INVESTING: MANSPLAINED

By Jeremy Cogswell

Investing: getting rich by doing nothing. Sounds great right? It’s not as easy as it looks, but I’ll make a simple guide that even an idiot could understand.

The number one rule of investing is that it takes money to make money. I suggest asking your dad for a small loan of a million dollars. Although any amount of money invested can grow large over time due to the power of compounding. If you have the money, real estate is the way to go. Take advantage of the tax laws written by real estate investors. However, if you’re still lacking millionaire status, investing in stocks is the easiest way to get there.

What is a stock?

Stocks can be described simply as small pieces of a company. By purchasing a unit of stock (commonly referred to as a share) in a company, you become entitled to a portion of the company’s assets and profit.

How do I make money?

You can make money from owning stock in a company in two ways. One way is the company declaring a dividend to shareholders. A dividend is when the company directly pays some or all of their profits to shareholders. Most companies pay dividends quarterly (4 times a year). The second way you can make money is share-price appreciation. If the company is performing well, other investors will view your piece of the company, and its rights to the company’s profits, as more valuable and you will be able to sell this ia’s civil war.

The U.S. House of Representatives approved a resolution mourning the deaths of the many citizens that passed away and awarded the heroic effort of the healthcare and rescue workers. Many citizens have also been mourning in their own way. Thousands of stuffed animals were thrown on the field at a Besiktas soccer game in Turkey to honor the many children that had passed. Fundraisers all around the world have been established to contribute to repair the many damages.

Despite aid to the region in the immediate aftermath, over a million people are still homeless and awaiting help. Thousands of people whose homes have been destroyed must rely on humanitarian aid to survive. With millions of tons in rubble it will be many years before Turkey and Syria can rebuild and repair the damage of the disaster.

Art by Unity Jirkovsky-Gual

stock for more than you paid for it.

How do I get started?

You need to be 18 to open your own investment account. However, if you are under 18, your parent or guardian can open a custodial account for you. This account will initially be under your parent or guardian’s name, but control will be transferred to you when you come of age.

How do I choose what to invest in?

An investment strategy that has stood the test of time is buying great companies at fair prices. Think of a great company, or one that you believe to be well positioned for the future. Say you are an iPhone user and want to invest in Apple (NASDAQ: APPL). Apple makes the best phones, they are obviously a great company; but how do you tell if Apple is fairly priced? One of the easiest ways to gauge if the price is fair is looking at the price to earnings ratio (P/E). This is simply the company’s total value divided by their profit in the most recent year. The lower the value, the more money the company is making relative to its price, and therefore the better for its investors. A common range of P/E would be 20-28 with anything lower being cheap and anything above being expensive (Apple’s P/E is ~ 25).