Before I begin, here's a few quick things about me. I'm 21, I like the idea of making an income off of dividends, and I want to retire early. These are the reasons I'm here today and hopefully will allow me to be here tomorrow. That being said, unless you are me, and even then, I wouldn't recommend listening to me. The following wordage is just thoughts on the proverbial paper. Given the fact I have a lot of these brain things I figured I'd number/title them so I can come back later and
laugh at reflect on the old me. If I manage to make a few pennies or, hell, even if I manage to not go bankrupt, I may even do a "Things I've learned" bit. Anywho, on to the show!
After scouring hundreds of articles and finally setting up an account, here's a few tips to start with.
- You're young, there's no need to bet the farm on high risk, high yield trades yet. Go with sound choices that pay a reasonable dividend. The law of compounding interest gives you an advantage since you started early. Don't blow it.
- Trigger finger = BAD. Aim for long term investments. You are too poor to day trade and not worry about overhead fees. "I buy on the assumption that they could close the market the next day and not reopen it for five years." Says the Buffett man and it seems to have served him well.
- You still need to eat. Don't go spending your entire paycheck on trading. Again: you, young; compounding, powerful. Aim to put aside about 20% of your income for now. Once your finances have normalized then you can reconsider how much goes where.
- Learn you some! For the love of god and all things wood, don't go blindly investing without having an inkling of what's going on. Stick with what you know and learn about things you don't. It makes sleeping at night a whole lot easier knowing why a business will do well rather than hoping everyone's opinion is correct.
- Even though you're looking to capitalize on dividends, aim to buy low. Waiting a few days so that you can squeeze in a few more shares has a noticeable effect in the long run.
- Relax, the whole point of this is to get rich and retire early so you don't have to worry. It's kinda adverse to worry about being worry free.
Obviously these things seem kinda basic but I know how you think, it's easy to get too bold. Do you want the (NYSE:CEL) incident to happen again? I thought not. Stick to your guns and you'll be fine.
Disclosure: I am long CEL.
Additional disclosure: Tips given are for personal reflection and should be considered irrelevant in your investment choices. If there is anything you disagree with or any knowledge you wish to share, feel free to do so provided it is in a constructive manner.