Putting your money to work while you sleep
Investing is how you make your money work for YOU instead of you working for money. It's the difference between trading hours for dollars and building wealth while you sleep.
People often use these words interchangeably, but they're very different:
Purpose: Short-term goals, emergencies
Where: Savings account, money market
Risk: Very low (FDIC insured)
Return: Low (1-3% per year)
Access: Immediate
Best for: Money you'll need in next 1-3 years
Purpose: Long-term wealth building
Where: Stocks, bonds, mutual funds, real estate
Risk: Higher (can lose money)
Return: Higher (7-10% historically)
Access: Varies, penalties for early withdrawal
Best for: Money you won't need for 5+ years
You need BOTH! Save for emergencies and short-term goals. Invest for retirement and long-term wealth. The key is knowing which tool to use for which goal.
When you buy a stock, you're buying a small piece of ownership in a company:
Example: Tech Company Inc. has 1,000,000 shares of stock.
You buy 100 shares for $50 each = $5,000 investment
You now own 100/1,000,000 = 0.01% of the entire company!
You make money two ways:
But remember: stock prices can also go DOWN. You could lose money if you sell when prices are low.
In 1997, if you had invested $1,000 in Amazon stock, by 2024 it would be worth over $2,000,000!
But here's what most people don't know: Amazon's stock dropped 95% during the dot-com crash in 2000. If you panicked and sold then, you'd have lost almost everything.
The Lesson: Long-term investing requires patience. The stock market goes up and down, but historically it always trends upward over long periods. Time in the market beats timing the market.
Bonds are like IOUs. When you buy a bond, you're lending money to a government or company:
You buy a $1,000 bond at 5% interest for 10 years
Bonds are lower risk than stocks but also lower reward. They're like the "steady Eddie" of investing.
These are the BEST option for most beginning investors:
What it is: Pool of money from many investors, professionally managed
How it works: Manager buys many different stocks/bonds
Advantage: Instant diversification, professional management
Disadvantage: Fees can be high (1-2% per year)
What it is: Mutual fund that tracks a market index (like S&P 500)
How it works: Automatically buys all stocks in the index
Advantage: Very low fees (0.03-0.2%), matches market returns
Disadvantage: Won't beat the market, just match it
Warren Buffett, one of history's greatest investors, recommends index funds for most people. Why? Low fees, automatic diversification, and historically great returns (average 10% per year over long term).
The fundamental rule of investing: higher potential reward comes with higher risk.
⚠️ Important: Never invest money you can't afford to lose. Never invest emergency fund money. Only invest money you won't need for at least 5 years.
This is THE most important investing lesson: START EARLY!
Two friends, both want to be millionaires by retirement:
The Lesson: Friend A invested $48,000 LESS but ended with TWICE as much! Why? Those extra 10 years of compound growth made all the difference. Starting early is more important than investing more.
Step 1: Build Emergency Fund First
Save $1,000-$3,000 in a regular savings account before investing. You need a safety net!
Step 2: Pay Off High-Interest Debt
If you have credit card debt at 18%, pay that off before investing. You can't earn 18% reliably in the market!
Step 3: Start with Index Funds
Don't try to pick individual stocks. Use low-cost index funds that track the S&P 500 or total market.
Step 4: Automate Your Investing
Set up automatic monthly investments. Even $25-$50/month makes a huge difference over time.
Step 5: Think LONG Term
Don't check your investments daily. Don't panic when market drops. Stay the course for decades.
Talk to your parents about opening a custodial account or Roth IRA if you have earned income!
Investing ≠ Saving. Save for short-term, invest for long-term. Different tools for different goals.
Time is your greatest advantage. Starting at 15 vs. 25 can mean hundreds of thousands of dollars difference at retirement.
Index funds beat most active investing. Low fees, automatic diversification, proven track record. Perfect for beginners.
Higher reward = Higher risk. Understand what you're investing in. Never invest money you can't afford to lose.
Stay the course through ups and downs. Markets crash and recover. Panic selling locks in losses. Patience wins.
"Dishonest money dwindles away, but whoever gathers money little by little makes it grow."
— Proverbs 13:11
This verse perfectly describes long-term investing! Gathering money "little by little" through consistent investing is God's endorsed wealth-building method. No get-rich-quick schemes, no gambling – just steady, patient accumulation.
"The plans of the diligent lead to profit as surely as haste leads to poverty."
— Proverbs 21:5
Investing requires DILIGENT PLANNING, not hasty decisions. Research, start small, stay consistent, think long-term.
Go to marks.money and use the investment calculator. Play with different amounts, timeframes, and returns. See the power of starting early!
Ask about opening a custodial investment account or Roth IRA. If you have earned income, you can start investing TODAY even as a minor!
Read "The Simple Path to Wealth" by JL Collins or watch educational YouTube channels about index fund investing. Knowledge is power!
Decide: "I will invest $X per month starting [date]." Even if it's just $10-20, START. You can always increase it later. The habit matters most!