I didn't grow up in a wealthy or highly educated family. While we weren't poor, my parents weren't pouring over stock tables in their spare time.
They worked hard at blue collar jobs and grew a pretty good sized garden to help put food on the table.
So, needless to say I didn't have a trust fund, no financial advisor for my family, and I didn't turn $20,000 into $4 million from the age of 16 to 17. (Really? C'mon Man!)
When it came to financial markets I knew they were in New York and I was in North Carolina.
When I first got interested in investing I knew absolutely zero about it. I had moved to Washington, DC after college and my wife-to-be and I both worked for a non-profit.
"Non-profit" didn't equal "learn how to make money in stocks" so, I did what anyone would do, jumped on the internet for some wisdom.
There was a relatively new site which had recently come online called The Motley Fool. Yes, this was in the day of the buzz, whirr, beep, beep, beep to get on the internet.
I read everything I could on the site about stocks, and then I watched as the founding brothers made stock picks. One of the brothers had gone to UNC Chapel Hill, my school, so we were like best friends (that didn't actually know each other).
They'd make a pick and within a week or two it would go up 20%. They'd make another pick the next week and the same thing would happen. I didn't know it was a bull market, and just about everything was going up.
At this time my wife and I really had no money we should have been investing. Two non-profit starting salaries meant our idea of a gourmet meal was either grubbing free happy hour food or indulging ourselves in broccoli bake. That's a can of Campbell's broccoli soup poured over broccoli and, wait for it...bake.
Somehow, and I have no idea how, because I don't have these powers today, I was able to convince my beautiful young new bride to put the $5,000 we had in the bank (which was ALL of our money) into a brokerage account.
After watching the 4th, or maybe 5th, Motley Fool pick go up 20% I knew I was onto something. This investing game was easy. Just buy their picks.
So, with sweaty palms and heart racing, did I have the right amount in the order, was it set to "buy" and not "sell". Click went the return key and, after about 15 seconds of page refresh, there it was. I had bought my first stock.
Woo hoo, now I was a player. I was "in the game." (Sorry EA, that was my term before you guys used it.) And the next week that stock went up 5%. Boom!
Then the next week something absolutely bizarre happened. The stock actually went down 10%. What?!? I had less money in my account than I started with.
I was a little nervous, but I had come across some more internet wisdom that eased my nerves. "It's not a loss until you sell it." Okay, that made sense. So I really hadn't lost ANYTHING.
I would repeat that many times over the next six months. And, when my wife asked how the brokerage account was doing I would reply "Fine, it's a long term game, we're gonna do really well." I didn't say I felt sick to my stomach every time I looked at the account, and that I tried not to look at it more than once a week.
See that six months turned into a horror show and nightmare all rolled into one. After the stock dropped 10%, the next week it was down 20% and then a few weeks later 30%. Have you ever used the "if I don't look at it for a few weeks I'm sure it will be back to where I bought it" investing strategy?
Well, I didn't look. And then I'd peak, and actually get physically ill. Because that stock, the first stock I'd ever bought after angsting over how to buy stocks, and learning as much as I thought I could....yeah, that stock went to ZERO!!
It wasn't my goal, but I proved the "It's not a loss until you sell it" statement wrong. I never sold it and was still able to take a loss on my taxes that year. WOOT!
I also had the joy of telling my wife that the trust she placed in me with our money hadn't worked out so well. It was frustrating, disappointing, and humiliating. What's the other word I'm looking for, oh yeah, it sucked.
I didn't blame the Motley Fool for picking the wrong stock. They were just doing their job, driving traffic to their site with interesting information so they can make money on advertising. I still read the site today because it's still entertaining.
I did blame myself for a lack of knowledge and for acting recklessly with our money. I felt like a loser and a complete idiot. I could have gone to Vegas and placed it all on black and it would have been the EXACT SAME THING as my buying that stock, except it would probably have been more fun.
I don't know about you, but I'm a little competitive. So after taking my beating I did what most people do after losing money in the stock market. I worked to get a job trading for one of the largest money management firms on Wall Street.
I was going to learn how the real experts made money, what their secrets were, and how they became wealthy. And that's exactly what I did.
And I can help you do the same (minus the having to lose all your money and then get a job on Wall Street part!)