Should First-Time Investors Enter During Market Boom? Glinda Bridgforth and Gail Perry-Mason, co-authors of Girl, Get Your Money Straight talk about what beginning investors should know before playing the stock market.
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Should First-Time Investors Enter During Market Boom?

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Should First-Time Investors Enter During Market Boom?

Should First-Time Investors Enter During Market Boom?

Should First-Time Investors Enter During Market Boom?

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Glinda Bridgforth and Gail Perry-Mason, co-authors of Girl, Get Your Money Straight talk about what beginning investors should know before playing the stock market.


This is NEWS & NOTES. I'm Farai Chideya.

Today we end our series, Minding Your Money, with investing. The Dow is at a record high but is that goodness for stockowners, and does that mean investing is right for you. For answers we turn to the team that wrote the book "Girl, Get Your Money Straight." Co-author Gail Perry-Mason will offer up some investing tips but first Glinda Bridgforth spoke to me about what to do before you hit the market.

Use me an example, what do I need to do to get m financial house in order before I even consider investing?

Ms. GLINDA BRIDGFORTH (Co-author, "Girl, Get Your Money Straight"): Well, I just think that it's important not only for you but for everyone to understand why it's important to invest. We have to take personal financial responsibility for our futures because our jobs - we just can't depend on our jobs being there. We live in an at-will environment now and so you could be fired at will or the companies could close and so forth. We can't depend on the government. We cant necessarily depend on getting a big inheritance.

So it's important for us to use and to maximize whatever amount of money it is that we have. So number one, it's important to make sure that you pay off or at least pay down your debt. It's one of the things that prevents a lot of people from living their dreams, taking advantage of opportunities that come to them. They have too much debt or they just even know how much debt they have.

CHIDEYA: Let's go into that a little deeper because here on NEWS & Notes, we talk a lot about debt. Why shouldn't you, for example, invest before you get all of your credit cards straight. I mean, some people say well, you know, at least I'm making a positive contribution to my future if I'm investing.

Ms. BRIDGFORTH: You can invest while you pay down your debt. But there's a line, I think, that you have to look at and it maybe different for each person. But if you've got $20,000 worth of debt and you're paying 29 percent interest on it, you are probably not going to be investing in something that's going to give you a 29 percent return. So you need to make sure that you start to at least pay down the debt. That's why I'm a believer in getting what I call, you know, with my books, "Girl, Get Your Money Straight" because getting your money straight doesn't necessarily have to mean that your debt-free but it does mean that you have control over your debt.

CHIDEYA: And what do you do next?

Ms. BRIDGFORTH: Then you do want to make sure that you're saving at the same time and initially you want to save and have an emergency fund or a saving cushion. And that's critically important because what tends to happen is that if an unexpected expense comes up, then at least you've got a savings to go to in order to take care of it as opposed to pulling out the credit card and then going back into debt. So that's just going to keep you on a treadmill.

Now the amount that you save, it varies from person to person. Some people, of course, ideally, we'd like to see what six-months worth of your living expenses set aside in an account that you can draw from in case you lose your job and it gives you an opportunity to find another one. But in my opinion, I just feel that you need to save something and you should be saving automatically whether it's payroll deduction or automatic transfers from your checking account to a savings account. But something that's liquid so that you have access to it but not too much access.

One of the problems that people have is that they nickel and dime their emergency fund away if it's too close at hand so don't have an ATM card attached to it. And what a lot of people are using now are the online savings account.

CHIDEYA: Anything else you should do before you try individual investing?

Ms. BRIDGFORTH: Well, I think that it's important to begin to put money away for your retirement. I think that that is especially important if your company offers a 401(k) account. You should at least be contributing as much as the company matches and if it's at all possible - I certainly recommend maximizing your contribution there.

After you have started contributing to your 401(k), if your company doesn't offer one, then you can always open an IRA, traditional IRA or a Roth IRA, and then once you've done that, that in itself is a way of kind of getting your feet wet because - in the market - because depending on how those moneys are invested, you certainly have an opportunity to review them and to track their performance on the IRA or the 401(k)s.

But the other important thing, I think, is I believe that one of the first investments that a person should make is investing in a home. And at least investing in the home that you're living in. Perhaps you don't want to do large-scale real estate investing, especially right now, you know, it's a buyer's market but you don't want to get caught with too many properties that perhaps you aren't able to rent out. So at least own the home that you're living in.

CHIDEYA: You would say that even though there's in some places is kind of a downturn in the market?

Ms. BRIDGFORTH: Even though there is a downturn in the market, I still think that real estate, owning the home that you live in can be a wise investment. Otherwise, what you're doing as you're paying rent is, your building someone else's wealth, you're building their equity. And if you expect that you're going to be in a place for a couple of years, five years or whatever, then I think that it can still be a good opportunity for you to begin to build your own wealth.

CHIDEYA: So now that we have talked about a lot of different ways to get your credit straight and overlook your entire financial picture, what about investing? Is it something that most people should get ready to participate in - and I'm talking here, and I think that you are as well, about investing that's different from your 401(k)s?

Ms. BRIDGFORTH: That would be a point. Yes, where I'd say that it is a good time to begin to get your feet wet. Now, I'm not a big believer in jumping in - you're going to have to determine what your risk tolerance is. Can you live with your stock going down 10 percent? If you can, then fine. If it's going to make you anxious, then you may not want to jump in wholeheartedly. I also believe that it's important not to invest any money that you can't afford to lose. We don't know what's going to happen in the market. There are no guarantees, and typically, if you're investing in the market, it is important to look at it as a long-term investment.

CHIDEYA: That was Glinda Bridgforth of Bridgforth Financial. She co-wrote the book "Girl, Make Your Money Grow" with Gail Perry-Mason. And Gail joins us now to talk about the things you should do after you decide to invest in the stock market.

Hey, Gail, how are you doing?

Ms. GAIL PERRY-MASON (Co-author, "Girl, Get Your Money Straight"): Hey, great. How are you?

CHIDEYA: I'm great. So tell me a little bit about the market right now. There's huge hue and cry over the new highs in the market. And I remember - I mean, you know, there's a certain point at which a high is the high and then things start going down again. Do you have any concerns that we're the top of a market, or should people be willing to invest?

Ms. PERRY-MASON: You know, Farai, excellent question. A lot of us got burnt in the market. So we're like wait a minute, I'm not going to get back in. You know, I'm going to go back to what I already knew that work for me and that comes down to real estate and insurance. You know, I'm not - I'm staying away from this investing. That's where diversification comes in.

The market has - there's always ways to make money in any type of market. So there's - even though the market is at new high, all the companies aren't doing that well. I mean not every single company in the market is doing well. So you can say what's on sale right now. What can I buy? What is still going to be around for the long term? Where am I spending my money and where am I sending my money?

CHIDEYA: There's going to be a lot of people who have different levels of wealth and different levels of experience.


CHIDEYA: And so on the one hand, if you're somebody who is just interested in making a little bit more money but you don't have a lot to spend, what would be a good path for you? Or if you are someone who maybe you're getting close to retirement age, you got a lot of money on your 401(k)s and you've been a good saver and you have a little tad of money to do whatever you want with - how would those two scenarios be different?

Ms. PERRY-MASON: Okay, the two scenarios would be different because the person with a little bit of money - and say look, I need, you know, I need to make some money. I only have a little bit, and I heard it takes money to make money so the little - the first one's a little of bit, it's like, you know, how do you start? You can start investing, you know, a little bit at a time. I tell people always to go on, you know, like, you know, or call a mutual fund company, call the 800 number. You know, it's okay to put away $25 a month, $50 a month. It adds up over the long term, and it does. So first of all, a little bit of money - or they can also start an investment club and pull their money together with other individuals. Well, that's the person with a little bit of money.

The person who is say, okay, I have to retire - a got a large lump sum of money but I'm not sure if it's going to last me for the rest of my life. So what am I going to do? The worst thing I want to do is, okay, I'm 60 now, I have these large lump sum and then by the time I'm 70, you know, it's gone. And then I have to go back to work, and that is a true scenario on a lot of people's lives because I've spent my money.

Well, you have a large lump sum, you want to make it grow, you need to really sit down with - whether you call a board of advisers or financial adviser - and ask them and say, okay, if this is how much money I have today. Before you make a retirement decision, how long will this money last?

CHIDEYA: You know, I wanted to ask you about young investors. Any advice for them?

Ms. PERRY-MASON: The young investors have always, you know, out-performed the money managers. I even been put on a money camp for the last 11 years where I teach children everything from etiquette to golf and to, you know, how to work with a banker. But my main thing is I teach them how to go to the library and turn stocks into their employees. So they go - I take them aged eight to 18 and divide them up into investment clubs. And they run their meetings parliamentary procedure, and they take that money and they put it together as a group and they run it like a business.

CHIDEYA: Gail Perry-Mason co-wrote the book "Girl, Make Your Money Grow!" with Glinda Bridgforth. To get more investing tips and explore our entire Minding Your Money series just visit our Web site at

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