Cents and Sensibility
I’ve always found that the fastest way to get myself depressed is to look at all the stuff in my room and then figure out how much money I would’ve saved if I hadn’t ended up buying all those things. This year, I made the ill-conceived resolution to not spend any of the money I earned from my day job on frivolous purchases like expensive food and bags or random accoutrements that enable my hoarder tendencies. I spent a lot of my time researching ways to save for those who are biologically unable to keep money in their pockets and discovered a potentially lucrative loophole — I decided to start investing in the stock market and decided that I would begin impulsively buying stock instead of sneakers.
Admittedly, I did not dive into the world of stocks headfirst despite my natural pretending-to-know-it-all demeanor. A lot of research went into deciding where to spend my money and how much of it to actually blow on numbers on a spreadsheet but when I started, I couldn’t stop. The material is daunting at first. It’s easy to get overwhelmed by graphs and terminology, but at the end of the day investing in stock, much like the purchase of anything else, is based on feels and how much you really trust a certain company to not crash and burn and squander your money.
Nothing looks better on an investment portfolio than having stock. Think of it as the Chanel flap bag of finance. Basically, owning stock means you own a small fraction of the company. A brokerage firm is hired to do the bidding for purchasing shares — this is called equity and it makes me feel really, really uppity to say that I own some. Diving into the deep end of penny stock trading isn’t what trading stock is really about. You don’t have to “Wolf of Wall Street” it on Day One, even if throwing piles of money off a yacht is a ridiculously alluring trade-off. There’s no shame in going slow and starting with indexed blue chip stocks like big guys who are assumed to be too big to fail.
A common misconception about stock trading is it’s a quick way to win big or lose even bigger. While that is a valid fear, investing in stock is a long-term option. You aren’t necessarily meant to ride or die along with the company you choose to invest in. Most brokerage firms have a six-month holding policy for your funds so you can at least gauge some growth, but great returns are only seen three to five years down the line. Not to mention, it’s a lot easier on your heart to disregard dips and sharp rises of day-to-day trading and reap the future benefits without worrying too much about it.
At the end of a holding period or financial year, you are handed a check for dividends if you have some. These are excess earnings your shares make if they have grown in value since you purchased them. And with that, there’s extra money to spend on impulse shopping whether you choose to impulse buy more stock or a new set of sunnies to shade your eyes from all your new, glowing wealth.
If you’re still a bit iffy about DIY stock-shopping, you can opt to get yourself an equity fund that you can regularly dump money into via your banking app when you feel the urge to shop. This is how I started. I got myself a full equity fund where a team of numbers people did the thinking for me. My money is invested in the biggest Philippine companies and are transferred into less risky funds once they feel like things are about to go sour. Now when I’m at a mall and feel the need to go buy shoes or maybe another set of plain paper notebooks I frantically access my app and buy shares before I stuff my room with more things I don’t need.
The funny thing about money is that we work so hard for pieces of paper and numbers in a system. So when the financial sh*t hits the fan and the numbers sharply fall to zero a lot of people panic-buy luxury items that cannot be taken away by the government and hopefully have a lot of resale value once things get a bit better. Take for example that when Greece’s economy failed, Chanel and Apple made a killing as they reported record sales during the worst possible financial situation. And I would hazard a guess that frivolously spending money on those items can just make you feel a bit better that you spent your money while it had value instead of trying to save money that’ll end up being scratch should things fail to look up.
I started getting interested in buying stocks because on the surface it just felt cool that I owned a super tiny piece of every stapler or paperweight in a company HQ. Like, “Hey, guy at Apple, see your stapler? You’re Welcome.” It also appealed to me that if a company failed but showed promise of getting back on its feet, I could exploit buying super cheap stock on top of what I currently owned and sit back and relax as it takes me back up a couple of commas more in my bank account without lifting a finger.
And besides, tweeting about stock comes with a cooler $ tag — which gives the # a run for its money.
