I never anticipated this outcome. While I was preoccupied, my $5,000 savings more than doubled. Here’s the story of my foray into investing.
After graduating college in May, my parents began to hand over more "adult" responsibilities. Translation: I’m now managing my bills and finances. As part of this transition, they granted me access to an investment account established for me during high school.
In 2015, my dad took $5,000 from my personal savings account and invested it in a mutual fund. If you’re unfamiliar with mutual funds, they’re essentially organizations that pool money from multiple investors to invest in stocks, bonds, and other securities.
At that time, this didn’t resonate with me. Why would I care about stocks? I was merely a high school senior, annoyed that a significant portion of my savings was now tied up in the stock market, with assurances it would grow over time.
And that was that.
A delightful revelation
Once I graduated, I took control of the account. After completing the ownership transfer, I logged into my portfolio for the first time, and I was stunned.
My investment had more than doubled in just four years. It felt surreal. I had done nothing—just allowed my money to sit in the mutual fund—and it had grown from $5,000 to $10,608.
You know that advice you hear about letting your money work for you? It’s real. And it’s crucial.
Fortunately, I had a personal finance expert right at my table. I shared my astonishment with Jean Chatzky. Her reaction? “You should write about this.” So here I am.
Investing is essential
Jean understands the importance of investing—especially starting early and allowing your investments to grow. She appreciated how naturally I arrived at this conclusion and encouraged me to share my genuine surprise and success with others to highlight the potential for building lasting wealth.
That said, investing can be challenging. I recognize it may cause stress down the line. The stock market, as it always does, will fluctuate. I’ll witness my account balance fall and might feel tempted to withdraw my funds during a downturn. It’s unpredictable in the short term and unnerving to see your savings diminish overnight.
From my brief but significant investing journey, I’ve learned valuable lessons.
Focus on the long term
Let’s reflect on historical market events. Investors who endured the 1929 stock market crash, which triggered the Great Depression, eventually recovered their investments—though it took time. More recently, during the housing market collapse in 2008, which led to the “Great Recession,” the markets rebounded. Today, just over a decade later, the economy is thriving.
Consider this: if you panicked and withdrew your money in 2008, you likely ended up with less than your initial investment. However, if you held on and had faith that the economy would recover—which can be challenging, yet is vital for any long-term investment strategy—you not only reclaimed your losses but also profited. Those who continued to invest during downturns, adding funds to their accounts, ultimately benefited the most: they adhered to the golden rule of investing—“Buy low, sell high.”
Understanding the investor mindset
I always thought I’d become an investor one day, but I envisioned it differently.
Instead of obsessively tracking the markets and my portfolio daily, I’ve discovered that investing can be straightforward: put your money into a mutual fund—funds you don’t need immediately—and watch it flourish as someone else manages the details. (No more investing confidence gap!)
It’s easy to feel confident when the market is thriving, like it is now. But I know there will be moments of doubt when I might think the best option is to pull my money out. Even as a novice, I realize that’s not the way to go.
My long-term strategy involves harnessing my current confidence and using it to endure periods of market instability. I’ve learned that playing the long game is essential for success.
