Wednesday, November 17, 2004

Holding Pattern

A little background and a few definitions:
I was dirt poor as a single, uneducated mom of 4. I was worse than uneducated - I was a high school dropout! I didn't even have a driver's license when my kids' father dumped me. I had $7 to my name when he left. I was scared to death. When you are that scared, you talk to God. Mercifully, God listened and responded. You also instinctly know what to do. I told God I would give Him 10% of everything He gave me, if He would make sure my kids would have what they needed. I didn't want them to ever miss a meal. He was so faithful! My social security statement is the data proving God's end of the deal.

Now I'm a bonafide grownup. I went to school, remarried, earned a degree and have been living the straight life. Our combined salary is in six figures. We have our checking, savings, another investment fund and a 401 K. We have a mortgage, two car payments and about $3500 on a low interest credit card. We have a decent home in good repair that badly needs decorating. We raised four kids and have three young grandchildren.

We also have a trading account. This account started with about $1000 saved from here and there. I learned to trade stocks with it and had some success. I also broke a cardinal rule by not selling a stock that started to go down. I kept cheering it on as it went lower and lower. I bought it at 47 and now it languishes around $2.50. I look at it every day to make sure I remember that the market doesn't know or care that I owned that stock. I have to respect the market. My husband called that money "tuition" and I'm very thankful he was so supportive as I continued to learn about the stock market.

I've slowly built it back up to $1200 by adding additional money and trading much more carefully. This is money we have identified as money that can be risked. If we lost every penny, it wouldn't hurt our financial picture. It is less than 1% of our total holdings. Whenever I speak of our "trading account" I am referring to this money in an on-line broker's account.

I'm sharing our story to show how an average (or in my case a below average person) can build wealth. I hope it works! I hope it inspires you to build wealth of your own!

Making Money
Starting is the hardest part. You don't have as much money to work with; you have more constraints. If I had $2000 in my trading account, I wouldn't be waiting for my last trade to settle. But I don't, so I didn't make any additional money today. That's okay. Thankfully I didn't do anything stupid either (like trying to trade the money accumulating for our semi annual insurance payment!)

Saving Money
I have a friend at work who wants to learn to knit. We went to a store today so I could show her what she needs to get. I saw the cutest book and supplies to share with the little girls in the class I teach at church. Before I knew it, I had my credit card out and I had spent $15. The good news is that card carries no balance. I'll pay the bill in full. I was aware of what I was doing and knew there was enough money designated for miscellaneous spending to cover the purchase. But why was it so easy to whip out that card and buy?? I need to try to stay out of stores!

We had fun though and my friend was a natural. She was knitting by the end of lunch!

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