If Jake did it, why can’t I?

In August 2022, 20-year-old Jake Freeman made headline news after making over 100 million dollars in one month trading the meme stock Bed Bath & Beyond. Hearing this experience left many young, green, and aspiring investors pining to enter the stock market, betting on companies with the hope of cashing in big. If Jake did it, why can’t I?

Jake may be young, but he wasn’t new to the game.

Jake is an applied mathematics and economics major who’s interned at a hedge fund. He has “worked in the financial industry since 14 years old” and has been interested in finance since he was 12. Jake co-authored a paper called Irreducible Risks of Hedging a Bond with a Default Swap at age 16. He also had a lot of capital to work with, raising much of the money he invested from friends and family.

This isn’t to say that you shouldn’t invest if you’re not a whiz, but Jake’s success story underscores the importance of proper financial education. Mistakes, especially in the realm of investing, can be costly.

Here are some of the things aspiring investors should know before taking the leap:

1. Walk before you run.

Remember that investing is only one component of your financial journey. Skills like cash flow management, saving, and protecting your wealth through insurance are underrated but essential prerequisites. Skipping these critical steps can set you up for failure in the long run.

2. Mastering fundamental investing skills is important. Investors should understand:

  • Their tolerance and capacity for risk: Stock market investing is not for the faint of heart. Are you willing and able to ride the waves of the markets? How would you feel if you lost all of the money you put into a particular company?
  • Fundamental investing terminology: What is my basis? How do I calculate my return?
  • What a stock is and how it makes money: How do appreciation and dividends help me make money?
  • How to reduce their risk: Know the merits of diversification and proper asset allocation.
  • The tax repercussions of investing: It’s not enough to know how to make money – you also have to focus on how to keep the money you make. Know which types of accounts work best for holding different kinds of investments.

3. Hiring the right advisor can help you achieve investing success.

Find a financial advisor you can trust. If learning detailed information about investing doesn’t excite you, you can lean on this key expert to manage your investments for you. However, this doesn’t mean you’re off the hook! It’s still important to gain a basic understanding of investing to help build your agency and empowerment and to know whether your advisor is doing a good job!

Contrary to popular belief, investing isn’t the silver bullet to quickly building massive amounts of wealth. However, armed with the right education and support, you’ll be well on your way to knowing how to responsibly grow your assets over the long haul.


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 About Akeiva M. (Thomas) Ellis, MSFP, CPA/PFS, CFP®, ChSNC®, Financial Education Specialist

Akeiva is the Financial Education Specialist at the firm. In her role, she creates financial literacy programming for our next-gen clients, speaks and writes on behalf of the firm, works with select clients in a Wealth Planning Associate capacity, and helps implement various Diversity, Equity, and Inclusion (DEI) initiatives.

This report is the confidential work product of Ballentine Partners. Unauthorized distribution of this material is strictly prohibited. The information in this report is deemed to be reliable. Some of the conclusions in this report are intended to be generalizations. The specific circumstances of an individual’s situation may require advice that is different from that reflected in this report. Furthermore, the advice reflected in this report is based on our opinion, and our opinion may change as new information becomes available. Nothing in this presentation should be construed as an offer to sell or a solicitation of an offer to buy any securities. You should read the prospectus or offering memo before making any investment. You are solely responsible for any decision to invest in a private offering. The investment recommendations contained in this document may not prove to be profitable, and the actual performance of any investment may not be as favorable as the expectations that are expressed in this document. There is no guarantee that the past performance of any investment will continue in the future.

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