A World We Dare to Imagine - Pt 3

Organization - Investing for Your Future

Our mission is to educate people on the importance of investing and to teach them how to safely invest in stocks. We aim to help communities in the United States where long-term financial planning is an afterthought. We believe our organization will open up opportunities by helping people get out of poverty or just by helping people save more effectively.

The most important part of this organization is the educational aspect. Nowadays, most people don’t really understand investing at all. The goal of Investing for Your Future is to show people how much of a difference investing makes towards their total savings. For example, look at these 3 facts that most people don’t know:

1.     Over the last 100 years, if you invested in the index and held for over 8 years, you would have never lost money (this includes the Great Depression, the dot-com bubble, and 08 crash). In the short-term stocks are risky, but as you can see, in the long-term stocks are not risky at all.

2.     Over last 100 years, average real return (takes inflation into account) for Bonds = 1.1% for Stocks = 8.3%. So, if you invested 100k into bonds and waited 20 years you would make around $29,000; if you invested 100k into stocks and waited 20 years you would make around $415,000. This illustrates the difference in returns from stocks and bonds.

3.     ONLY invest in bonds if you want the opportunity to pull out your money in the short term. If you are fine with not being able to pull out your money in the short term than ALWAYS invest in stocks.

I am excited about the work my organization will do because I have a passion for trading and a passion for helping people, so this is definitely something I would never get tired of. I would use my finance education from Marshall and my own personal investing skills to teach people the benefits of investing in stocks for the long term. I started trading back when I was 14, and by the age of 18, I was making complex hedges with options, futures, and forwards. Also, I took a financial derivative class at USC where I learned how to safely hedge even if the market crashes.

Nowadays, in the United States, almost everyone has access to an online brokerage. I would like to host weekly trading camps in areas where long-term financial planning is an afterthought, like the inner-city of Chicago and Los Angeles. At these camps, there will be live speakers to educate, computers to trade on, and free food/drinks. The main goal of my trading camps is not to show individuals how to actively make trades, the goal is to inform them about long-term PASSIVE Investing. Passive Investing is where the investor makes a trade, sits back and does nothing, and then sells years later for much more than they purchased for. Traders don’t have to actively watch the stock price or do any hedges to minimize their risk. Passive Traders just have to follow one rule: Be Patient – YOU ONLY LOSE MONEY IF YOU SELL.

My camp will educate people about the safety of long term investments in the stock market. I believe that if people know the benefits listed above, they will be more inclined to invest in stocks rather than in bonds or even worse just letting their money sit in a bank account/underneath their bed. Hopefully, people at a young age will realize that it’s not about how much money they make each year, it’s about how effectively they save their money. For example, an inner-city young adult can keep $5,000 in his house where it loses value every day due to inflation, or he can invest that $5,000 in the index where it will be worth over $11,000 in 10 years. I believe my organization will open up opportunities in peoples futures that they would have never had without knowing how to effectively invest their money for the long term.