 and encourage my students to do the same. In fact, that’s how I started investing in the market while making only $40,000 a year straight out of college.
It’s not about investing too little, it’s about where you will invest. There are many companies in the market with shares worth less than $100, such as Coca-Cola Company at $60.01 per share, AT&T at $20.38 per share, and Roku Inc. at 65 $.53 per share. You can start investing with as little as $20, $30, $40, or $50 a month and build your confidence until you are ready to spend more.
Investing with Debt
Photo by Tiger Lily / PEXELS
When I first started investing in the stock market, a lot of people told me that I shouldn’t have because I was in debt. But the reality is that the average American household owes $165,388. How are we supposed to build wealth if we’re always focused on getting rid of our debts? I counter that while we are paying off debt, we start investing. If you’re able to make a few small cuts in your monthly expenses, you can use those dollars to invest instead of incurring additional debt.
Decide where to invest
Start by taking stock of the companies you already buy goods from. Investing gives you the opportunity to own part of this business and actually reverse the ratio of spending.
Take Lululemon for example. You can find out the Lululemon stock price with a quick Google search. Right now, Lululemon stock is trading at $320. But if you don’t want to shell out $320 for a share, you can actually buy a piece of Lululemon for as little as $1. Say you buy $100 worth of Lululemon. They now own about 25-30% of the shares. When Lululemon increases in value, so does your stock price!
As you weigh your options, there may be times when you need to learn technical analysis to see why the company is moving up or down in the market to ensure your investment is well informed.
If you don’t just want to buy a stock of a company, you can always buy an exchange traded fund like SPY, which tracks the movement of the entire stock market. Historically, the stock market has risen after it has fallen, making this another great trail for beginners.
Take your first steps
Photo by Karolina Grabowska / PEXELS
Investing in the stock market can be scary, especially if you didn’t grow up with it or if you didn’t grow up talking about money at the dinner table. However, it is an important part of adulthood that we need to engage with more often.
As women, we want to begin to understand why our money treats us the way it does and how we can make it our greatest advocate. While investing can be daunting at first, it pays to keep going.
If you need a little extra nudge to get started, you can take my first stock challenge, where I’ll show you exactly how to take that $100 and invest in the stock market.
For more money-saving tips, follow Ange Matthews and sign up for our newsletter. Cover photo by Antoni Shkraba / PEXELS
