Investing for Beginners
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Unless you’re a stockbroker, the stock market can be a mystical and oftentimes intimidating landscape to navigate. You’re just trying to put some money away for retirement, because that’s what you’ve been told to do. You didn’t know you were signing up for a bombardment of decimals, percentages, and terms like “initial public offering” and “pink sheet stocks.”
On top of all the intricacies of the market, you must come to terms with the fact that your money isn’t guaranteed to grow. Investing begins to feel like gambling, and you’re playing in a casino that doesn’t speak your language. But, with the right know-how you can bet on your future and mitigate the risks.
To help us better understand the game—and the odds—we called on financial expert and educator, Dyalekt. Dyalekt can be heard speaking about financial wellness on the podcast Brunch and Budget, as well as on the conference circuit. It’s time to ante up!
*The information below should not be construed as investing advice in any way.
Get Invested—Get in the Game
Pocket Your Dollars: What would you say to people who are nervous about investing in the stock market?
Dyalekt: This is a personal feeling–I do not like the stock market. I think the stock market is a bad thing. It does not work. It makes companies do things outside of their mission and sometimes they’re terrible things and sometimes they’re innocuous things.
Either way, it’s working for the quarter rather than the actual mission of the company, which I just think is not great. That being said, if I want my money to beat inflation, I need to invest it. For folks who don’t get inflation: if you leave your money in a box and it doesn’t gain any interest and it doesn’t make any money, then your money will then be worth less in 10 or so years because of inflation. If I want my money to still be worth something, I should be investing.
Some people think, “Well, I don’t know about investing in the stock market because to be fully diversified you need to be invested in thousands upon thousands of companies and that means being invested in companies that I don’t like and companies that do unethical things,” and I feel that. I think those feelings need to be acknowledged.
This is the journey I went through: I looked at the purchases that I made and realized because of the semi-monopolies a lot of companies have, and because certain goods are necessities, a lot of these companies are already getting my money. If they’re benefiting from me, I should benefit from them.
I may have a problem with BP because they’re a bad oil company—they’ve done this and they’ve done that. But when I’m on “Empty” on the highway and they’re the only gas station there, what am I going to do? So if I’m already part of the game, I need to act like I’m in the game.
Don’t Gamble, Diversify
Dyalekt: Now, the thing about investing is that it’s not gambling. Well, it can be like gambling, but that’s not what I think is useful about investing. I’m very into the idea of using your investments as long-term plans for the future.
When it comes to the stock market, I remember I was at this one function where this guy was trying to tell people how they should start investing to get themselves out of poverty and he was like, “These kids out here buying these Nike shoes. Instead of buying one Nike shoe, buy one Nike stock.” For conventional wisdom, that is considered a smart thing to do, but they don’t understand the volume of Nike stock you need to buy to start making money off it.
When it comes to the way that we’re educated on stocks, there’s this idea that if you hop on the right train, it’s going to take you to “Rich Town”. If you had bought Google at the right time, if you had bought Apple or any of the other superstar celebrity companies at the right time and saw how it grew, then you would have been great. What we’re not understanding is that even if you’d bought these stocks when they first came out, you would have needed to have serious money to put in to be making serious gains.
Diversification matters because of risk and what risk means. This is again why investing can feel like gambling when we’re stock picking because it’s, well, just straight up picking and betting on which one works and which one doesn’t.
When you have 10,000 companies that you’re invested in, you’re not worried about, “Well, am I going to lose all my money because this company went out of business?” Because if 10,000 American companies go out of business, I mean it’s The Purge. It’s just anarchy in the streets. What you’re betting on is the American economy. Or if you’re invested in global stuff, you’re betting on the global economy.
Maybe one of them will be the next Google or maybe all four of these companies will fold, because four companies could fold and that would be fine.
There are people who will always think, “But I know this insider thing and I can beat the market.” You probably can’t because there are people whose entire job is to make sure that they beat you on it. I’m not saying that you’re not smarter than them—maybe you are smarter than them. Maybe you’re just as smart. But you’re going to have to spend your career doing it, just like they do as a job.
I had a roommate who was a graphic artist. He made characters for video games and in my whole time knowing him, he only ever sold one character. It’s not because he wasn’t talented, it’s because his side gig was trading currency, which is not exactly the stock market, but has very similar things going on. He was like, “Oh, I’m going to have all this free time to create my characters and just make my money trading currency.” He spent 18 hours a day on that computer trading currency and was basically breaking even. The thing about gambling: the house tends to win because they build the house.
Setting Your Investments Up for Success
Pocket Your Dollars: I want to be sure I was investing and not gambling, so what should I do right now?
Dyalekt: For new investors, the first thing to do is make sure that you have your savings together. Make sure you’re good. Once you have your savings together, you can start thinking about investing because investing is not a cheap thing.
There’s a great Tribe Called Quest line where it’s like, “I had my cash mixed, my rent due, my play-dough.” Know the line between those things and make sure you have savings because folks will always tell you, “Put your money in this, put your money in that.” Usually the people who are saying that are people who get paid if you put money into it. Make sure you have money available to you.
The thing about investing is the money you make or lose is only real when you pull it out, and people don’t think about that enough. When the big 2008 crash hit, everybody who left their money in the stock market were fine. The markets bounced back and have continued to rise since then. But if you had to pull your money out because you needed your money, that’s when you lost money.
So make sure that you have that cushion. That’s how you make sure you can be in control. When stuff happens–because stuff always happens–you’ll be alright and you can ride it out.
Caring About Money & Yourself
Dyalekt: The thing about budgets is just like everything else: if it’s not based on your desires and what you want out of this world, then it’s not going to work. You’re going to look at these numbers and they’re going to be alien to you. I mean, talking about money personalities, again as a Money Monk, my eyes have literally glazed over.
Pocket Your Dollars: That sounds hilarious considering the conversation we’re having right now.
Dyalekt: Right. I really do believe that as educators, any of us can get down with any sort of subject as long as the entry point is something that focuses on what we want out of it. I don’t really care about money like that.
On a personal tip, when someone showed me that I needed to care about money so that I could deal with community upliftment and create art that’s helpful to people, I went all in because it mattered to me.
Pocket Your Dollars: Yeah, it’s not scary at that point. It’s something that I can wrap my arms around and do something with. I can shape it for myself.
Dyalekt: Yeah, it’s not scary and the thing that you would place your fear on becomes something else. You place it on yourself. You’re not even worried about you at that point. When we work with folks, especially with young folks, we ask them, “Well, do you want to better yourself and make your life better?” they say, “Ah, well I’m okay,” because we’re all humble and we all have imposter syndrome. But when we ask, “Do you want to help other folks?” their eyes and ears perk up.
Pocket Your Dollars: That typically starts with helping yourself out.
Dyalekt: Yeah, that’s been the big thing in the last year. I’m really pushing on folks to make sure that our foundation is secure before we start building.
Pocket Your Dollars: It’s the basic airplane rules: If oxygen gets out of the cabin, the first rule is put on your own mask.
Dyalekt: Yeah, put on your oxygen mask first. Really everyone put on your oxygen mask first before you help other people so that you can help other people.
I say it a lot because I have to tell myself that. I have definitely been the person where I had $100 in my account and someone else needed $75 and I was like, “Sure.” I know how that goes and how you think you’re doing something good and you think you’re helping people. But if you put yourself in a place where then you need to ask for that money from other folks, then everybody’s crumbling all around each other, rather than building each other up.
About MC Dyalekt
Dyalekt is an MC, educator, and playwright, usually all at once. He is based in Brooklyn, NY and has been a part of the NYC Hip Hop scene since 2003. He toured his first solo work, Square Peg Syndrome, throughout Europe, which led to him being named to The Public’s Emerging Writers Group in 2013. The album/one man show is also a 6-week curriculum on identity and literacy, piloted in 2008 in his hometown, St. Croix, USVI. He is the Director of Pedagogy for Pockets Change, a Hip Hop + finance youth organization, and has taught thousands of students. His most recent work, the Museum of Dead Words, is a Hip Hop theater show on communication and empathy in the age of the internet. He is a podcast host for the Race & Wealth Network and keynotes on how art, culture, and media are used to perpetuate racial wealth inequality.
Opinions & perspectives expressed in this article are those of the guest contributor and not necessarily Pocket Your Dollars.