Guest Editorial: Small Potatoes; Investing for Those with Low Income: Introduction

By Ray Maratea —

Welcome to Small Potatoes, an editorial piece designed to help those who believe their income level prevents them from participating in the stock market grow their savings.

Investing in “Small Potatoes” is an idea that came to me one day when I visited a Wendy’s in Owego, N.Y. While waiting for my order, I had the opportunity to speak with one of the employees there and was surprised to learn he was unaware that Wendy’s was a listed stock that he, and anyone else, could own.

I thought about it for a while, wondering whether people working in similar entry-level, minimum-wage jobs believed investing was beyond their reach. I am here to tell you it is not beyond your reach; owning stock is achievable for you. You need about $25, access to a computer, and the willingness to take the steps listed here. (If you do not have a computer, you can use one at your local library.)

Step 1. Find a brokerage firm that will allow you to open an account without a cash balance. CharlesSchwab.com is one, and they are available to answer questions 24/7.

Step 2. If you do not have a checking account, open one to transfer money to your brokerage account online. Brokerage firms are very willing to assist you in every step of the process.

Step 3. Determine what type of investment account you can use. Two of the most commonly used are the Roth IRA and the Traditional IRA. Roth IRAs use wages on which you have already paid taxes and therefore earn “non-taxable” income when withdrawn later. A Traditional IRA allows you to use pre-taxed earnings; however, at retirement, you will pay income tax on withdrawal. I do not want the government to share in the growth of my investment, so I lean towards the Roth IRA.

Stock Selection: You may be wondering how to pick stocks to invest in. I have made picking stocks easier by finding the names of the companies that make the products I put in my shopping cart each week. For example: Do you use Tylenol? What breakfast cereals do you eat? What is your favorite brand of coffee, etc.?

Make a list of these products, including the manufacturer, to find the stock market name and symbol of the product(s). For instance, the symbol for AT&T is “T” Using Google Search, you can find any stock that may be of interest. Sometimes, you may have to search “Who owns this product,” as it may be only a distributor listed on the package and not the name of the company that manufactured it. Google Search will also provide you with the stock symbol and price per share of the company stocks you are considering investing in.

I am ending this column for those of you who may be interested in following the above steps and have a good-sized assignment. If you have any questions, you can contact me by email at investsmallpotatoes@gmail.com. Otherwise, please check this publication for more on “Investing with Small Potatoes.” 

(Raymond Maratea is a former resident of Candor, who built his home on Schumacher Road.)