Okay, okay, cash doesn't rule everything around me, but wouldn't you agree that having a little extra cash is a nice thing? I know, I know, I should be content with what I have, but there are so many things out in the world that only money can buy, like happiness. So enough about my desires, let's talk Investments. Wooooh, big word for a small man like me.

So how do you start investing? The reason why I got into investing in the first place was because I used to work as an assistant to a market maker (trader) on the Options floor of the Pacific Stock Exchange. For people who don't know, Options give you the right to buy or sell a stock on or before a set date. It was a great experience. I sweated alot and bought enough coffee to learn all the Starbucks employees by name, but the most valuable thing I got out of it was that I was exposed to the stock market.

This is what I figure. You get a job at McDonald's flipping burgers and scrubbing the smelly toilet with bleach and a toothbrush. You work hard, sweat, and put your back into it, and 8 hours later what do you get? A measly 40 bucks. Now there's nothing wrong with that, and you are assured that 40 dollars. However, if you invest that same amount of time reading and gathering information about a particular company, you can invest in stocks/options/bonds, and make an infinite amount of money by just sitting on your butt at home and pushing a mouse button. Of course there is always risk involved in investing your money in equities (having partial ownership of a company), but a small monetary loss sure beats scrubbing that public toilet (and you know how bad guys aim).

The first step toward investing is to read the Wall Street Journal and or Barron's. Student rate for the journal is about 100 bucks a year, and you can read barron's at Barnes and Nobles, Borders, or some other comfy book store with nice cozy couches. Although they may seem difficult to read in the beginning because of their undoubtedly boring nature, these current publications will give you an idea of what is going on in the financial world. I used to read every article in the journal, front to back, but it took too much time washing off all the black ink that had accumulated on my fingers. Now I flip through it and read only the articles that interest me. Somebody told me that people who read the WSJ make a lot more money than people who don't. Also read the WSJ's Guide to Investing and Money for basic definitions and a general idea of how the stock market works. This book was integral in my figuring out the ins and outs of the market.

When you're finished doing all that, visit the web sites I have linked from this page. One of the best investment guides online is the Motley Fool's Investment Website of Finance and Folly. They have a beginner's guide to investing which explains some terms such as P/E ratio, Current Ratio, Cash Flow, etc.. Read, Read, Read. You should also join an investment club. No, it is not nerdy to do so. I joined the California Investment Association here at Berkeley's Haas School of Business. They have presentations by club members, people from big corporations and mutual funds, and a whole bunch of other crazy information. You can talk to other people and ask their advice. Most people are willing to share their knowledge, but never trust anyone's advice, especially from online message boards. The best thing to do is to read everything about a certain stock and formulate your own opinion. Watch the stock react to certain news, and events, and you will see that there is sort of a set formula or pattern that occurs.

Once you have a list of stocks that you are interested in, open an account online. I invest with Price Waterhouse. @ 12 dollars a trade, it seems okay, but there are a plethora of other online brokerage houses like Datek, etrade, Ameritrade, and National Discount Broker. These different brokers have varying bells and whistles so research before you choose one. You usually have to have a minimum of $2000 in the account or else they charge you. It's pretty cool because if you just keep your dough in the money market account, it will pay you 4.5% interest or something which is higher than most banks, and unlike a CD, you can close the account whenever you want. Some accounts are FDIC insured, like mine.

Use the investment/research tools they provide for you on the website. You can even get free real time quotes without having to have an account. Check out etrade's site. Read the message boards for current info but don't ever believe everything written. Another good resource is Valueline, which evaluates stocks for you in a one page summary. It can be found in your local school or public library, or you can subscribe to it. Insider trading is a great way to tell if your stock is going to move. This information can be found on the web (ie. my.yahoo.com). Order Annual Reports from the company. It's free.

Don't panic if your stock drops. Also, don't be a moron and dump the stock and lock in your loss, unless you know that the company is going to go bankrupt. Iomega and Komag were two companies I bought that initially dropped like my GPA, but I held on to them and I recently sold for a decent profit. So the moral of the story is: buy high and sell low, or was it buy low and sell high? In any case, don't panic. Oh, one more thing. Peter Lynch, former head of Fidelity's Magellan Fund and Warren Buffett, head of Berkshire Hathaway, or one of the two always used to say, "Invest in what you know." Buffett, a really rich guy, owns a lot of Coke and McDonald's stock. Lynch, another really rich dude, says that if you can't explain why the your stock is a good buy using a crayon and a piece of paper, then don't buy the stock. Well anyway, good luck.