Birthday Bonanza: Part 2 of 8

In this second installment of my “Birthday Bonanza” series, I am going to discuss why it is better to invest $1000 in the stock market for your child when he or she is born, rather than in a savings account or the like.

Why stocks instead of a savings account?

If you’re like the average American, your view of the stock market might be – shall we say – jaded.

Most Americans view the stock market in the same manner as they do Las Vegas.  They think of it as a casino, or a crap shoot.

Maybe you think that it’s only for the wealthy, and not for “average Joes and Janes”  like you.

A savings account, on the other hand, is widely considered a very safe and secure investment.  It’s backed by the FDIC, after all.  So even if the bank becomes insolvent (goes bankrupt), your account is guaranteed up to $100,000.

Here’s the problem with savings accounts, though.  They’re not as safe as you think.

Here’s why.

When you deposit $1000 in a savings account, at the end of the year you will have $1001.

In the meantime, the price of goods and services we use every day will continue to rise. 

$1000 in a savings account over an 18-year period – from the time your child is born to the time he or she turns 18, at current interest rates – won’t even generate a return of 10 percent.

On the other hand, if you invest $1000 in the right stock over an 18-year period, you could make 10, 15, or 20 times your money – or even more!

Is there risk associated with investing in stocks?  Absolutely.

But the potential reward makes the risk worth taking.  Wouldn’t you agree?

Tomorrow night, I’ll talk about how to go about investing $1000 in the stock market for your child to set him or her on the road to a wealthy start in life.

Stay tuned!

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)

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10 Shares Is All It Takes!

I can’t stress enough the importance of investing in the stock market to build real wealth!

It remains the best kept secret out there.

This morning, I’m going to show you how investing just 10 shares at a time can build you a small fortune.

Success stories like Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Netflix (NASDAQ: NFLX) are not easy to find.  But they do exist.

All you need is to do some research, have an open mind to what’s possible, and take minimal risk.

Let’s use Apple as an example.

Let’s say you wanted to start investing in January of 2003, 15 years ago, and you decided to start buying Apple, 10 shares at a time:

  1. January 2003: 10 shares @ $14.33 = $144.33
  2. May 2003: 10 shares @ $19.00 = $190.00
  3. January 2004: 10 shares @ $25.00 = $250.00
  4. March 2004: 10 Shares @ $35.00 =$350.00
  5. January 2005: use part of tax return to buy 10 shares @ $64.00 = $640.00

If you wanted to, at this point, you could stop.

Now let’s examine the results.  You now own 50 shares, with a total cost of $998.33, not including transaction costs, which would be another $50.00.  So round up to $1048.33.

Over the next 9 years, Apple would go from $64 to $773 a share, and split 7 for 1.

This means your 50 shares would be 350 shares today.

Your account would be valued at $76,244 today.  Plus, you would receive $1000 a year in dividend payments, which you could either reinvest, or splurge on something nice for yourself.

Please tell me…what would be better than this?!

These kinds of results are possible!

Please…if you’re not already in the market, get in today.  If you’re just getting started, pick up a copy of my short beginners’ guide, The Stock Market is For Everyone.  It will tell you everything you need to know to begin.

Looking to invest in your child’s future?  Don’t miss out on my Birthday Bonanza series.  Read the first installment here.

Until next time!

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)