Great question. Every broke investor will, of course, have their own response. The majority of responses will probably not include the most difficult thing to admit, it was caused by themselves.
You see, everyone is faced with 1000s and 1000s of choices each and every day. Depending on what you choose, you might end up a broke investor too. I have not always been a broke investor, in fact, I can pinpoint exactly when I turned from an average person with a somewhat healthy savings to a broke investor.
It started when I decided to get a STUDENT LOAN. I had just finished an Associate of Arts degree in Engineering and decided I wanted to continue my studies. Sure I could’ve applied for a scholarship, with a 3.4 gpa, I’m fairly certain I would’ve gotten at least 1 to help out with the cost.
But that wasn’t the case. Now that I look back, I wonder why I didn’t even try. Was it because scholarship applications seemed to be a drag and I was too lazy to do it? Or was it because I didn’t feel worthy enough to get a scholarship and decided to avoid rejection all together?
Whatever the EXCUSE was, it shouldn’t have justified applying for a student loan. To be honest, I didn’t even need to get a loan. I was working a fairly decent paying job that I enjoyed being at. I had a steady routine going and everything was smooth sailing. So why did I get it?
It was EASY to and it was “free” money. For starters, you don’t have to qualify to get a student loan. Pretty much anyone that is a student qualifies to get two types of loans, a direct subsidized or unsubsidized loan. Of course being the “savvy” investor that I am, I chose to get the subsidized loan since I wouldn’t be getting charged interest while in school.
What was I going to do with all this brand new cash? Easy, invest. I was just getting into how to “read” the markets and make “smart” moves with your money. I figured anyone with half a brain could make money in the stock market, so why not give it a go? Someone should have told me I was missing half of the brain that counts.
3d printing was HOT in 2013. DDD, SSYS, XONE were all over the headlines and it seemed to be the right time to buy in. So with part of the loan, I put money into DDD and XONE. At first, all was gravy.
I would be in class and while the professor wasn’t looking, I’d take a look at my stock. Then I saw the stock go down. I figured, “Hey, it’s all good. It will come back up.” Then it continued going down. My anxiety got the best of me and that was enough for me to pull out.
At the end of the day, I took a look at the stocks again and what do you know, the price of both stocks performed better than expected that day.That started my speculative trading “strategy”. Long story short, I came out a wreck with nothing to show for it.
That is one way to become a broke investor. Unfortunately for me, I wasn’t broke enough to say enough. In How do you get so broke? Part II, I am going to share with you the second time I got a student loan and how I got even MORE BROKE. Stay tuned.
Keep growing, Keep investing. Even if you are the broke investor.