Investing 101

Learn how you can make money in today's financial markets

match contributions up to 100%. The money may be placed in a mutual fund or company stock.

If you think you don’t have enough cash to invest, think again. For example, if you spend $5 a day on lunch, that’s $25 a week, or roughly $100 a month. If you were to brown-bag your lunch, you could put that money into an account where it’s growing tax-deferred, your taxable income would be reduced, and you’d be investing in your future. Under that scenario, the $100 invested each month in a mutual fund with an 8% return compounded annually would grow to $7,602.12 within five years.

Jefferies tries to keep a healthy attitude about investing. She lost 5.6%, or about $800, over the past year, but, she claims, “I don’t take it [the downturn] that seriously.” Investing in the technology sector has hurt her investments, but, she explains, “I’m willing to take risk.”

Investing is not rocket science. Reading publications such as BLACK ENTERPRISE (call 877-WEALTHY to receive our Wealth Building Kit), The Wall Street Journal, and Investor’s Business Daily will take the mystery out of investing. Or check out from those jokers at The Motley Fool to learn about the inner workings of the stock market. The key is to find information that’s at your level. If you’re a first-time investor, read Wow the Dow: The Complete Guide to Teaching Your Kids How to Invest in the Stock Market by Pat Smith and Lynn Roney (Simon & Schuster, $14). Also, speak to friends, family, and colleagues who invest. The more you talk about investing, the more comfortable you’ll become.

William Montier, president of Complete Computing Services, a technology consulting firm in Columbia, Maryland, says he has a firm grasp of the financial markets. In August 1997, the former Bell Atlantic employee began investing in the AIM Constellation Fund (CSTGX), using dollar-cost averaging, a system through which you invest money at regular intervals over time. He began by contributing $25 per month. In July 1999, he rolled over his 401(k) account, which was worth approximately $16,000, into the Van Kampen Emerging Growth Fund (ACEGX). In August 1999, he sold his AIM Constellation Fund and invested the entire $1,700 in the Van Kampen Technology Fund (VTFAX) at $11 per share.

Montier, 36, then used the investments to make his dreams come true. Under the guidance of Martin A. Smith, a financial consultant with A.G. Edwards & Sons Inc. in Columbia, Maryland, he sold 70% of his Van Kampen Emerging Growth Fund, using $15,000 as start-up money for his business and applied $5,000 toward the purchase of a home in January 2000. He also sold his entire Van Kampen Technology Fund holdings at $23 per share for a total lump sum of $3,554.55, which covered his moving and furniture expenses.

“Since we exhausted the majority of his mutual funds for his business and home, our plans are to immediately implement an IRA for the self-employed, where he will be able to invest approximately

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