My first introduction to the stock market was in my senior year in secondary school. My friends and I had formed a boys’ club we called ‘The Wealth Band’. At first, all we did was save our pocket money to buy stuff that made us look rich and cool. One day, a member of the group invited his uncle to one of our meetings. We called him Uncle Jimmy. Uncle Jimmy worked with one of these big financial firms in Lagos. I recall his loud roar of laughter when we told him the name of our club. The next thing he said made us coil into our oversized baggy jeans and Timberland boots. He said, “Y’all are no Wealth Band until you start earning real money and managing your own finances. Does any of you know how to do that?”
In the months that followed, Uncle Jimmy taught us the most important lessons of our entire lives – wealth building. He gave lessons on saving, budgeting, investing, financial planning, etc. Our last project was on stock investing. We researched different companies and then “invested” pretend money in a stock of our choice. We’d have to make note of stock prices, market competitors, and external influences that could impact the company and value. A year after, we had saved up enough money and we all decided to buy real stocks. Today, each of us owns robust investment portfolios, all thanks to Uncle Jimmy’s financial training. Here are some of Uncle Jimmy’s vital steps to help you get started on your investing journey.
1. The time to start investing is now.
2. Take your time to learn and research the various asset classes that are out there.
3. Do not invest in assets just because they are popular (especially for long-term investment strategy).
4. Start small. You are allowed to adapt your risk profile and investment strategy as you grow and become financially savvy.
5. Know when to cut your losses (Holding is a key component of long-term investing but know when it is time to really cut your losses)
6. Allow yourself room for failure. You will make mistakes but the knowledge you will gain from each experience will make you a better investor.
At Parthian Securities, we encourage everyone to take ownership of their financial life by asking questions and getting information that matters.
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