Hi. My name is Jennifer Welsh, and I'm the founder of Money School.
I help people start investing in the stock market.
In my previous life, I was about the least responsible person with money that you would ever meet.
It was a lot of eating out.
It was eating and drinking and clothes and shopping and-and things like that that built up to
$30,000 of credit card debt, slowly but surely over probably about a decade.
Itt weighed very heavily on me.
I was embarrassed. I was ashamed.
I kind of kept it a secret from most people.
But after confiding in a friend, Welsh realized that she needed to formulate a clear plan to get out from under her debt.
The first thing I did was I created a spreadsheet and I entered in all the information of who I owed money to, what the interest
rate was, when that interest rate was expiring.
So, the next thing I did was I consolidated all of the credit cards that I had.
There was like five of them at the time.
So I started shopping around for a credit card with a friendly introductory interest rate, and
I found one that had a 24-month, 0% introductory rate.
So what I did was I transferred all my balances to this credit card.
So I considered that 24-month expiration date my deadline.
So I took my total debt and I divided it by 24 months, and it came out to be something like
$1,300 a month.
And I think a $1,300 a month down payment towards anything new is hard,
hard to accomplish.
And it felt impossible to me.
I divided it by four.
Every Sunday I logged into my one credit card, one credit card platform, and I paid
$320 a week or something like that every week.
So I- I broke, I guess, this big goal down into small goals.
But I also had a deadline.
In exactly 24 months, Welsh paid off her debts.
She didn't keep a strict budget, but knowing she had to make that weekly payment incentivized her to change her habits.
I was so motivated by this weekly goal that I- that I stayed home more
often. I started cooking more.
I realized that the things that I thought were fun and fulfilling, like going out to eat, going out for drinks and
socializing, while those things are lots of fun, they were actually like kind of the root of the problem.
So I didn't cut anything out entirely, but I reduced the number of nights that I would go out.
Welsh had originally opened an E-Trade account in her 20s, right after the 2008 stock market crash.
She was a waitress at the time and still had lots of debt.
But her father, a stockbroker, had advised her that if she was interested in investing, now is the time since, as he put it,
"Everything is on sale."
And I was picking stocks, and I did not have a clue what I was doing.
I didn't have a strategy.
I didn't have a methodology.
I was- I didn't know what I was doing, but I was interested.
I was interested.
But after moving to New York to work at a startup, she stopped investing, only opening her E-Trade account if she needed to sell
stocks for some quick cash.
Then in 2015, when she had finished paying off her credit card debt, her investing mindset changed.
An interesting thing happened when I made my last credit card payment.
I was already accustomed to spending $300 a week or more towards my debt, putting that money towards my debt.
So instead of saying, "Oh, we have $300 a week extra now," we started investing that money, my
husband and I. And then when I started watching my investments kind of take off and snowball and
into significant savings, I was really psychologically affected by
that in a positive way.
And the things that I used to spend or spend frivolously on became less appealing to me.
Welsh she and her husband were investing with an advisor during this time, but after the 2020 stock market crash, she parted with
her advisor, feeling empowered to invest on her own again.
I'm no longer a struggling waitress.
I don't have my credit card debt anymore.
And my dad's, uh, my dad's advice just all came back to me.
"Everything's on sale." We agreed to an amount that we would start investing every week, and
I didn't want to make the same mistakes as before.
I didn't want to pick stocks willy nilly, and I didn't want to buy stocks that I would want to sell anytime soon.
So I was very dedicated to the research and it was Covid, and we were locked in the house anyway.
So I was baking bread, and I was learning about the stock market.
Today, Welsh holds stocks in eight individual companies and six funds.
But her overall investment strategy has changed over these past few years.
It can be very interesting and exciting to try to pick companies and pick stocks, but at the end of the day,
investing in broad market index funds is the simplest and most reliable way to invest in the stock market
without a ton of risk.
Broad market index funds outperform actively managed mutual funds and probably most stocks
anyway.
She especially recommends index investing for new investors.
I just think it's a great way to get accustomed to volatility in the market, logging into your dashboard,
seeing your money move around, and understanding kind of the basics of how it works to manage a brokerage account and
then start investing in stocks later.
Overall, Welsh says that the most important thing to remember when it comes to investing is to stay the course.
Don't pull money out when the market starts to drop or try to time your investments with market booms.
Make investments that you plan to hold for the long term.
History shows us that the stock market climbs over time.
History shows us that timing the market is not effective.
History shows us that patience and dollar cost averaging and contributing on a regular
basis is-is not only effective but super powerful and can make small amounts of
money saved and invested on a regular basis for a long period of time can make the average
person quite
wealthy.
Invest in you. Ready, set, grow.
CNBC and acorns.