That Christmas Bonus Ain’t Gonna Invest Itself That Christmas Bonus Ain’t Gonna Invest Itself Happy 2019! For many of us, the New Year is a time to renew our vows. You know, the vows to exercise, eat healthier, save more and spend less. But the fact is that most of the promises we make to ourselves usually go out the window by the first of February. Being no exception, I totally connected with a meme I saw recently that read, “I can’t believe it’s been a year already since I didn’t become a better person”. While I can’t help much with the physically healthier you, I have some ideas for those who want to save more and spend less. Let’s start with “spend less” part. Have you ever received a holiday bonus, a tax return or some other unexpected windfall, only to blow it on something you didn’t need anyway? Maybe you spent it on new clothes, a piece of furniture or a trip. If you asked me a year from now how I spent my Christmas bonus, or how I’ve spent any Christmas bonus for that matter, I wouldn’t have a clue. Do-it-yourself Investing What if you could turn that bonus into the gift that keeps on giving? Let’s say that instead of spending your bonus, you invested it. I’m not talking about giving a chunk of it to a high-priced professional money manager to invest it for you, I’m talking about DIY investing, or doing it yourself. There was a time when just the thought of choosing an investment was enough to trigger a panic attack. Yet the thought of making my own investment decisions was empowering. I’ve always wanted to own my own business, and this was a way to become an owner of some of the world’s most successful companies while sharing in the profits through company dividends. Over time, I’ve come to realize that, not only am I capable of investing my own money, I’ve actually had significantly better results than many of the professionals. Another thing I’ve come to realize is that there are a lot of women that want be more informed about investing. While on a recent girl’s get-a-way, the conversation turned to investing as we sat around the pool on a hot summer’s day. Although our professional careers range from nail techs to property managers, the questions and comments were the same. How can I invest? How much money do I need? How do I know which stocks to buy? I wouldn’t know where to start but I want to learn. Most of these women have 401k’s or saving accounts but felt very intimidated by the thought of making their own investment decisions. Getting Started When it comes to doing things that intimidate us, the hardest part is getting started. But once we start, like anything else, we learn, adapt and move forward. It is no different with investing. One of the best pieces of advice I received about investing was “don’t invest more than you can afford to lose”. One could interpret that advice as “you might as well kiss your money goodbye”, but for me it provided an opportunity to learn by using a “hands-on” approach, with everything to gain and only a little to lose. In my case, I found some friends to start an investment club. We each contributed only $25 per month for quite a while. We made some dumb decisions at first, but over time, we gained knowledge, experience and confidence that led to above average returns. Once started, it takes discipline and patience to stay the course. If getting started is the hardest thing about investing, staying invested has to be the second hardest thing. We are emotional beings and when things don’t appear to be going our way, or the market becomes volatile, things become uncomfortable and we often want out. But getting out may mean taking an unnecessary loss. If we’re confident in our investment decision, and there haven’t been any fundamentals changes with the financial health or direction of the company, there is often no need to panic. In fact, women may even have a leg up in this area as a recent Kiplinger article points out. In The Secrets of Women Investors, research shows that women do more research and panic less, often outperforming their male counterparts during a downturn. To get started you’ll need to open a brokerage account. I recommend going online and checking out broker reviews or brokers for beginners. Most online brokers do not require a minimum to open an account and often will offer free trades for a specified promotional period. After that, commissions typically range from $3.95 to $6.95 per trade. I have invested as little as $50 on a single trade and as much as $1,000. Just keep in mind that the transaction fee (if there is one), cuts into your overall return on investment. Brokerage websites also offer links to investor education, research and ideas. Use Your Resources When it comes to deciding on an investment, I recommend starting with what you know. Think about companies or industries that you might be familiar with. Think about the products or services that you use on a daily basis. Are you loyal to a particular brand and do you know who their competitors are? Try to look at a potential investment with a long-term perspective. In other words, is it a company you would want to be invested in for at least five years? I have also found that by making my own investment decisions, I have a much stronger curiosity about the companies I’m invested in. For example, I noticed when the amount of cars in the AutoZone parking lot compared to the O’Reilly’s across the street. I noticed the long lines at Starbucks and CVS, and when Ulta and Costco stores started popping up in my area. It’s a curiosity that keeps me interested and always wanting to learn more. Finally, knowing what others are saying or thinking about a potential investment can provide an added level of confidence before you pull the trigger. There is a new website and mobile platform now available called Netvest, where you can do just that. What started out as a hobby, has turned into an exciting opportunity to work alongside other successful amateur investors where we share investing tips, tools and our real investments with others who want to learn more about investing and start building their own portfolios. The mobile app is super easy to navigate and also displays verified investment performance by a fun group of DIY investors. Reap the Rewards So, now for the big question. What do I stand to gain in exchange for giving up something that I really wasn’t expecting anyway? Well, besides confidence that come from experience, how about $41,000? That assumes $1000 a year for 20 years and an average annual return of 7%. Thanks to a little discipline and the power of compounding, you’ve not only managed to save $20,000, you’ve also more than doubled your money while you slept. Best of all, you’ll have actually followed through on a New Year’s resolution and will have no trouble remembering where your Christmas bonus went. Mona Carmody Mona currently serves as the Controller of Venchurs, Inc., and has gained experience in a wide variety of industries through her professional terms at Masco Cabinetry, Rima Manufacturing, and Hydro Aluminum Adrian. A college course called “Intro to Wall Street” first piqued Mona’s interest in investing; she threw herself into learning everything she could about the stock market and investment, and would eventually teach “Intro to Wall Street” herself.