One of the first decision an investor must make is whether or not they want to invest on their own or use a professional.  If you are reading this, you have probably (or are at least considering very strongly) decided to be an independent investor and we should talk about what should be the next step.

The $100 Investor needs to develop themselves, their habits, and their finances to invest.

I’m a fan of the cartoon strip Calvin & Hobbs and find that both Calvin and Hobbs have both had moments of shear, unadulterated brilliance among pages and pages of insanity.  Calvin and Hobbs are at the top of a snow-covered hill, dressed in coats and gloves, with sled in hand.  They hop on the sled and are soon careening down the mountain side and headed toward a bump in the hillside that has been effectively turned into a jump.  Our heroes hurl down the hill and hit the jump sending them over trees to plant them in a spectacular heap.  Hobbs turns to Calvin and asks something like “maybe we should have packed a parachute”.

As kids, we may have found ourselves whisking down a hill of decision that ended and spectacular mess as the decision we made provided us the jump to launch us over the trees.  As we grow up and have more life experiences we learn more and more about evaluating options and developing our capacity to make better decisions.  I think that we need to do the same thing specifically for our financial and investing selves.

The starting point for the independent, $100 Investor is to gather $100.  That means very different things for each person reading this post.  For those who are young it may mean finding an odd job or two to earn some extra income to gather $100.  For those that are into their working life it may mean changing some buying habits to eliminate unnecessary purchases to gather $100.

In any case, the $100 Investor should be in control of their spending and start developing the habit of planning for future needs and wants.  So what does that entail?  That means the $100 Investor should know how much money they are making, how much they are bringing home, and when that money will arrive at home.  It also means that the $100 Investor knows how much he or she spends and for what they spend their money.  The key to becoming a true $100 Investor is making the conscious, informed decision to change some spending habits or create additional income for the express purpose of investing.

I have long known that controlling spending is an important habit but I haven’t developed that habit.  I didn’t develop the habit when I was young and first starting to earn my own money and that lack of habit continued as I graduated from college and began a career.  A habit must be developed and that means the inertia of one’s live must be changed and redirected.  I have been working on changing my habits and developing the habits I want and the process gets harder and harder as time passes and the old habits are more practiced and more ingrained.

Our challenge is that we don’t learn to understand and manage money in school or at home.  Our society in the United States is built on the desire to spend and consume now.  For me, I didn’t learn how to tune out the consumption-oriented messages and ignore the hype to buy stuff.  In high school I worked to buy the new snow skiis and boots that arrived in September, to get tickets to the just-announced concert coming to town, to go see the latest movie on opening weekend, and a myriad of other things for which my desire to own or purchase were fanned by advertisements, commercials, magazines, shows, and all the other “BUY” messages which bombard us every day.

Investing is simply this……delaying our desire to spend & consume from today to some point in the future.

To start, as a $100 Investor (no matter where me are right now in our personal and professional careers), I need to find $100.  Even if we don’t have the greatest budgeting skills or the strongest resistance or impulse buying, I think we need to find $100 and invest it, as soon as possible.  For me, this approach has given me a reason and a tangible tool to help me resist impulsive purchases, to better evaluate purchases, to motivate me to be willing to work within a budget.  I have many years of ineffective and unprofitable habits which I need to change and gathering my first $100 has been a tremendous counterbalance to my ingrained habits.  Now my wife would tell you, if you were to ask her today, that I still have a long way to go but that I have made some progress.

Now go get your first $100.

Put the money into a savings account as you gather your funds.  As you get close to your $100 goal, the next step will be to evaluate and choose a broker to use for your investments.

Disclosure & Disclaimer

 I am a practicing certified public accountant (CPA) and am licensed in the states of Oregon and Washington and own a CPA firm, CPA Worx LLC, and have practiced for more than 25 years.  I teach accounting at Oregon State University and have taught at the college/university level since 1997. 

 I also own a registered investment advisory firm, Peacock Investment Worx LLC.  In the $100 Investor project, I am not offering recommendations of any kind nor am I providing tax, accounting, or legal advice.  I do not receive any type of compensation, of any kind, from the brokers, companies, mutual funds, exchange traded funds, websites, authors, publishers, investment managers, or anything or anyone else that I mention in this project.  True, my clients compensate me for my work and advice.  Many people do not want to invest on their own so I provide my investment services for a fee through Peacock Investment Worx LLC.  But the $100 Investor project is my way of helping anyone and everyone that wishes to invest on their own.  I want to support the independent investor.