It is common to hear people say that they do not have enough money to start investing. I hate hearing people say this because it is not true. One of my favorite investment stories involves the life of Grace Groener. She worked at an entity that merged into Abbott Labs, and in 1935, she purchased three shares of Abbott Labs for $65 each (this would be roughly $3,000 in today’s money). As a result, the investment grew into $3 million by the 1990s and she ended up dying with an estate valued at over $7 million.
Now, I am not trying to tell you that you only need to invest a couple hundred bucks to end up with millions a couple decades from now. But what I am saying is that, when you work for a paycheck, you are engaging in an act that has very fixed terms as it relates to time and outcome. You work X hours and receive $Y money. Your upside is fixed by your hourly or salaried rate, and upon completion of the labor, you receive no additional benefits in most arrangements.
But business ownership, through the purchase of common stocks in well-known companies like Microsoft or Coca-Cola or Johnson & Johnson, comes with an unlimited upside. Once you get your hands on a share of stock, you have a perpetual claim on the future of the business. The share you buy today can keep growing and giving you benefits in some form for the rest of your life.
In dealing with some various estate issues, I am struck by how often some random asset purchases for an almost trivial amount end up becoming a meaningful amount of their estate upon death. It is a common occurrence to see an estate where someone has a few thousand in a checking account, owns their home outright, and then has like 850 shares of stock in the local utility company trading at $70 per share because they bought 100 shares at $20 in the 1980s and then let the position ride. You hear stuff like “My father Fred randomly bought shares of Ameren UE stock thirty years ago. Not sure why.” And monetarily, these “random” investments that get made and held end up being what someone has to show for their life financially other than their house.
But of course, it is not random. Maybe the person did not have a comprehensive plan that was consistently executed over time, but the positioning is deliberate. When you acquire a cash-generating asset such as a common stock, you now have something on your household’s balance sheet that can grow and create wealth without requiring any future action from you (in fact, doing nothing with it is exactly what enables the investment to grow).
If you think of life in terms of probabilities, every decision you make either stacks odds in your favor or against your favor. If you are habitually late and slow to get going, your career earnings are going to have a presumption against wage growth over time that can only be conquered if you are plainly brilliant otherwise (and still, you would get farther without the handicap applying whatever force it may to you).
On the other hand, you can make decisions that stack probabilities in your favor. You can buy some shares of Coca-Cola here. Some shares of Nestle there. And some shares of Johnson & Johnson when you can. Even if it is just a few hundred bucks or a few thousand dollars, there is now some probability working in your favor alongside the income from your future labor that will be able to provide some amount of money for you. And of course, the more stocks you buy and the larger amounts you are able to put to work, the greater the magnitude of the benefit you will get from those probabilities.
But that is the mindset that it takes to get going. Every dollar you put into stock gives you some probability of unlimited upside that is on the ledger for your benefit. Even if you just have a few hundred or thousand dollars to set aside, the acquisition of a cash-generating asset gives you something that may become substantial many years from now.
Brokerage costs are now zero. If you have a $5 minimum, you do have enough to get started. A single, small decision has the capacity to provide you with permanent value.