My parents, being professionals, have always believed that money comes from a hard day’s work at the office. And as a Psychology major, I never really took an interest in the Stock Exchange—or anything financial, for that matter. As far as I was concerned, these things belonged to the realm of rich risk-takers: stocks and securities (whatever they were) really had nothing to do with an undergrad not even taking a business management degree.
I eventually realized I was dead wrong.
As it turns out, there are other Ateneans who already see the value in investing, and have made their savings grow beyond the money equals work principle, without having to take part in what Rich Dad series author Robert Kiyosaki calls the “rat race” of employment.
A family affair
The Chua siblings Wesley (BS MAC ‘11), Carlyn (III BS Psy), and Wilver (II BS Mgt-H), developed their money-smart mindset after their parents cut off their allowance in high school—a decision meant to teach them responsibility. From then on, they’ve had to look for means to make the most of their money, and they’ve found that means in stocks.
“Idle cash encourages the start of portfolios. The best way to start it off is to invest in well-known, safe companies,” says Wesley, the eldest. Wilver enjoys the practical benefits of stocks as well; though he admits being the youngest means his elder siblings are “doing all the work for me.”
For student investors like the Chua siblings, the interest in stocks is often motivated by family background. Carlyn shares, “Since our parents are both into stocks, it wasn’t really a surprise that we also got into it.”
“It’s like praying,” Wesley jokes. “A family that invests together grows together.”
But for Carlyn, the value of investing in stocks goes beyond money-making. “I wanted to satiate my craving for thrill and adventure,” she says. “Stocks are extremely erratic. You have to be alert and know when to pull out. It’s a fast-paced game that doesn’t allow dawdling, and it can really do damage to your bank account if you don’t handle it properly.”
You’ll hear such stories among many stock enthusiasts. Money is, after all, not the only thing that can keep you hooked on investments; you invest for the adventure as well.
Start young
“[You should start] as early as humanly possible,” says Carlos Esguerra (BS Mgt-H ‘09). “Why? One, the power of compounding; two, the development of the habit and discipline of saving; three, more money means more money to play with; more money to play with means more money to earn; and four, the earlier you start, the less it hurts when you lose.”
In simpler terms, younger people have fewer responsibilities; hence, they can afford to risk more than what a married guy with kids can. “You’re not working; you just have money, and yet you’re growing in wealth,” says Carlos, who now works at a large foreign bank. “The concept alone should be a deal-maker.”
Students can begin with the Ateneo Management Economics Organization’s Fantasy Stocks, a tournament of stock trading simulation. The objective is to earn as much as you can by buying and selling stocks according to the trend of the actual stock market. The project, which aims to encourage investment among the youth, attracted 80 teams during its last run, proving that Ateneans are becoming more interested in investing.
Risk analysis
But despite all the encouragement, investing in the stock market is far from easy. John Palma (II BS Mgt), the winner in this year’s Fantasy Stocks, found the simulation incredibly taxing. He joined the competition thinking he would be taking a break from the stress of trading real money, but soon realized it was also tedious physically and mentally.
“The stock market is only open from 9 AM to 12 PM so often I found myself leaving class earlier to check how the prices of my stocks were. I was so bothered that I couldn’t concentrate during class. [It] requires so much thinking that it drains you.” Buying and selling stocks isn’t all rewards, after all. He was talking about a simulation; imagine what it would be like to trade when real money is involved.
It helps to keep in mind that not everyone is born to work with stocks. Sarah* (BS Mgt ‘10), says not everyone can be that aggressive. “It’s good to invest in something long term, one that doesn’t require much attention,” she advises. An alternative to stocks is investing in mutual funds—though growth is much slower, it’s more stable compared to the high reward-high risk nature of stocks.
Carlos shares Sarah’s sentiments about investment. “Speculation is the mother of all evil,” he says. “It doesn’t matter what the fundamentals or the ratios say; when the markets dump your stock, you’re losing everything all the same.”
Firsts
In case you’re still wondering whether students can play around with money, I am proud to say I’ve already made my first investment. My sister and I put together our savings and bought shares in a mutual fund. Through research and perhaps a stroke of luck, we were able to buy shares at the lowest price this year. We’ve since earned 10 pesos per unit—that’s 6000 pesos in one month. It was one of the biggest surprises of my life because I’ve honestly never been good at money matters.
While I know it won’t always be this successful (already, I’m bracing myself for losses), it still feels like a huge accomplishment. As small as it is, I know this is just the start not only of an actual diversified investment portfolio, but a life of financial learning as well.
*Name has been changed at the request of the individual.
Investment Dictionary
Portfolio
(n.) – A collection of investments all owned by the same individual or organization. These investments often include stocks, bonds, and mutual funds.
Stocks
(n.) investments in individual businesses.
Bonds
(n.) investments in debt that are designed to earn interest.
Mutual Funds
(n.) pools of money from many investors that are invested by professionals or according to indices.
