How To Use $100

How to Use $100

For this newsletter to serve you well, we really need to go back to the beginning.   

Remember when you were fresh out of college and making just enough each week to have a few dollars in your pocket.

Remember what it felt like in your 20s where you could skate by and maybe pick up a few more shifts here and there if you needed it. Or, maybe crash at moms house for food and a good sleep before tackling the world again.

Remember when the basic bills were all just for a single person with start up rates.

Those days you felt poor.  But, you had energy and youthful optimism that if you just kept hustling you could figure it out.   

For our first series, we are going to analyze the markets from where things sit right now and if you forced yourself as a young person to put $100 away every single month no matter what.   

Back then, it felt impossible, and nowadays the consensus is that it is impossible but if I had a time machine, I would work really hard to persuade my younger self that no matter what, put that money into something that you see potential in.   

It’s easy to get bogged down with whether a savings account or treasury bonds or an index fund makes the most sense to start out safely.  And, if there is a $1000 first funding requirement or minimum baseline, the wall seems even more impossible.

So, we break it down.   You cannot use age old wisdom on start up values and you cannot use startup values when focused on age old wisdom.  So, you must separate the two and for your first lesson, truly understand diversification.   

Your first rule is:  Do not put all your eggs in one basket but if you have only one small basket and one small egg then you must start with all your eggs in one basket.

The first general understanding is that for most people the stock market and investment is overwhelming.  There are so many companies, where does one begin.  And what if I lose money?

Your second rule is:   You will lose money.  Accept this on your path.

Once you get over that, now you can move on to the grandiosity of the largest poker table in the world.   P.S. (learning poker during this time would be an excellent strategy in life)

As a young person, you have an advantage.  The youth are on top of the latest, greatest things.  The youth are where the advertisers spend most of their money.  Youth are more fully aware of startups and innovations that will build toward the future.

If you had been around when Amazon first started, you would have loved it.  You would have had the energy and technological savvy to enjoy experimenting with it as it began. 

There is no way for you to have known it would become such a huge monster but the sheer excitement and newness of the possibility of future shipping of books would have kept you online shopping more than your parents ever dreamed.

There is your clue.

Your third rule is:   Invest money in the companies that you spend money with.

This is key to moving forward in your first steps into investing.   What companies stand out for you in their culture, customer service, product, ease of use, excitement, usefulness and practicality for day to day.   Do not try to guess which companies will become great.  Find the ones that are great right now.

Let’s see where we are right now with the youth.

Take some time this week to ask young people what they like and where they shop.   Also, dig into these companies and see the money flow and how they are connected.    Or, are there new companies you are totally addicted to right now.

Time to put a few dollars in.  Or find similar rivals that have lower stock price to get that $100 going.

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