I have always wanted to invest in the stock market- it just seems cool. And I’ve loved the projects I’ve had to do in various classes where we got a ton of fake money to invest in stocks and then tracked our progress over the course of a semester. I did this both in high school senior government class and again in my MBA program. But both times, we were given a ridiculously high number – a number I will likely never see in my accounts – as our seed money. It was fun. It did teach me about how the stock market worked, but it never felt applicable to my life.

So this year, on DAMW, I want to try looking at something that might be a realistic investment strategy for me, as early as next year. Where will my money come from? From the budget, of course.

This year, we are planning on replacing all the windows in the house. We are budgeting $575/month to go into savings to cover that and other house related expenses. But replacing the windows is the last major thing we have planned for now. So once that’s paid for, I don’t think it’s unrealistic for me to divert some of that money into stocks.

Let’s say I manage to save $500 for starting money, and then each month, give myself an additional $200. ($175 would remain in the house budget. The other $200/month would be put into other savings goals.)

I could put that money in an IRA, but I’m not looking to start another retirement account. I want this to be available should we need it. So, stock market.

At the same time, I have no intentions of being a day trader, nor do I want (for now) to invest individually in companies and products I have never heard of. For the initial buy in, I’m ignoring penny stocks. Maybe as the year progresses and I feel more comfortable, I might take one month’s investment dollars and try the penny stocks, but that’s not for me. Instead, I’m looking at companies I know about, products I purchase, etc.

Here are the stocks I looked at today, with prices from around 4:30pm EST (so a little before the US markets closed).

Stock	Price	Symbol	Exchange
Chipotle	297.76	CMG	NYSE
Jack in the Box	28.73	JBX	NASDAQ
Coke	37.04	KO	NYSE
Apple	525.31	AAPL	NASDAQ
Lenovo	19.22	LNVGY	NASDAQ
Asus	325.00		Taiwan
EA	13.77	EA	NASDAQ
Barnes & Noble	13.40	BKS	NYSE
Amazon	266.38	AMZN	NASDAQ
Google	733.30	gppg	NASDAQ
Union Pacific	130.18	unp	nyse
Zipcar	12.16	ZIP	NASDAQ
PetsMart	68.03	PETM	NASDAQ

 

Given that I was only giving myself $500 to start, I decided not to invest in any company with a price over $50. I also decided I wanted to have at least a little diversity- at least 4 different stocks to start, and to be able to buy at least 5 shares of each. It’s not much, but it’s a start.

The other thing I did was look at costs. For now, I’m going with e*trade. I don’t think they are the best deal I can get (I actually think my CostCo executive membership gets me a much better deal), but they are the biggest and most recognizable name out there. (As the year goes on, I’ll investigate other options, so that when I do start investing, I will have the best deal for me.)

E*trade charges $9.99 for each transaction (less if I make a ton of transactions, but I’m not going to). I thought about paying for the separately from my seed money, but decided that if I was going to put limits on myself, I should hold to them. My $500 seed money has to include the fees.

Because of the limits I set on myself, I decided that for now, both Jack in the Box and Coca-Cola are still too expensive for me. It’s very likely I will devote an entire month’s money to one or both later on, but they weren’t going to be part of my initial investment.

That means my very small initial portfolio will look like this:

Stock	Initial Price	Shares	Initial Value
Lenovo	19.22	5	96.10
EA	13.77	9	123.93
Barnes & Noble	13.40	9	120.60
Zipcar	12.16	9	109.44
			450.07
	Fees	9.99*4	39.96
	Total Cost		490.03

 

This leaves me with $9.97 to add to next month’s investment.

Each month, I’ll come back and add to my portfolio, track the value of my stocks, and let you know how I’m doing. (There will be graphs, oh yes there will.)

And, I’ll start researching the different websites that let you invest for yourself. I’d look at brokers, but somehow I don’t think a broker is going to be all that interested in working with someone with the size of portfolio I’m looking at.

 

Feel free to send me suggestions for what to buy, or tell me I need to sell. Let me know if I’m doing something totally wrong. Or, set your own budget and play along with the experiment. The best way to learn is by doing…