So you think: “How could an ordinary person like me ever learn to become a successful investor?”
Well, take a lesson from this single mother of two girls who has been putting herself through university with the help of some hard-earned – and hard-learned – investment skills.
Two events awakened her need to make her money work for her: (1) Moving away from a socialist country which paid most of the cradle-to-grave bills. (2) Getting divorced.
“I went back to school and started out with some of the low-cost student loan funds plus some divorce-settlement money,” she said.
“And I learned about the stock market. I’d have a business program on while cleaning house and doing the laundry, and while I was driving. I read the business papers, I learned from my ex who was into the market.”
She felt investing on paper wasn’t as effective as committing real money: “You have to know what it feels like to make and lose money.”
She was very conservative at first, “making small profits – $200 here, $500 there.”
Her first loss – $600 – was painful. “I panicked. The first time it happens you react emotionally, rather than having a plan to follow.”
Her biggest trading loss? Around $1,200 (“I don’t remember the name of the stock.”) Biggest profit? Around $5,000 on Valeant Pharmaceuticals.
“You have to be willing to work at it, to like – or learn to like – investing . . . willing to take a risk, to use your intuition,” she said.
“Enrol in a course to learn the basics, to see how things work – and hopefully to awaken an interest in you.
“I believe you can train yourself to observe what’s going on out there, to do research, to remain calm and not go crazy watching the market every day – or you could go grey after an hour!”
And go with your strengths. “I have a knack for – and enjoy – fixing up places,” she said. “I like real estate, being able to touch it. I know I’d be good at buying houses and apartments, finding inexpensive ways to improve them, and then flipping them for a profit. But at the moment I just don’t have enough capital.”
Mike Grenby is a columnist and independent personal financial advisor; he’ll answer questions in this column as space allows. Email [email protected].
