How Your Holiday Spending Can Help You Invest

Did you know that the average American spends about $800 on gifts over the holidays? That money goes to the companies that make the gifts, their suppliers, retailers, and employees. And don’t forget the big winners: For the companies that record blockbuster holiday sales, the spoils go to the shareholders in terms of dividends (profit shares) and increased share prices.

Now that you’ve been following along with my posts, it’s time to put your spending and investing to work this season. The holidays are a great time to look for coming trends, both economically (think in terms of whether or not people are feeling positive and spending more) and from an investing perspective (think about which companies are making the most popular gifts, for example).  As we enter another winter season filled with cheer and shopping, pay close attention to the details and find ways to make the information at your fingertips work for you.

Between now and January, you will probably be inundated with “listicles” — articles like, “The Top 10 Gifts for Mom.” Instead of using these prompts as a tiresome reminder of how much shopping you still have to do, look for patterns in the messaging and narrow down what companies you think are going to be successful this holiday season based on the buzz. This is where you’ll want to consider putting your money to work.

I believe that people are smart — after all, we vote with our wallets every day — so it’s not such a giant leap to use that knowledge to start or build up our own portfolios. As you dip into your wallet over the next few months, keep this in mind: If you like a product or brand enough to buy it once (as a customer), it’s worth finding out whether buying it a second time (as an investor) will help grow your portfolio.

It was only a few years ago that Amazon ($AMZN) started to ‘own’ the holidays. Before we knew it, frequent mall trips were replaced with towers of boxes delivered to our homes. Fast forward to today and the company’s stock price has almost tripled. The lesson: There’s big money in changing behavior, so pay attention.

Even if you trust someone else to manage your money for you, you can create a virtual portfolio and try out some of your own ideas. This will help you learn more about how investing works and maybe down the line, you won’t have to pay the yearly fees for these services.

As you go into spending mode, keep in mind that your dollars end up somewhere. Follow the money and remember that it’s your spending that drives the economy — so you may as well participate as an investor to #GetYourShare.

Jane Barratt is a member of the DailyWorth Connect program. Read more about the program here.

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