Nov 5, 2007

I bought a (fraction of a) stock!

A few weeks ago, I bought a very tiny share of Berkshire Hathaway B stock. This is the first time I have ever bought an individual stock. Until now, all of my equity investments were in mutual funds only, so this felt like a really big step for me - even though I only spent $50. $46 went toward the purchase and the other $4 went toward Sharebuilder's commission. The only reason I even took this plunge was because Jonathan posted about a $90 Costco bonus for Executive members (which we are) who open a new Sharebuilder account. We haven't received our $90 Costco giftcard yet but I expect it to arrive in the next couple of weeks. The best part is that our tiny share of BRK.B is already worth $52. I don't expect to make a fortune this way (obviously), but it was good to push beyond my comfort zone.

Expanding Personal Boundaries

I've discovered that I'm not the only one who finds expanding my personal boundaries to be a worthwhile goal. Over at Money Smart Life, Ben posted about what he calls extreme investing, "extreme" being a subjective term. As he puts it:
The reason you might want to do a little extreme investing is that it can help broaden your financial horizons. As creatures of habit we tend to stick with what we know, whether what we're currently doing is the best thing for our situation or not.
He gives some guidelines for practicing extreme investing, the most important of which is that you should play with only a small amount of money - specifically, an amount that you can afford to completely lose. That's exactly what I did in buying one-hundredth of one share of BRK.B - actually, we come out ahead on this one since our cost was only $50 but we'll be getting $90 from Costco, which we would have spent anyway.

My Next Venture: Prosper

I seem to be getting all of my extreme investing ideas from Jonathan. I'm thinking that my next project will be to open a Prosper person-to-person lending account with $50. After I fund my first loan, Prosper will give me $25, which effectively reduces the amount I've risked to a mere $25. However, I need to learn a little bit more about Prosper, so I hope my peers who've blogged about lending on Prosper won't mind answering a few questions that I haven't been able to find answers to on the Prosper web site.

Investing for the Future

As I've mentioned previously, one of my major goals is to study personal finance and learn much more about money management than I currently know - basically, I want to give myself an unofficial education equivalent to that of a certified financial planner. But I've tried reading the CFP textbookI asked for and received last holiday season, and I just don't have the brain power to study right now. Nevertheless, I think a little extreme investing is a fun alternative for the meantime to help me learn about investments outside my comfort zone.


Anonymous said...

Wonderful cause... If I can help, please let me know...

Anonymous said...

I'm glad you like my extreme investing post, I agree Johnathon does have some pretty interesting and valuable investing ideas.