I Did It, and Here's How!
Excerpts from an essay written in Freshman Year for English 101
One million dollars, back in the day, that was everyone's dream. That was all it took, not ten million or billion. But that back then, when a nickel could actually buy you a stick of gum at the store and pennies weren't completely worthless.The times have changed, and things have gotten more expensive. But that hasn't depreciated the amount of one million dollars. one million bucks is still one hefty amount of cash.
Many people aspire to obtain that dream, but that's not everyone's dream. It sure wasn't mine, I wanted to travel. But of course, traveling takes money. Lots of it. So in order to accomplish my want to travel,I needed money. And for a high school student(which I was at the time) to make more money than minimum wage, that was sadly out of reach. Or so I thought. As it turned out, making money wasn't as hard as I thought. Let me tell you how I reached my goal and how it can affect you!
Most people know that the people who make the most money are people who own businesses or have a million dollars in stock on the NYSE. And more importantly, most of us aren't those people. In my sophomore year of high school, I was making $6.50 an hour. And since it was a part-time job, I was only guaranteed about 25 to 30 hours a week. Now that's actually great income for a high school student, but not for me. Call me greedy, but I needed more. Unfortunately, there was no way I could own a business at my age, much less run one. I needed another source of income and another job was out of the picture.
Since I was kid, one financial fact has been shoved down my throat. If you want to save money and see it grow, put it in the bank. Well sure, why not? It gains interest and I know its a no-risk investment. But now let's hit the facts. The interest rate is horribly low. The normal saving account has an interest rate of less than 1%, and the CD(Certificate of Deposit) interest rate varies from 1-5% depending on the bank, amount inputted, and the length of the period. Speaking from experience, I caught on the starting craze of the CD and made out with a little over 5% with my CD of $10,000 for a seven month period. And what did I get out of it, $365. Hey, that's much better than the 0.3% in my savings account, but really now, for seven months I couldn't even touch that money unless I wanted to be penalized for more than I would have made. It didn't work for me, but if you want to at least get some money out of your savings, I suggest heading to your bank and asking about CDs and the high yield money market.
As for me, I turned to rule #2, if you want to make money, but don't own a business, invest. Now when I say invest, what's the first thing that comes to mind? The stock market, right? But for me, that was one of the last places I went to because I was so scared of the risks. I first looked toward bonds, government and corporate. Government bonds had a smaller rate of growth, but corporate bonds had a chance of becoming void if the corporation went under. I found out that if I had invested my $10,000 in a government bond when I was 17, it would have become $1,000,000 by the time I was 40. When I found that out, I was awed. That meant making one million bucks only involved waiting and whatever I did in the mean time only added to that. I could become a homeless bum and then when I turned forty I'd be a millionaire. Instant retirement. But then I started to think, what will one million be worth when I'm forty? There's the largest and most hateful problem for investors: Inflation. And there's also the reason why investing in banks was not a good idea. According to research, inflation was at 3% and creeping higher. What was the bank's rate? Oh right, 0.3%. So you're actually losing money by keeping it in the bank. Wow. Anyway, back to the bonds, I eventually figured that I'll find another use for my 10K and moved on. (A side calculation, if you have a newborn and get him that $10,000 bond, it will be about $750,000 by the time he/she is 20. Isn't that a great way to start off adulthood?)
In the meantime, I looked for better jobs. That's when I first stumbled across the temp agency. There's great things about the temp agency, it lets you choose jobs according to your own criteria. When you want to work, whether it was at night, during the summer, or full-time. And I heard that many people find a permanent job within the first year of working under a temp agency. So I went from job to job, looking for the job with my calling.
Going back to my hunt for mad money making, I was looking into everything. The next thing that came up was real estate. At the time, the real estate market in Florida was booming, people were becoming millionaires by selling a house. I remember one occasion in a area called Champion's Gate, someone bought a house for about one hundred thousand with a little more or less, sold it, and made away with half a million. Talk about crazy. But I didn't have one hundred thousand to begin with. Then I learned of zero cash deals, where you can buy a house for no money out of your pocket. But I was still under 18 at the time, so I stored this piece of information away for later down the road.
I was down to my last option, the dreaded stock market. High rewards, but equally high risk. I explored my options and found out about mutual funds, they're like the stock market, only with less risk involved and someone else is handling your stocks. Now this was a bank option I could go with. It had a return rate of 12% and up, much more than 0.3% or 5%. For those of you looking to invest, I suggest stuffing your beginning money in here while you learn the ways of the stock market. I did just that,while a friend helped me study the stock market, my beginning investment grew by a thousand dollars.
So with my 11K, I jumped into the stock market.I have one thing to say: if you know what you're doing, the chances of losing money are much smaller.The principles are simple,buy low and sell high, the more you have the more you make. Find out where to put your money and when, and then when to take it out. Not to mention there's a lot of help out there. I never watched Bloomberg in my entire life before I started. Jim Cramer's Mad Money, I love that show. Anyway, the point is, if you invest the time, its worth it. And most people think you need a lot of money to start. Wrong, you can start with as little as one thousand dollars. That's what I did until I got confident enough to add more. and before that I practiced on a virtual stock market to sharpen my buy/sell skills. you can find it here, if you want to give it a go. It's fun!
As it turns out, the stock market was my way to my dreams. I have enough money to buy something when I want it and get all my friends something for Christmas every year. I haven't reached that million dollars yet, but at this rate, I'm not worried.
I hope that helps get you a little closer to your dream, be it financial freedom or something else! May the Force be with you!