Well my friends…today is a special day. I recently had a reader named Andrew reach out to me with a really cool request. He’s a high school student, and he wanted to share his story on M$M to fulfill a requirement for one of his classes.
Now if you remember, waaaaay back when I started M$M (actually just three years ago ha), I was a high school band director! The whole reason I wanted to start this thing was to teach young people how to avoid student loans like the one I had and get excited about personal finance early. I started out by teaching personal finance lessons to kids during their advisory time because the curriculum that the school wanted me to teach was ridiculously lame.
I didn’t even know what Andrew wanted to write about, but I knew I was going to let him do it as soon as I opened his email. I get these requests every once in a while, and now just felt like the right time to encourage a young person to take their shot and reach thousands with their message about money.
So enjoy! Please show my dude Andrew some love in the comment section – I think there are some valuable life/investing lessons that we can all share with him. Not often you see a high school student care about personal finance. This post actually reminded me of a student I had who kept swearing he’d get rich via penny stocks and preached to me about how incredible they were every day (sadly…he did not become a penny stock millionaire but it wasn’t for lack of trying haha). ~M$M
Everyone has had the dream–the dream of ‘making it’ without making it into the real world. The dream of achieving ‘success’ while still in school, in the ways that Bill Gates, Mark Zuckerberg, and Steve Jobs had. The question for most is how to actually make change – how to create something out of nothing.
Though everyone is told to “work really hard” to achieve this form of success, nobody ever explains where to start, and what to “work really hard” at. To find answers to these questions, I, similar to many kids across the United States, scoured YouTube for success stories, finding numerous accounts of kids who ‘made it’ through investing in the stock market.
Naturally, I was intrigued.
Being 13 at the time, I had no income from any jobs, relying on the $20 here and there from birthdays and special occasions.
Throughout my whole childhood, I managed to collect and maintain roughly $500. This money was sacred–a means of connecting with the real world, and in my head, freedom.
However, after watching videos illustrating child prodigies who have made millions of dollars from less than $1,000, the only thing on my mind was the upside of investing.
Never did I contemplate the possibility of losing this money.
I had a simple problem, however. I had absolutely no idea how to start investing, or the actual methods required to interact with Wall Street. Yes, I understood that if you invest $100 in a penny stock that increases 1,000%, you will be left with a $1,000 investment and that ‘shorting’ stocks are essentially the opposite.
So, I went to my parents for help. I knew that my dad invests frequently, and I made the connection that he would likely be able to set me up with my very own brokerage account.
After some persuasion, my dad and I drove down to the local TD Bank and opened a custodial TD Ameritrade account under his name (as it is illegal to self-invest until you are an adult).
We then linked a TD Bank account to this brokerage account, and I deposited my life savings ($500) into the bank account. We then configured the online side of things, logging into my Ameritrade profile at home, and finally, I had full access to my very own brokerage account.
I felt like a teenager who just got their JOL, as the utter freedom associated with being able to steer my investment in any which way I wanted overwhelmed me. I knew I had to try ‘driving’ my investment by allocating it into a penny stock with a large upside.
I just didn’t know which one to choose, as there are thousands upon thousands of public startups.
Ironically, my friend began investing at the same time, and we went on a search together to find such a stock. One day, he showed me the news reports of a biotech company that he found, who stated that they would be able to print 3D organs and make huge advances in their area just with the help of Wall Street. In fact, they weren’t the only ones making this claim, as various investment sites vouched for their inevitable success.
In our minds, there was really no reason not to invest, as this stock seemed perfect in every way. We both agreed that this stock was a great choice and plowed our money into it.
I went to sleep that night excited about my accomplishment, knowing that was my first successful investment.
I knew I would tell my friends about my accomplishment and reinvest the money I will make into more penny stocks, eventually making thousands upon thousands of dollars. I saw myself in high school, buying myself a new sports car and interviewing with news stations about how to make it on Wall Street.
The next day at 2:30, I opened my TD Ameritrade app and saw “-16%,” the red invoking panic and feelings of strong discontent. When I sold my shares the next day, I was left with a humble $200 in my bank account. I told my dad about this and assured him that I will never be investing again. He seemed to like this idea.
After a little while, we looked into the penny stock and tried to figure out why it was such a lemon. Turns out, most of the money that the company raised went to the executive salaries, with only a small portion going to research and growth.
This information was found by doing an advanced search in Yahoo finance to find their complete balance sheet. In no way whatsoever was this information easily available to the public who had no prior knowledge of investing.
Thus, as such information was available, it is clear to me that making smart and profitable decisions on Wall Street is possible but requires a certain knowledge on the evaluation of companies and complicated market trends.
Personally, I plan to put aside investing with my own money for the time being and spend more time learning from people with more investing experience than me. Hopefully, by the time I am nearing the end of college, I will be ready to invest for real and create a better future for myself.
If you don’t know how to set up an investment portfolio, it is better to stay out of the markets and learn from those with more knowledge than you.