How I Started Investing In the Stock Market

By | March 6, 2007

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.

15 thoughts on “How I Started Investing In the Stock Market

  1. Smarty

    I got the internship through my high school. I was probably the youngest person in the company. I needed a working permit at the time, but that wasn’t a problem. I had been working since 14.

    Reply
  2. Aaron

    I can’t believe it but that is very unheard of. you are very different than the average person

    Reply
  3. Smarty

    Aaron,

    What do you mean? Am I different because I started working at 14 or because I was an intern at 17?

    Reply
  4. Aaron

    Thank you for the quick responses! It is extremely hard getting an internship here at college, so much competition. Interning at 17 is something I am amazed at.

    Reply
  5. Smarty

    What college do you go to? What do you major in? Have you tried your college career office or jobsites like Monster.com? I worked throughout most of my years in college.

    Reply
  6. Aaron

    I’m in Philadelphia at Temple University but I am sophomore year majoring in accounting. This summer I really want to work though as I have a really bad school schedule right now, but there is so much competition and I have only held 2 real jobs in my life. Our business school has a job website but I only had 2 interviews. In that experience, there is a lot of competition for them so I did not . I will look at my college career center though!

    Reply
  7. Smarty

    As an accountant, you will be in demand wherever there are taxes involved. I have a lot of friends in accounting and they get a lot of job interviews here in NYC. Perhaps you should take a look at the job positions in NYC when you graduate.

    Reply
  8. Smarty

    I had job offers throughout my college years but only during the last semester of my sophomore year did I decide to start working.

    Reply
  9. Aaron

    Thanks for the advice. Just by talking to you on your blog, I think I’ll try again! I think I’ll take a look at the career center. Things are tough because I feel I am not doing enough for my resume or my bank account, almost a guilty feeling.

    Reply
  10. Aaron

    I also wanted to add that I love your blog. I have been reading a lot recently. I also read a lot last year when you were on blogspot and then took a break from everything. I am enjoying learning all the investment information! I like that you are not just into stocks but also real estate!

    Reply
  11. Smarty

    No problem. I hope it helps. Send me an email if you have any more questions, or post on my blog like you did. Starting off from a small bank account and little experience is tough. You’ll get through it. I’ve been there, and I’ve gotten through it. I’m used to being the underdog.

    Knowing what you want is most important. Then plan and execute.

    Reply
  12. Smarty

    Thank you for your comments. I’m glad you’re a loyal fan. I’ve come a long way since I started my blog but I still have a long way to go. I invest in many different ways. I started in stocks, and have expanded into real estate. Very soon I’ll be doing my own business. Stay tune!

    Reply

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