Today’s guest post is from Dora DeLellis, a CPA and CFP®. She started recently writing some amazing content over on her blog www.thoughtsonthemoney.com. Her guest post today covers What I Wish I Was Told in My 20s.
What I Wish I Was Told in My 20s
Back when I first started working, I was acutely aware of my position in life. Bottom rung on the ladder of success, no savings, barely able to buy business clothing. At the time, women wore skirt suits. Yes, I’m talking about the ’80s. Having always been curious about accumulating wealth and investing, I approached a senior manager and asked, “How should I invest my money?” I was hoping for some words of enlightenment from someone that I considered to have achieved his share of career success. We depend on smart people to bestow their wisdom on the rest of us, right? I waited naively for an answer. His response was, “Pffft – buy a building in New York City.” The message was delivered with such disdain that I realized I made a huge assumption thinking that he would offer any decent advice.
Of course, as a staff person making a starting salary in 1986, buying a building was, let’s just say, not a practical recommendation. Had my senior manager put himself at my level and not been such an arrogant jerk, he might have said something like, “Buy 100 shares in AT&T.” or, “Buy 10 shares in AT&T and keep adding to it.” Even better, would have been, “Open a Dividend Reinvestment Plan (DRIP).”
Well, I did my own research and found information on opening a DRIP. Everything was in books and libraries then, no Internet. You people have it easy. (See http://www.dripadvice.com/)
Check into a few companies that are stable, like AT&T, Exxon, or Paychex. Open an account. You need to do that yesterday, if not sooner. Then keep adding to it.
The second thing I wish someone would have told me was, “Hold a stock because you never know when it will hit a growth period.” I learned this lesson the hard way. Very early in my career, one of my wealthy tax return clients was the creator of the bar code devices that scan prices and products. The company name was Symbol Technologies. When I finally had enough money to invest, I bought 400 shares at $14. Within a year (1993), I bought my house. I was single at the time and was a very nervous first-time homeowner. For some crazy reason, I had a flash of doom, where I felt that something in the house would blow up and if I didn’t have at least $10,000 in cash to cover an emergency, there would be certain disaster. My Symbol stock was bouncing between $10 and $14 at the time. I sold the stock within a week, reaching my cash threshold of $10,000.
While I was working a mundane job in a cube farm, the 90’s economy was uplifted by tremendous growth. Symbol Technologies exploded, splitting twice in eight years and ascending into the stratosphere. Had I kept the stock until 2001, I would have had 1,600 shares and it would have been worth $249,000. I could have paid off the house and had $125,000 left over. What kills me is, I didn’t even need the money. Stocks are a very liquid investment. If an emergency occurred, I could have sold the stock.
Try a New Exercise – Patience
Eight years seems like a long time to a 30-year-old, but, really, it’s a driblet in the scheme of a lifetime. Recognizing and waiting for growth to happen may seem like an endless wait, but the payoff is worth it. If my young mind hadn’t interfered with my investment goals, I would have kept the stock and simply lived my life – then been able to truly cash in on my investment.
Do Your Own Research
As far as mentors go, I think it takes an unselfish person to pass on valuable chunks of information. Be wary of whom you ask for advice. The request may not result in the exchange of intelligent concepts. Whether your research is for opening an index fund or to buy an individual stock, it pays to have simple awareness about what’s going on in the economy, which sectors are making advances, and where the growth opportunities are. I do my own research, pulling from several sources. I know I’m onto something when my multiple sources align.
My favorites are Investor’s Business Daily, The 100 Best Stocks To Buy in 2017 (by Peter Sander and Scott Bobo), and Crazy Cramer on Mad Money. From my 30+ years of being in and out the stock market, I’m convinced it’s better to be in.