How I Beat The Markets By Investing As a HOBBY (Easiest Ways To Begin Picking & Investing In Stocks As a Beginner!)
Warren Buffett once famously said that the “Chains of habit are too light to be felt until they are too heavy to be broken.”
Indeed, humans are by nature creatures of habit, which is why such a thing as a comfort zone exists–it just feels right to seemingly settle into and just be content with your lifestyle, especially if it feels like you already have most of the things you need to live relatively comfortably, and on the other side of the coin, trying new things and undertaking new responsibilities can thus feel stressful. But as Warren Buffett said, this comfort and these habits can well become the very chains that shackle one’s potential.
And speaking of Buffett, who is considered one of the most successful investors in the world, a skillset and responsibility that I believe everyone should possess is in fact investing, which is the act of allocating one’s wealth with the goal of growing and protecting it as much as possible, and equipping oneself with the knowledge and wisdom to do so.
While I believe many people acknowledge the benefits of well-managed investing for growing one’s wealth, however, especially for those whom investing isn’t yet part of their comfort zone, it can seem quite intimidating to get into, with not only the thought of taking risks, of potentially losing money in an investment being enough to dissuade many from investing into anything but a savings account but also there being quite a lot of concepts and terminology to learn if one is to be able to substantially understand the bulk of financial news and trends. And if you think you fall into either of these camps or are just looking for ways to get into the world of investing but aren’t sure how to start, then I genuinely think this article is for you because I’m going to share some extremely easy, actionable tips for you to get started, which is exactly what I did to start investing, grow and learn as an investor and become successful at it, and most importantly come to actually enjoying this journey.
But real quick, for a little bit about myself first, my name’s Fred, and welcome to the hobby! You might know me from my other YouTube channels, and I’ve actually been investing and learning about the stock market and other types of investments for the better part of the last decade. I currently have about 100 thousand dollars invested in the stock market, and my plan is to reach a million dollars and more invested, including earning enough monthly dividend income to live off of and document my hobby investing journey along the way.
And although I’m not any sort of financial advisor by any means, my mission is to still deliver as much value as I can not only in terms of sharing my investing and trading experiences but also how to really enjoy investing as a hobby, as I have, to make it a sustainable and genuinely exciting part of your lifestyle.
Going back to how I got started with investing as a hobby, I actually grew up in a family that had been quite reserved in this respect, and thus with no one to share their investing experience and wisdom with me other than “not to risk my money unnecessarily,” and because of that I once found it very difficult to get into and wrap my head around investing in the stock market and had no idea where to look to start building the foundation of knowledge I needed to invest confidently and with consistent results.
But still, I knew that I had to do manage my money better than just putting it in a savings account, which by the way, assuming the average interest rate of a savings account is less than 2% annually, often doesn’t even beat inflation, which is the devaluing of currency over time, which averages about 2–3%* per year, and will tend to progress faster in a low-interest environment such as right now. Due to inflation, for example, the average cost of a movie ticket in the U.S. was only $6.41 in 2005, compared to $9.16 in 2019**. And so I knew I had to do something with my money that was just sitting around in my savings account that I didn’t need to spend right away.
Out of the blue, things soon took a turn for me, as I had found the catalyst I needed to blast off my investing career, and actually turn it into a hobby that I avidly enjoy and learn new things in every day, to this day. This all began back when I was still in college when one of my favorite things to do to pass the time was playing video games like League of Legends, World of Warcraft, and Diablo 3 (though most people would agree that it’s not a great game). Initially, I had tried getting into investing in the stock market by following a website called The Motley Fool, which often threw out stock picks and predictions for companies I’d never even heard of, some of which I traded, fortunately not for very long because I literally was just buying stocks that I had no idea what their companies did, and I did not have any semblance of strategy or even concept of when I should buy or sell a stock, what types of stocks I should be looking at, or even what a blue-chip stock was.
Obviously, I didn’t have much success doing this, nor did I really understand what I was doing, but soon after, the catalyst that really allowed me to dive right into the world of investing was actually a video gaming convention called Blizzcon. You see, Blizzard Entertainment was and still is, now under its parent company Activision, one of the largest and most influential gaming studios in existence, and Blizzcon, which happens during November of every year (except 2020, obviously), is when they would announce major updates and new games in their already popular franchises.
So, having dabbled just a little bit in the stock market by then, I naively thought it would be a good idea to buy Activision Blizzard stock right before the convention, wait for them to announce some new games which I thought would definitely raise their stock price, then sell right after to make a profit. So, going ahead with my “master plan,” I went ahead and bought X shares of Activision Stock, only to come out with a slight loss, even though there had indeed been new game announcements during the convention, not realizing the concept of the optimism already being expected and thus priced in even before these announcements, being the novice that I was. I was disappointed, sure, but this particular trade was special in many ways: it was the first time I traded a stock by my own reasoning and initiative, and Activision Blizzard was actually a stock I could easily understand due to being a gamer, and I actually avidly followed the company’s every move.
It might’ve been an overly naive trade, but it was the one that got me into the world of investing, as I was able to channel my passion for gaming into learning more about the company, what the terms on its balance sheet meant, and eventually the gaming industry itself, which encompasses other stocks and companies that I then added to my watchlist and studied. For a while, ATVI was the only ticker I traded, but the more I did so, through both gains and losses, the more I learned about the various mechanics and workings of the overall stock market, which is also linked to factors such as overall economic conditions and politics, as I realized I needed to learn about all of this and more in order to even trade this one company that I loved. I even kept a spreadsheet for this one stock to not only keep track of my buys and sells, and gains and losses, but also document and refine my strategies.
Eventually, through trading and investing in a company and hobby I was very passionate about, I found myself becoming interested in other investment opportunities in the stock market and beyond. I began watching and studying YouTube channels like Financial Education, Graham Stephan, and Ryan Scribner, as well as Investopedia for pretty much all of the new terminology I came across, and found myself expanding into other investments, and even experimenting with swing trading and day trading, especially with Robinhood making trading so accessible. And here I am today, investing as an actual hobby, and having about doubled my investments over the past few years.
And so it turns out the most important key to succeeding as an investor is actually very simple, at least in my opinion, and that is, like with most other careers out there, genuine love and passion for what you do, and always wanting to improve. In my case, it all started with me looking at and investing in the things that I loved, video games. And so I encourage you to do the same: find a company or industry you are passionate about and use that to build a bridge between yourself and the world of investing. And it doesn’t even necessarily have to just be the stock market. For example, Gary Vee himself has been investing in and advocating buying collectibles that you can easily understand and love, such as sports cards and Pokemon cards. In fact, some of the most coveted collectibles can easily garner higher percentage returns than stocks! Anyway, the point is to begin with something that you truly love and enjoy, and use that to build up a broader passion for investing.
And nowadays, with completely free apps like Robinhood and Webull, which by the way if you sign up for using my links below, you’ll actually receive one free stock in each of the brokerage accounts you sign up for. So you’ll get one from Robinhood valued up to $500 dollars, and from WeBull once you make your first deposit of just at least $100 you can get a free stock valued up to $1600. I think both brokerages are great; in fact, I do avidly use both to trade, and I’ll also release easy tutorials in the future for them as well.
Sign up to WeBull and get 1 FREE Stock valued up to $1600: https://act.webull.com/kol-us/share.html?hl=en&inviteCode=NQorQBZEtm7y (this is a referral link which will benefit me if you sign up through it, at NO additional expense to you)
Sign up to Robinhood and get 1 Free Stock valued up to $200: http://join.robinhood.com/frederc46 (this is a referral link which will benefit me if you sign up through it, at NO additional expense to you)
Now, once you’ve opened up at least one of these brokerage accounts, real quick before we go, I have a couple of power tips for you if you are just getting started with investing, and they have to do with how to get over or get used to losses in investing, as in you buy a stock and it dips, which is bound to happen sometimes. And so if you think you’re one of those people who won’t be able to sleep at night if your investments have gone down in value, the first tip I have for you is to initially focus on larger companies, or blue-chip stocks, which already have a proven track record of consistent growth over time, and they must also be companies you genuinely like and believe in in the long term, meaning that even if they undergo small, short term drops, these stocks you invest in should still be of companies that you have a lot of confidence will still end up growing and thus rise in price over the long term of at least a few years.
And the second power tip I have for you, especially if you want to try shorter-term swing trading, is to start with paper trading, which is doing trading simulations instead of with real money. Webull does have such a feature, which will allow you to practice and acclimate to losses, which ultimately aren’t real losses. But if you think paper trading is not enough to simulate what it feels like to actually be in a losing trade, what you can do instead, and this is what I actually did myself at the start, is begin trading with real money, but only in very small dollar amounts, of less than a hundred dollars in play at total at a time. And as for buying stocks you might be interested in that cost over 100 dollars, Robinhood actually has a feature called fractional shares, which as its name implies allows you to buy mere fractions of a stock, allowing you to own smaller pieces of stocks with higher share prices. And I’m not kidding, this strategy of trading with less than $100 is what allowed me to acclimate very well to both gains and losses, as both too much anxiety and to much hype are bad, and this combined with gradually increasing my total investment to a few hundred dollars and more is what allowed me to go from almost losing sleep over minuscule losses to barely even flinching from losing or missing out on hundreds or even thousands of dollars!
With that, hopefully, I’ve provided a means for you to get started with investing as a hobby, along with a couple of tips that have worked for me to help you jump start this fun and surely very fruitful journey! If you’d like to learn more about how to invest as a hobby, consider subscribing to my YouTube channel (linked below) as well! Thanks for reading!
-Fred Chang
Sources:
*According to FRED Economic Data: https://fred.stlouisfed.org/series/FPCPITOTLZGUSA
**According to the National Association of Theatre Owners: https://www.natoonline.org/data/ticket-price/
