Free Yourself Daily Hub

Don’t Skip the Foundation

One of the biggest reasons I wanted to start investing was because I was tired of watching everyone else make money. You hear stories about people who bought NVIDIA years ago and are now millionaires. Social media is full of screenshots of incredible gains, and it’s easy to think everyone is making money except you. What those posts rarely show are the people who lost thousands of dollars chasing the next big thing.

Before I go any further, I want to make one thing very clear. If you don’t have at least two retirement vehicles, such as a 401(k), Roth IRA, or pension, and at least six months of emergency savings, I wouldn’t be trading individual stocks. Investing/trading should be done with money you can afford to leave alone. Your emergency fund is exactly what it sounds like, money for emergencies. It shouldn’t be sitting in the stock market where it could lose value right when you need it most.

Don’t Chase the Unicorn

When I first started investing/trading, I spent way too much time trying to find the next unicorn stock. I wanted to be the person who found the next NVIDIA before everyone else did. Looking back, I realize that I ignored a lot of great companies because I was chasing huge volitle returns instead of focusing on quality businesses. There is nothing wrong with looking for a company that has tremendous upside, but I wouldn’t build my portfolio around trying to hit the lottery. More often than not, steady companies that consistently grow end up being the better long-term investment.

Always Protect Your Money

Another lesson I learned the hard way is that you never really know how low a stock can go. I used to think, “It can’t possibly go any lower,” only to watch it continue falling. That’s why I use stop losses on my trades. A stop loss helps protect your money when a trade isn’t working the way you expected. The only exception for me is with my long-term investments. When I buy companies like Microsoft or IBM, I don’t use stop losses because my intention is to own those businesses for years, not weeks. They are investments, not trades. On the other hand, when I’m trading more volatile companies like NNE, I absolutely use a stop because protecting my capital is just as important as making a profit.

Cash Is a Position Too

One thing that took me a while to understand is that cash is a position too. You don’t have to spend every dollar the moment it hits your brokerage account. There will always be another opportunity. Don’t stress because you didn’t buy a stock at its absolute lowest price. Nobody consistently buys the exact bottom, and trying to do so usually leads to frustration. I’d rather miss part of a move than rush into a bad trade.

Don’t Be Afraid to Take Profits

Speaking of profits, I also learned that profit is still profit. One of the biggest mistakes I made early on was refusing to sell because I thought the stock would keep climbing. Sometimes it did, but most times it didn’t. If I make $20 on one trade, $30 on another, $15 on another, and $35 on another, those gains add up over time. I’d much rather consistently take smaller profits than watch a winning position turn into a $200 loss because I got greedy. There will always be another trade tomorrow.

Penny Stocks Aren’t Always Bargains

Penny stocks taught me another valuable lesson. Just because a stock trades for less than a dollar doesn’t mean it’s cheap. There’s usually a reason a company that once traded at $20 is now worth $0.70. Sometimes those companies recover, but many never do. Before buying any stock, understand why it’s trading where it is instead of assuming a low price automatically means it’s a bargain.

Managed Accounts Are Worth Considering

If you are someone who does not want to take the time to review each company and keep an eye on your trades, a managed account is a great thing. In fact, for many people they’re one of the smartest investing options available. Not everyone has the time to read earnings reports, follow company news, analyze financial statements, and watch charts every day. If you don’t enjoy doing those things, a professionally managed account can still help your money grow while allowing you to focus on your career and family. There’s nothing wrong with letting professionals do the work if it helps you stay invested for the long term.

Find Your Investing Style

Another important lesson is figuring out what kind of investor you actually want to be. Day trading, swing trading, and long-term investing all require different strategies and different amounts of time. Personally, I’ve found that I’m a combination of swing trader and long-term investor. I like using profits from shorter-term trades to buy more shares of companies I plan to own for years. For example, profits from some of my smaller trades helped me add Microsoft shares when they dropped into the mid-$300 range. That strategy fits my personality much better than trying to trade every single day, because I just dont have time.

Never Invest Money You Need

One rule I never break is investing money I can’t afford to lose. My emergency fund stays exactly where it belongs. Investing money should be separate from the money you rely on to pay your bills or handle unexpected expenses. Having that separation removes a lot of stress and keeps you from making emotional decisions when the market gets volatile.

Don’t Trade the Noise

Over time, I’ve also learned that a lot of the daily noise doesn’t matter. Headlines, social media posts, and people yelling that a stock is “going to the moon” can move prices for a day or two, but those moves often disappear just as quickly. I try to focus on the company’s business, financials, and long-term outlook instead of reacting to every headline that pops up on my phone.  The noise will show trouble ahead but its a short term situation, when behind the curtain, the company is making great strategic moves.

Great Earnings Don’t Always Mean a Higher Stock Price

Perhaps the most surprising lesson was discovering that great earnings don’t always mean a stock will go up. I owned a company that had been trading between $14 and $16 a share. It reported record earnings, and I expected the stock to take off. Instead, it dropped below $10 almost immediately. That’s when I realized the market doesn’t just react to earnings, it reacts to expectations, future guidance, and investor sentiment (which essentially is just a made up thing). A company can report excellent numbers and still see its stock decline.

Be Patient

If I could leave you with one final piece of advice, it would simply be this: be patient. Be patient waiting for the right entry point. Be patient while building your portfolio. Be patient while your investments grow. Wealth isn’t usually built from one incredible trade. It’s built by making good decisions consistently over many years, using a number of vehicles. At the end of the day, investing isn’t about getting rich overnight. It’s about putting your money to work so that, one day, it begins working just as hard as you do. That’s what financial freedom is really all about… Having your dollars make a dollar so you dont have too.  

I just wanted to share these simple things that I have learned.  I put 15% of my paycheck into my 401k and I try to max our my Roth each year but I have been putting some funds into my home last year and this year so I ended up not maxing it out.  That said, I have approximately 10 months of mortgage payments in my emergency fund earning over 3% interest and everything on top of that I used to personally invest/trade.  It took me years to get to this point and no I am not a millionaire but I plan to be.  What is most important is when something goes wrong, you do not have to panic and you have accounts that you can pull from to take care of it and not worry about your future self, because you are still putting money into a retirement vehicle.