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How to Invest in Stocks, Cryptos and Startups with Less Than $500

Today's topic is one of the most critical issues that we can discuss in our life and, right now, is the most
crucial time to talk about this particular topic.
We're talking about investing. Just so everybody knows, I know everybody is like, "Paul, you are mad
Jamaican. You have had like 50 million jobs." Let me hit you with another job that you might not know I
had. When I got out of undergrad, my first job was working at an investment bank. But, I wasn't
considered an investment banker. I was a research analyst. I was an equity analyst.
What's an equity analyst? I was junior on the team, and I just came out of undergrad. We analyzed
companies. We would go to visit the companies, and we'd look at the products. We'd talk to all the
executives from the CEO down, and scour through their financials.
My team had to predict where we think the company is going, where we believe the stock is going. Is it
going to continue to go up, or is it going to go down, or is it going to remain flat? Then we'd have to
come up with a justification of why. Right?
Now, we would take that research, and then we would give that research over to our traders at the
investment bank, and our brokers. They would go out, and they would go out, and they would then
advise you on what to do. Typically when you talk to a broker, they're telling you what some research
analysts have been researching for quite a long bit of time.
This is how I started. I did my CFA, did my Series 7. This feels like I've come home to talk about this topic.
Here's the problem. Despite all of that expertise, I was not investing at that point in time. I own a
freaking stock, and I didn't own anything but debt, that's all I had.
It wasn't until the last recession, 2008, when I started investing. When I started investing, I didn't have
any money. I was a matchmaker that folks were making fun of at that time.
So how did I start investing in 2008? My wife and I put $500 aside, and we said to ourselves, "We are
going to invest in stocks even if we can't afford what's considered a round lot." If we had to, we would
just buy one share, or we would buy two shares. It didn't matter; we would just start.
We bought one share over here, two shares over here, ten shares over there. That has evolved over the
years to where we have a portfolio in the seven figures. It started with one share at a time. That's why
today is so important to me. We're talking about how do you invest with $500, $200, how do you just
get in? We'll also cover how you grow it.
Meet the Panelists
Cassandra Cummings – Stocks & Stilettos Society
Cassandra started Stocks in Stilettos to help teach women after seeing her highly educated friends didn't
know how to invest.
Damien Peters – Wealth Noir
Damien Peters built SBM (Single Black Male) and is on a mission to build generational wealth for his
family.
Andy Ayim – Product Leader, Problem Solver, Investor
Andy is the person to know I the UK when it comes to investing and the entrepreneurial community. He
is his own brand, an angel investor, and ran Backstage Capital in the UK.
David Mullings – Blue Mahoe Capital Group (Jamaica) – and airport patty eating champion
David gives us unique insights from the Jamaican stock market, and he can eat anyone under the table
when it comes to free patties from the Kingston airport.
Is Now a Good Time to Start Investing?
Short answer- it's always a good time to get into the market – especially if you plan on making long term
investments.
What should people do with $500 or less to start?
Start with one share. It's about baby steps. I think it's really hard for people to overcome that. They feel
as if they don't have enough money. You really do, though, there are some great companies on sale for
less than $100, for less than $20. It's just a matter of getting started.
The Breakdown on Crypto
You have Bitcoin, which is the mother of all coins, then you have altcoins, these are all your other coins.
There are a number of different coins that you can invest in. What you need to keep at the top of mind
is that you should only invest money that you're willing to lose. Bitcoin and altcoins are relatively longterm investments.
You're not going to get rich overnight. If you're putting money into these highly speculative investments,
you might have to wait it out for a while. When we had the big boom with Bitcoin a few years ago, the
ones who profited the most had been it Bitcoin for years. It wasn't an overnight success.
The second thing you need to realize is how they've opened up access to purchase Bitcoin on a myriad
of different platforms. You can buy Bitcoin on CashApp, Robinhood, even some vending machines. It's
very accessible. Again, start very small with fractional coins and things of that nature.
Also, if crypto is your jam, make sure to keep your eyes open to what we call ICOs (initial coin offerings).
There are always new coins coming on the scene. One that was popular was a coin that was run by a
black-owned team. There are a lot of options to break in on the ground-floor with crypto.
With Bitcoin in the US, we primarily use Coinbase. It's relatively easy to open an account with Coinbase.
But, as I mentioned earlier, you can now even buy small, fractional units on platforms such as
Robinhood, or even Cashapp. So, there are a lot of different ways to enter the cryptocurrency market.
You don't have to have a lot of money. If you want to put $50 in, $100 in, say out of your initial $500
investment, you can break it up that way.
What is generational wealth?
Generational wealth should be defined by individuals for what makes sense to them. When I say
generational wealth, what I mean is being able to pay for my grandchildren's education. You mentioned
that I went to MIT for grad school. I couldn't afford to go there for undergrad, even though my dad
really wanted me to. So I think about how I can set up trust, assets, lifestyle, and core competencies that
will be able to pay for my grandchildren's college education before they're even born.
Top three challenges to building generational wealth:
• Transforming Salary into Wealth
• Understanding Net Worth
• Not spending time thinking about their own money
How can people start angel investing?
In the last five years, the game has changed because we have these equity crowdfunding platforms.
These platforms let you invest as little as $100 into your favorite brands and companies. When you're
making that small investment, it's not really for a massive return. You are paying for that education. It's
a lot cheaper than paying for an MBA program. You'll learn the key terms in a contract of a startup, how
to run due diligence to understand what you're investing in with startups.
The thing about playing the long game is that you must embrace the downside, to accept that not every
investment will payout, some will be losses.
In the US, you have to be what we call an accredited investor. That means that you have a net worth of
over $1 million, excluding the value of your primary residence, your home, or you have an income of at
least $200,000 a year for at least two years.
In the UK it's a little more relaxed. We have something called a sophisticated investor, which is someone
who basically earns around $100,000 a year and is aware of the risk of investing in the asset class.
In both markets, the only other way you can get in is through what we call an angel syndicate. That's
through putting as little as $5,000 or $10,000 into a group of other angels who are investing in the
startup. The truth is, if you have access to someone who is starting a business, you can invest. If you can
get to someone early enough, you can invest. There's a guy called Mike Walsh, who invested $5,000 in
Uber, because he got there early enough to write the check for it to work, and write it off. If you have
access to those startups, you can get in early. The challenge is when you're building your strategy of
investing in startups, 95% of startups fail.
On the US side, there's a jobs act that was passed under President Obama, so there is a way to invest,
it's called through Regulation C, regulation crowdfunding. You could invest I believe it's 10% of your net
worth, or a certain dollar amount. You have to use a platform that's vetted by the FTC. Wefund is one of
them. Republic is another. Invest in what you understand, please.
Why is the Jamaican stock market doing so well?
The number one reason the Jamaican stock market has been so successful is unlike the US, where it was
cheap money that was helping to fuel their stock boom and companies were doing a lot of buybacks,
and companies were actually the largest purchaser of their own shares, Jamaica paid down debt.
Jamaica reduced the GDP ratio from 147% to 97% and is on its way to 60%. The government has been
generating cash, paying down debt, and instead of the government saying 14% interest on our
government funds, and nobody would buy anything else, interest rates have come down. So, people
moved into the productive sector. The government isn't crowding out private investors anymore.
The second reason we need to think about is Jamaica's location. Think of Jamaica as the Singapore of the
Western Hemisphere. Jamaica is the third-largest English speaking country in the Western Hemisphere,
US, Canada, and then Jamaica. We've seen jobs that were outsourced to other countries coming back to
Jamaica for call centers. We have a huge, naturally protected harbor, just like Singapore. That port can
support post-Panamax vessels, only two ports in the Caribbean can accept post-Panamax.
And how is it doing now? Every market in the world is down right now. We're down somewhere 25-30%.
It depends on where you're looking at. But, there are specific companies that are actually up. If you're
looking at the long term, this is great. Over five years it was up 300% plus, you tend not to want to invest
at the top of a market. Right now is a great entry opportunity, because everything we want to buy is at a
discount. Look for companies in strong long-term growth industries with good management. Look at
buying and holding for the next five years.
How can people outside of Jamaica invest within the Jamaican stock
market?
To get into the market is actually really hard, that's why Blue Mahoe Capital exists. You can't just go
online and set up an account to start buying stocks in Jamaica. We are a private investment firm that has
a brokerage founded in Jamaica. We buy stocks there, and we also buy some private companies. If you
want to do it, since we're not public yet, we're going public later this year. If you want to do it right now
you have to be a private investor with us, or you can go to our group in Canada, you can open an
account with them whether you are in US, Canada, or the UK.
How do people start investing?
Open an account, get online. It takes ten minutes, maybe, to get an account open. Then you have about
a 24 hour waiting period. Once you get your account number, move some money over there and buy
your first stock. It's really that simple.
One thing that's been great now is that after Robinhood got popular enough, every single brokerage
now offers free trades. Several of them are offering fractional shares now, so share prices are much less
of a stopping factor. I always recommend buying an SMP or Vanguard to start. I'm a huge fan of Robo
Advisors because if you don't know what you're doing, they ask you five questions, you throw $100-
$100,000 at them, and they will allocate you across a bunch of funds. Automated or Robotic Advisors
are a great option to start.
I would just supplement what's when said already. There's a number of platforms such as Robinhood,
FreeTrade in the UK, and Vanguard. The key thing to compare across the platforms is the transaction
fees. Understand how much they're taking each time you put money in, and how much they're taking
each time you take cash out, because it adds up. Pay attention to who is taking the lowest transaction
fees.
Don't start with single stocks, because investing is all about diversification. The best way to get
diversification initially is through index trackers like the SMP 500, or even managed funds. There's a
number of those out there as well. Get into the habit of investing every month or every quarter. Once
you're an active participant, suddenly, you start learning.
What investment strategy is best for first-time investors?
There's a very well-known strategy, which is balancing between stocks and bonds. The old rule used to
be you take 20% in bonds, and you add on 1% for every year. Long story short, buy BTI, and BMD. These
are two exchange-traded ETF funds. If you're concerned about the risk, do more bonds. Maybe do 30%
or 40% in bonds, but realistically most people take every dollar that you have, put 80% in VTI, that
invests in the entire US stock market. BMD invests in a mix of bonds, and this is a tremendous early
starter strategy.
To add to that, Ray Dahlia has got a great video on YouTube called "How the Economy Works," it talks
about the big cycles of credit and debt. The reason I said SMP 500, for example, is because, on average,
those index trackers outperform fund managers by 96%. The median return that you get from index
funds outstrips VCs, outstrips the median return of managed funds or stocks and shares. It's actually one
of the safest strategies, as long as you are averaging. Averaging is what I was describing around putting
like $100 every quarter so that sometimes you're investing high, sometimes you're investing low, but
you're averaging out over time.


What books do you recommend for first time investors?
Cassandra: The Automatic Millionaire by David Bock

Damien: The Millionaire Real Estate Investor by Gary Keller of Keller Williams


Andy: Profit First by a guy named Mike Michalowicz

David: The Warren Buffet Way by Kenneth Fisher, Peter 

Lynch and Robert G. Hagstrom & The Little Book
of Common Sense Investing by Jack Bogle