7 years ago I knew nothing about investing. My first job out of college didn’t offer retirement benefits so I started an IRA and simply chose the target fund based on my age.  After graduate school, I landed a job that offered a 401k and again I stuck to the target fund, cashing out the little bit I did accumulate when I left and started a new job again a year later.

I justified the very meager contributions I was making to this 401k because there was a 2 year waiting period before I could receive any company matches. So for 2 years I stuck measly 3% into the target fund and something else I picked blindly and knew absolutely nothing about. Names sounded good *shrug*

After I turned 30 I decided it was time to get serious about my investing life. Prices on everything hit rock bottom after the recession, why not take some chances. My first course of action was sitting down to start doing research. I was determined to go from target fund investor with its conservative risk and conservative returns to active investor with the possibility of increasing my returns and accumulate some significant gains.

The first thing I did was increase my contributions to receive the full company match.

This was a turning point as I now saw more activity in my account because of the increased contributions. This made me happy so I wanted to learn even more.

I turned to Investopedia as a next step perhaps a year later. They have a great series called investing 101 which broke down the market into simple terms.

Next I went to Wall Street Survivor, they have a super fun graphic art video series that teaches you even more about the symbols on a stock table and what they actually mean.

I also picked up 2 books on investing. My favorite was How I Made $2,000,000 in the Stock Market: Now Revised & Updated for the 21st Century, by Nicholas Darvas. This book was written by a dancer who received a gift of stock as payment for a show and it retells his journey flipping his initial investment over and over as he traveled the world using a strategy that didn’t require him to be an investing expert, just utilize his common sense. Now there is lots of controvercy on this book, many investment professionals do not believe he ever made that much money or that one can successfully invest without a licensed professional leading them, but I will tell you his strategy is the one I used the most and it worked very well for me.


Could just be dumb luck, but my portfolio thrived.

(Now of course this isn’t a replacement for “professional advice”, and don’t blame me if this doesn’t work the same way for you. Past performance doesn’t guarantee future outcomes, yes the government makes me add this. I am not a stockbroker or financial advisor, just retelling what I did personally)

After educating myself and building my confidence I started practicing. I used the stock watch app on my phone and opened a stock market simulator account where I started investing with pretend money. I picked  a few stocks I heard about and started watching them. I kept track of their performance for 4-6 weeks and then assessed whether I thought they would be a good real life purchase.

The stocks that performed well and actually grew over the watch period I purchased. Anything that hovered around the same price or dropped during the watch period I didn’t purchase.

I also made significant changes in my 401k. I went in and actually assessed the performance of each mutual fund offered in my company plan via Morningstar and chose all new investments based strictly on performance. I also changed my asset allocation from 90% stocks/ 10% bonds to 70/30 stock-bonds (because I read a quote from Warren Buffet somewhere that said investing in stocks shouldn’t be so risky).

I kept a small portion of my portfolio in target fund, but everything else I hand picked.

At this point I increased my contributions again, to a whooping 15% of my income. My company offered a 5% match so I was investing about $1100 a month into my 401k, which turned into around $13,000 a year.

I repeated this contribution level for 3 years, and returns in my account ranged from 7% to 27%

My cash contributions for 3 years were approximately $52,000. But with capital gains (a fancy word for profits), dividends and reinvestment’s I had a portfolio worth $94,000

I only checked the performance of my investments twice a year, and had the account rebalance automatically. What does that mean? If I made too much in profits the account would automatically sell some stocks and buy more bonds.

If you have questions about what I did feel free to leave a comment below or contact me directly.

If investing still sounds like french to you I have a great video series that walks you through the basics called The Shopaholics Guide To Investing, it gives you a broad overview of the market and how it is just like going to the mall and buying a pair of shoes. You will also become familiar with all the terms you need to at least get your feet wet.


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