GameStop + How to Take YOUR Next Step To Invest
Were you caught up in the story? Wondering how you missed out? Wondering what all the terms mean? Short Squeeze is a new one for me!
Gamestop was the big story a few weeks ago, bringing the topic of investing into the public conversation. I am not (nor do I have any interest in being) an investment advisor - but I do think it is an important moment to step into this conversation from my perspective, and perhaps give you a few "next steps" if the recent events have made you want to learn and understand more about investing.
When we understand we are empowered to take new action. I am interested in YOU taking intentional action towards your healthy financial future!
Investing has an aura around it; an aura of complexity, risk, and intrigue. There is also a perception - and reality - of exclusion; this is something the "wealthy" do, understand, and benefit from.
When you don't seem to belong, it is less likely you'll participate.
This was what captured the imagination of the country; the reddit users who participated and turned the system - at least temporarily - upside down.
In case you are among the 47% of Americans who are not participating in the stock market, I want you to know that there are ample ways to do so now - ways that don't involve this speculative (aka gambling) strategy. (Gamestop hit its peak on 1/27 at $347.51 a share. Today it is down to $49.68/share). I have lots of resources below for you to start - or accelerate - your own investment strategy.
There are many ways to participate which are lucrative - if perhaps a little boring; ways that don't require you to understand all language or jargon. Ways that ensure you will reap the benefits of compounding interest over time (it really is magic and well worth playing around with calculators to see! play around with a 6-8% interest rate).
Like planting trees, the best time to start is yesterday - but today is pretty great too. Turn any thoughts or feelings of "man! why didn't I have some gamestop stock!" into your call to action. It can feel overwhelming, but trust that you only need to know the very next step - there are people who can help you. Reach out to them. Ask the questions - don't be embarrassed. We weren't taught this stuff, so why do we think we should already know it?
Let's collectively all normalize not knowing and focus our attention on learning new things!
While we are at it, let's drop the aura of mystery around investing. That just keeps it out of reach for too many. Let's believe it can an inclusive, generative, and lucrative option for all. It could be that... (the podcast below has a very intriguing option) we could imagine a new way into reality. We could demand alternative models to regulate the corruption that has existed on Wall Street for too long.
After all, it will be our money, invested intentionally, that could shape the future of our economy.
I hope this helps nudge you towards participation in your own investing journey - your future self is gleefully thanking you right now.
Take care and thank you for being here (especially here, at the bottom of a longer than intended newsletter!),
Megan
P.S. I really appreciated this DEEP BACKGROUND podcast about Gamestop. It is an excellent read on the David vs. Goliath narrative that has emerged. It provides context of recent Wall Street / government (non)regulation and an alternative model to regulate the market that is very intriguing to me... You may enjoy listening as well!
INVESTING Next Steps
It is easy to feel overwhelmed just looking at this list! The list isn't going anywhere. You will be best served if you take deep breaths and just get curious and playful about it... that will keep the needed momentum going.
Focus on one primary action step, then move to the next if / when you can.
[Just a reminder - this is a very brief list, see it as a launch pad for your continued learning. None of these are affiliate links, just to be clear on that ;-]
Start Here!
First - DETERMINE A CONTAINER
These are all the CONTAINERS where your investments will live. Each is "tax-advantaged" differently (I have provided links for you to learn more about each)
- If you are employed, make sure you are enrolled in your company's 401k or 403b plan (You aren't? Great! Contact HR to get enrolled asap!)
- Contribute up to your employer's match (Don't know what the match is? Great! Call HR or look online to find out! Then bump yours up to get free money!)
- If you are Self-Employed, you can set up a SEP IRA and contribute up to 25% of your NET profit (Don't have one yet? Great! Look at some places to set one up below!)
- If you don't already have one - and you qualify - you will want to set up a Roth IRA (Don't know what this is? Great! Learn more here!)
- If you have already maxed out all of the above, and still have funds to invest, awesome! After that you can set up a non-tax advantaged investment account too. You have lots of options at this point and may want to consult with a professional.
Next - OPEN an ACCOUNT at an Institution that will HOLD those CONTAINERS
Here are some account options
Less Well Known:
Well Known: Vanguard, Charles Schwab, Merril Lynch, Fidelity, etc...
You can always move your money to a different institution, you aren't married to one forever, and it is great to have all your accounts in a place where you can see them all together. Better to start than to agonize about making the "best" decision you could ever possibly make and delay it another year or two.
Next - DECIDE (or get help deciding) WHAT WILL GO IN YOUR CONTAINER
When you contribute money, either from your paycheck or directly, it can then be invested in any number of the following ways (again, this is the start of your learning, not an extensive lesson)
Typical TYPES of INVESTMENTS will be...
- Stocks - more risk / reward - you buy a fraction of a company and realize a proportion of its profit (or loss)
- Bonds - less risk / reward your money is loaned to a company or government; you make money on the interest the entity pays you for borrowing the money
- Alternatives - gold, real estate, etc... (there may be some of these funds within a fund)
- Target Balance Date Funds - Diversified and Rebalanced as you age, a true "set it and forget it" option
- ETFs - Exchange Traded Funds
- Mutual Funds - Actively selected assortment of funds that are a diversified pick of stocks, bonds, alternatives by a manager (higher fees)
- Index Funds - Assortment of funds in different "asset classes" that are chosen by computer intelligence (lower fees)
- Interested in Socially Responsible Investing (aka IMPACT investing)? As You Sew is a wonderful place to check out options that are in alignment with your values and vision for the world you want to live in.
The end goal is always a diversified portfolio that mitigates risk while maximizing growth - i.e., not Gamestop ;-)
FINALLY - AUTOMATE money Flowing into your account!
NOW - Set up AUTOMATED monthly contributions in an amount that feels doable...
THEN! Increase these on your birthday, the New Year, when you get a raise, etc.
Do you feel a bit more empowered? I hope so!
