By Victoria Mejicanos
AFRO Staff Writer
vmejicanos@afro.com

With economic uncertainty high, many are hesitant to take a risk with the money they do have by making investments. But that doesn’t mean one should shy away from the conversation altogether. 

So why do people “invest in the stock market,” or purchase shares of a company?

According to information released by the U.S. Securities and Exchange Commission (SEC), “investors buy stocks for various reasons.” Including:

• Capital appreciation, which occurs when a stock rises in price
• Dividend payments, which come when the company distributes some of its earnings to stockholders
• Ability to vote shares and influence the company

The SEC also reports that “companies issue stock to get money for various things,” such as :

• Paying off debt
• Launching new products
• Expanding into new markets or regions
• Enlarging facilities or building new ones

This week, the AFRO spoke with experts who say making any kind of investment is all about education, discipline and perspective.

J.R. Fenwick is founder and CEO of a stock market education program called FLip that Stock. He believes that the stock market is “America’s great equalizer.”

Fenwick saw that people of color were hesitant to invest, thinking it isn’t for them and viewing it as gambling. However, he realized that the stock market is how many CEO’s maintain their wealth and net worth. 

“If all we do is just have ‘a job,’ we’re at maximum risk,” Fenwick said. “A stock is nothing but a slice of ownership in a company.”

With this in mind, he aimed to teach people about how to use the stock market to their advantage in a fun and engaging way. Through his company, Flip That Stock, Fenwick works to reframe the act of investing in the stock market and educating people on how to do it safely. 

“It’s just like going to the store, they have dollar items…all the way up to items that cost thousands,”  Fenwick said.  

The entrepreneur says that viewing stocks through a regular shopping lens can take away some of the fear of investing.

For Willie Jolley, award winning speaker and author of “Rich is Good, Wealthy is Better!,” investing all starts with a person’s mindset and discipline. 

“Wealth starts in your mind, then it manifests in your bank account,” said Jolley. “If you’re going to create wealth before you invest, you have to have discipline. Discipline means that this isn’t something you do haphazardly. 

“You don’t jump into something because your cousin told you about a hot stock,” said Jolley. “You must get the discipline to do your research and to learn how investments work and how money works.”

 Jolley says there are eight different types, and people need two to safely invest: 

1. Earned income: Money made from a job.
2. Profit income: Money generated by buying something and selling it at a profit.
3. Interest income: Money earned from loaning money and collecting interest.
4. Dividend income: Money generated from stocks, bonds, or other assets that pay dividends.
5. Rental income: Money generated from renting something to someone else. 
6. Capital gains income: Profit from assets that increase in value, such as real estate.
7. Royalty income: Money from books, music, ideas, or other intellectual property.
8. Residual income: Money that continues to come in after the initial work, such as insurance sales or network marketing.

Both Fenwick and Jolley say that common myths abound. But unlike what some may think, the decision to begin investing does not take a lot of time and money. People can open free investment accounts with places like Fidelity, Charles Schwab, and Robinhood. These companies will also often offer free advice when an account is opened.

Fenwick says when it comes to investing, people should start with what they know. Companies that consumers are fond of are solid places to start. 

“Stocks come in all different price ranges, right?” said Fenwick.  “If you have $50, $100, $1,000, you can get started. You can find a stock in any price range to fit your budget.”

As a new year approaches, experts say the biggest barrier to investing is hesitation. Getting over initial hesitation and staying educated about one’s investments can pave the way to long term wealth.