During one summer of my high school, I worked as an intern in the Bank of New York. It was my first office job in the corporate world, but it was an experience that gave me more than just a pay check. I had the opportunity to meet people who had MBA degrees and experience in the financial industry. These people had strong credentials and were earning high income. And I wanted to learn how to invest. Who else would be better to ask than these financial savvy people about investing?
I was seventeen at the time and knew nothing about stocks and mutual funds. I wanted to learn but I knew it would take time. I was all ears to the people who gave me advice. The people in the bank told me to start with mutual funds and sock money in the funds every month, even if it were small amounts. The small amounts would add up over the years. Another thing that they taught me was that stocks were the best hedge against inflation. Savings and CD interest rates would lose to inflation rates over time. It meant that your buying power would decrease over time. That was definitely not something I wanted. Stocks might be more risky, but over the long term, they outpace inflation rates.Many of the workers in the bank received company stock options. Some of the people I knew bought additional shares of the company stock in their personal brokerage accounts, because they thought the stock price would rise over time. The Bank of New York stock, BK, was in the low 20’s at the time. But their prediction came true. BK had climbed steadily over the years and traded near $60 in 2001. The stock price had come down since and is now trading in the low 40’s, but still well above the low 20’s.
My question then was, “When should I start investing?” The answers from my colleagues were unanimous. I should start as early as possible. They told me that the best thing I had on my side, despite little money, was time. They showed me the theory of compounded interest.
After hearing that, I took all my life savings and put them in an interest-bearing savings account. But granted my early action, after I ran the numbers, the interest earnings were disappointing. I started reading up on mutual funds, and eventually stocks. I didn’t have much money or time in college to follow the stock market so I did not actively participate in the stock market. Regardless, I continue to read and study the market whenever I had time. Then when I started working full-time and was getting a pay check regularly, I put some money in the stock market.
I looked for small companies with high growth potential and were undervalued. I played the buy low and hold until it goes higher game. Since I was in the tech field, I concentrated in tech computers. Fortunately, the tech industry started to rebound after the crash.
I started with $2,000 at Scottrade. Over the years, I added money to my investing account from anything I can get my hands on — my savings, pay checks, bonus money, and even interest-free loans. My investment account balance grew from my deposits and profits. Now, almost ten years later from my internship, I am managing a $100,000 portfolio.