Friday, December 16, 2005

A little about the author:

I am currently a student and a Resident Advisor at the University of Massachusetts Lowell. I am majoring in Management of Information Systems and Marketing. I would eventually like to either start my own business or work way up to become a CIO of a successful company.

I was recently laid off by a local school system where I was working as a part time computer technician*. So after hours, days, and weeks of playing playstation, I decided to finally get involved in investing. I have always been interested in the stock market and investing my money so I can earn more than the 0.05% that my savings account paid.

I recently read an article on MSN Money that stated if you were to invest $2000 a year at the age of 16, 17, and 18 into an IRA that had a return rate of 10.5% that your money would double every 7.5 years and by the time you retire you would have over $1 million. That's right, $6000 turns into ONE MILLION DOLLARS. To a person who has never had any kind of finance course that sounds almost impossible, however, anyone that knows the magic of compound interest knows that this is true.

Who wouldn't want to invest their money after this? Well, it seems a lot of people. People fear the stock market because the only thing they are ever taught about in school is the market crash in the '20's and the dot com bubble burst in the '90's. If you do a little research or ask a history professor you will find out that it is impossible for anything like the '20's crash to ever happen again due to restrictions and safety nets put in place by the SEC (Securities and Exchange commission).

I however do not fear the market. I am willing to accept the risk of losing some money in the short run in order to make money in the long run. In my next article I will talk about my opening an account and my first investing experince thus far.

*A little update, after 3.5 hours of interviewing and meetings, I was hired today as a desktop and server support person in on of the departments at UMass Lowell. Having a paycheck will be a big help in my ability to invest.

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