Let me just be clear and disclose the fact that I have no idea how investing works. I’m just sharing my experience and it’s in no way recommending anybody to do anything that I did. Back in 2008, at the urge of my former boss, I opened a self-manage broker’s account at Scottrade. Back then, I used to never cook and always bought my lunch and dinner and paid minimum for school loans. I didn’t have and shouldn’t have designated whatever money I had as “play” money to throw around, but I did scrape $800.00 and put it into the account. I was too scared to buy anything for the whole $800.00 I had in there, so I started buying cheap single stocks under $5 per share to never total more than $500.00. My definition of research was looking at a graph showing the price history of the last 5 years. I bought and sold a few stocks over the last 5 years and surprisingly, didn’t lose any money.
You want to guess how much I have in there? $1,724.86 is what I have right now. Of course I had to pay taxes on the earnings that’s not reflected in this amount, but compared to what I would’ve made in a savings account, this is really good. Even if I didn’t make as much, it still would’ve befenitted me since I left this money alone during the time of my life when I spent everything in my posession.
But now I’m contemplating whether to leave this money in there and continue to “play” with it or just take it out and pay it toward our student loan. I think it worked so far since I kind of thought of this money as not existing to help me ease the pain in case I lost it. However, since I see that the amount doubled from the initial amount and could really help with the debt pay down, I’m worried about losing this in the future stocks that I end up buying. What do you guys think? Close the account and put the whole thing toward the debt or leave some of it in there or just leave the whole thing alone?
Do you guys have “play” money that you use to dabble in some kind of gambling investments?
Michelle's Finance Journal 
I have absolutely no idea how stock markets work and I don’t think I am interested to find out just yet, it’s like rocket science! 🙂 I have not started saving yet as I am throwing every single penny towards my debt, however, I would like to save at least a bit in case of an emergency.
I only have $1000.00 in emergency fund and trying to reach $2000.00 by end of this year. This stock thing’s a fluke and I’m just wondering if I should not bother with this at all or continue to play with it very modestly.
I also know very little about investing, I don`t plan on learning until I can actively invest when debt is paid off.
I got lucky not losing money up to this point. Maybe I shouldn’t test my luck any more since I’m doing this blindly.
Well done on doubling your money! I have no idea how to invest but I definitely want to one day. It’s a tricky one… if it was me, I would probably take the cash out to go towards paying off the debts. You can always invest again in the future once you’re debt free. And you’ll be that little bit closer to becoming debt free.
I haven’t got a clue about investing but I definitely want to learn one day in the future! It’s a tricky one… if it was me, I would probably take the cash out and pay it towards your debts. You’ll become debt free that little bit quicker and you’ll be able to invest again later on.
You’re probably right. It could be just a distraction and end up losing everything. Thanks~
Wow you must be really good or lucky! The first time I opened up an account I was in college and really interested in investing. This was one month before the internet bubble burst. It’s not a lot of money you have in there…maybe just leave it in there and test your luck. Just don’t think overconfident if you do well and put more money that you aren’t willing to lose.
I think I just got lucky. I think most of the earnings was when I bought BP stocks when it was super low due to oil spill and sold after it nearly doubled. I bought very little around $300 worth, but it still brought me more money than other transactions~^^ After reading your comment, I’m thining maybe I should leave the initial $800.00 and take the rest out.
Hi Michelle, I posted a comment under this blog post a few days ago. It seems that WordPress has been having issues with comments from people blogging from the UK (how annoying! :)), therefore, my comment may have ended up in your spam folder. Thought I’d let you know.
Thanks for letting me know. I should be better at checking stuff like that. I apologize.
No worries, you couldn’t have known there had been issues with commenting. I should consider self-hosting, something to research over the weekend 😉
Hey Michelle, here’s my advice for you: I think you should move it out towards either your emergency fund or pay down your debt.
I think play money for the stock markets should only be available if one has no debt and they are saving the vast majority in safer savings/investing vehicles.
In a situation where debt needs to be paid down, that should be the focus. An emergency fund in a very safe account such as a high interest savings account is also a good thing to have. But that should be it.
Think of it this way: your debt has a fixed percentage of interest you must pay every month. I don’t know what the percentage is, but let’s say it is 5%. That means if you wanted to save/invest instead of paying down the debt, your savings/investments better make a return greater than 5%. And obtaining a return 5% and greater is very hard in this economy and there is considerable risk you must take to try for returns of that magnitude. And the earnings you would make on an investment are not fixed, unlike your debt. There is no guarantee that you’ll even make money in the stock markets. But there is a guarantee that you’ll pay a fixed rate of interest on your debt.
One last thing, I am going to make an educated guess that the majority of the growth of your money invested in the stock market has been capital gains. Capital gains can fluctuate up and down. You’ve had an incredible stroke of good luck having your stock holdings double from what you bought them at. But they are mostly capital gains. The capital gains you have made could double again tomorrow, or they could plummet to less than what you bought them for.
So in the face of uncertainty, I would recommend paying down the certainty (debt) rather than investing in uncertainty (the stocks).
Hope that helps!
I see your point. Although the money I have is the amount that’s finalized. I already sold my stocks. That’s why I wanted to ask for advice before I buy something else. Thanks for such a thorough advice.
Sorry I misunderstood your original situation with the money!
I would still recommend to pay down the debt or place the funds with your emergency fund.
No worries. I got what you’re saying. I’m still going back and forth. I’ll definitely write about it once I finally decide what to do.
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