How to Learn About Investing
Normally I teach fundraising, but when I get a group of young people, I always spend a few minutes teaching them how to be millionaires. Here’s a question I received from a recent student with my answer:
Hi,
I attended the speech you gave about 2 weeks ago at UCSB and it was very interesting and gave me hope to someday be a millionaire:) Anyways, my parents have about 1-2 CDs but their interest on them are very low as compared to when they started it! They always leave in the starting amount when starting a new CD and just take the profits. In a way it’s their savings. I went home and told them about your speech and it really caught their attention but they don’t know anything about stocks or that sort of investments. I was wondering if you could tell me more info about Dividend reinvestment stocks, or if you could point me in the right direction so I can point my parents in the right direction! I would really appreciate the help!
Dear E____:
I’m so glad you asked! Thank you!
There are so many resources for help, but here are some things I would suggest:
To learn about stocks and other kinds of investing, I really recommend the folks at The Motley Fool: www.fool.com. Besides their website, they have books, available at the bookstore or online, that are really easy to understand and that have a good attitude. On their site, go to the section that says “how to invest” (button on top at the left) and then the Thirteen Steps. It’s pretty easy to understand, I think. There are also a lot of good magazines: I like Kiplinger’s — also easy to understand. www.kiplinger.com. If your mom is particularly interested, I would recommend anything by Suze Orman, but particularly her book Seven Steps to Financial Freedom. The reason why I say ‘your mom’ is that Orman writes more for women.
For dividend reinvestment plans, nickname DRiPs, I would recommend www.directinvesting.com or www.dripinvestor.com. They both have information online and through books that really explain things very simply. I like the Drip Investor book, “How to Buy Stocks Without a Broker.”
Finally, your parents don’t have to do this alone. There are investment clubs all over the country where people get together and learn how to research stocks and buy them as a group. I was in a club and we each put in $50 a month and learned how to do everything together. When I left after a few years, I had $3,600 and knew a lot more about stock research. You can find out more about clubs and also sign up for classes at www.better-investing.org. Look for local chapters or seminars, or you can study online.
Finally, I would recommend you look up “The Rule of 72″ to see how investing money at compound interest works.
Please do keep in touch. I’d like to hear how you and your parents do with this.
Best,
Kathy Wertheim, CFRE
If you have questions about fundraising, please write me, Katherine Wertheim, CFRE, at katherine@werth-it.com.