A How-To For Investors, From Someone Who's Still Clueless

Last December I did something I never thought I'd do. I sat down and opened a Roth IRA. What is a Roth IRA you ask? I didn't know either, but having finally cracked the book a family friend gave me when I graduated high school I learned a thing or two.

So, in light of recent posts about finances and growing up I thought I'd share what I learned about the big, bad world of stocks and bonds. Please bear in mind that I know nothing about how this all works, don't give any advice about which stocks to buy and when to sell them, I'm just giving you my perspective, as a real, live, young person starting out on this path.

First of all, I decided on a Roth IRA because I was working as a freelance PA in television. As a freelancer, small business owner or anything else where your job doesn't offer a 401K or its own IRA this is a good alternative. With this you don't pay taxes until it's time to withdraw your money, and you can keep it for a long amount of time. I invested $200 dollars into it, with the idea that I would continue to invest that amount of money with every paycheck I get (if I could afford it, of course)

And then, the next thing to do of course, is invest it. You can keep your $200 and save it up, or you can be brave and foolish and use your money to make money for you. What a strange and unusual idea! Who would have thought that you can make money without working 8 hour days for it! Now, I have no clue about how exactly the stock market works. All I think of when I hear "stock market" is guys rushing around on the stock market floor waving fingers and trading little white slips of paper, like in Ferris Bueller's Day Off, or guys in big glass office buildings accumulating loads of money, like Patrick in American Psycho. I get that you invest your money in companies, giving them money that they can use to grow and get better, but what shares mean, why they rise and sink, and how that increases my bottom line I don't know. In addition to the book above I used http://www.thebeehive.org/ to help me figure some of this stuff out.

Before I began all of this I happened to hear a radio report on NPR about socially responsible investing and decided that when I was more adult, and more able to comprehend what exactly a 'stock market' is, I would do that. One more way to save the world without actually having to do much.

Once I started considering stocks to buy I remembered this promise to myself. If you are a person who cares about the environment, gets angry at the way pharmecutical and oil companies run amuck and recycles religiously then why not decide where your money makes a difference by where you invest? And I'm secretly hoping I stumble on the next Microsoft because everyone is so concerned about the environment and energy saving innovation one of these companies has got to be onto something. Here's some websites where they give some good advice about socially conscious investing:

1. The Sensible Investor
2. Rethinking Socially Conscious Investing
3. Social Funds
4. New American Dream isn't exactly about investing but it has really good advice about living green.

So, there you go. I started investing money in Green Mountain Coffee Traders (GMCR), Hybrid Technologies (HYBT), SunTech Power (STP) and Evergreen Solar (ESLR). Green Mountain Coffee Traders is doing the best so far but the others are in the green these days too, literally and in my account (they use green instead of black to show the increases).

I'm getting kind of into it. I love seeing the numbers go up and down, even if I have no idea what exactly they mean. And I can even talk about this stuff and sound knowledgable, at least around my friends who are just as clueless about this as I am. It's funny to see myself doing something so adult like when I feel so much like a kid most of the time. I even got my grandmother's old account for me from my dad and started investing that too.

I've mentioned before how un-adult-like I feel, and how I don't know all of this stuff, but with this I can control it and make these decisions on my own, and it will benefit me later in life. It's one of those things that I am doing to prepare for myself the life I'd like to have one day. I think this whole growing up thing should really just be done in tiny steps. Like a toddler who repeats things over and over to learn how things work.