TSME #018: Single Moms and Wealth Building

Stock market beginners often want to know how to get in on the ground level of a stock that is going to rise. They often ask about IPO’s. An IPO is an initial public offering, or a company that is going public for the first time. There’s usually speculation on the Internet and in the news about how this is a great time to get into that stock. Should you own a stock when it first goes public? Tyrone's opinion is that you should never purchase a stock when it first goes public, because a company that is just going public raises money through the sale of stocks and sometimes bonds to expand their business. At that point we don't know anything about their marketing plan and what they are going to do with the money that they raise. This means there is more risk involved with that stock. There is no track record for how much the company is spending and earning. The closest you should ever come to buying an IPO is one year after the company has gone public, because there will be one year of revenue and four quarters of revenue growth as proof. In this episode, Tyrone Jackson interviews his student Darcy Parsons. Born in Peekskill, Darcy attended school in Buffalo before moving to New York City where she became a producer. She worked on SNL for a few years as segment producer for anything filmed outside of the show. With experience in advertising and producing Darcy eventually moved to Los Angeles and worked in commercials. She opened her own company, Brewster Parsons, which specializes in photo real visual effects, direction, design, and project management. Darcy had invested in the stock market in the late 90's and lost $10,000. She swore she would never invest in the stock market again. Instead she dappled in real estate investment. But when Darcy met someone who knew Tyrone and recommended his class, she decided it couldn’t hurt to hear his method. She was inspired by The Wealthy Investor program because there was accountability and monthly classes to make sure that the students are current with what is happening in the market. As a creative and a visual person, she enjoys that Tyrone's method simplifies something that is so extremely complex. Darcy went to the class for 6 months before making her first trade. She made her first trade with Ebay and made $750 on a volatility trade. She made $2,000 her first month and became a believer. In the Wealthy Investor Program, Tyrone and his students are simultaneously both traders, taking income in off a covered call or volatility trade, and investors who build wealth by building positions on $5 buy signals. Darcy has a few long-term positions in stocks that she uses this technique to build. This basically means that when you buy shares of a stock, you wait for it to go up five dollars to prove that it’s worthy of another round of investing. Darcy also believes that dividends are hugely important. For example, Darcy owns Macy’s stock, which has dropped, but she is still capturing the income from the dividend. She also believes that this stock is a good long-term “date” and plans to hold onto it for a while. As a single mother of twins, Darcy is very grateful that they are enthusiastic about the stock market. Her son actually begged to open a trading account, and she opened one for him 3 months ago. Darcy’s children will have this financial education that will affect the rest of their lives. If she had had this education when she was younger living in New York in the 80’s, she says that instead of buying shoes she would have bought Microsoft! To those who are afraid of losing money, Darcy says that it is not realistic to think you can invest and never lose anything. You can’t control what happens, so you set off with the best intentions, acknowledge that there is some risk and try do things with the lowest risk possible. So you assess what it looks like and go with your gut. Your gut should be telling you that you deserve to grow your wealth too! Visit TheWealthyInvestor.net to start your financial education today. As Tyrone says, “Stay open and stay positive!”