Navigating Early Investment: Lessons from a Young Investor
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Chapter 1: A Teenager's Venture into Investing
Recently, my 15-year-old son decided to dip his toes into the world of investments.
His journey began with a few hundred dollars of his own savings, and I contributed an additional hundred to fuel his enthusiasm. He purchased shares in several companies and allocated some funds towards Bitcoin and Ethereum. In the initial days, one of his investments soared over 200%! This was with the Chinese company Ostin Technology Group, which had just gone public. His excitement was palpable; he constantly checked the investment app on his phone, sometimes even waking in the middle of the night to track his path to potential wealth.
However, the excitement was short-lived. Ostin’s value plummeted due to the impact of Covid in China, triggering a market downturn that affected his entire portfolio.
Section 1.1: The Reality of Market Fluctuations
Currently, my son's portfolio, which includes Bitcoin, Ethereum, the S&P 500, Facebook (Meta), Costco, Tesla, and Coca-Cola, is down by 45%. The thrill of checking the app has faded; in fact, he recently expressed his disillusionment, stating, "Investing in stocks and cryptocurrencies is a scam."
Subsection 1.1.1: The Shift to Entrepreneurship
In light of this experience, he is now considering a part-time job to earn some money and explore starting a small business selling items on Amazon. I was impressed with his understanding of Amazon's fulfillment services. "Start small," he advised. "You don’t need anyone else's money, and you can minimize potential losses compared to investing."
Section 1.2: Lessons Learned
This perspective is remarkably wise—no hint of sarcasm here. My own experience has been different; I've never ventured into stock market investments, choosing instead to focus on spending and pursuing various endeavors, albeit with my fair share of mistakes. If I had adopted a mindset of starting small without relying heavily on external funding, I might have achieved greater success in my business pursuits. However, it’s uncertain.
What is clear is that my son has gleaned valuable insights from his initial foray into investing, despite the setbacks. Perhaps we should consider starting a business together.
Chapter 2: The Value of Experience
This video titled "How Two Sisters Grew a $16,000 Stock Portfolio By Age 11 & 13 By Investing With Custodial Accounts" showcases how young investors can learn and grow their portfolios.
Another insightful video, "How To Invest For Teenagers," provides guidance on foundational investment strategies for young adults.