The most important thing about your first investment

Your first investment seems a very critical decision
When I first started investing, my first investment in buying some shares was a major decision. Here’s the most important thing about that first investment.

My first investment

In April 2011 I bought my first shares ever! I bought 1 share of GOOG, 8 shares of MSFT and 1 share of AMZN.

My ~$1,000 portfolio looked like

Stock # Cost Basis
ANZN 1 184
GOOG 1 576.99
MSFT 8 207.84
Total   968.83

This purchase was a big deal at the time. I worried about which stocks to buy. And worried what might happen to the price in the future. I worried if I had made the ‘right’ choice. Plus, I watched the prices change daily and worried about that too.

Putting it into perspective

Now let’s fast-forward about 70 months from April 2011 to January 2017. I’ve been investing monthly over the last five years and my portfolio has increased from $968 to $284,146.

On average I’ve saved about $3,700 a month but along the way I cashed out a pension plan I’d forgotten about and invested that for more savings.

So, my first investment purchase has been supplemented by around 70 additional monthly purchases. And that changes the picture from one coin to something like:

Putting your first investment into perspective some years later

My initial investment is about 0.5% of my portfolio now.

OK DL, so get to the point already. What’s the point here?

The most important thing about your first investment is…

Simply that you made the investment and took that step.

With a long enough investment horizon, it doesn’t really matter what you buy since it’ll be a tiny portion of your future portfolio. Within reason of course, since you shouldn’t just buy anything. But if you purchase shares in an index or some large-cap stable company, your first investment will be lost in the noise by the end of your investing career.

If you’re twenty now and investing for the next forty years, then that’s 480 monthly purchases. Each monthly purchase based on the quantity is about 0.2% of your cost basis. But you’d likely be increasing the size of the purchases over time due to higher income. If you invest twice a month, then there are 960 purchases ahead of you.

With some caveats, of course

If you’re investing a big lump sum as your first investment, then you do need to be more careful in your initial purchase as you’ll have to diversify from the outset. For this article though, I’m really just considering someone who’s starting to invest with regular monthly contributions over a long period.

First purchase post-mortem

Since I was here and I had dug up the details of my first purchase, I thought it’d be interesting to see what happened next.

Somewhere in an alternate universe…

Here’s how it would have looked today in an alternate universe where I still held all three stocks.

Stock # Cost Basis Value % Increase
AMZN 1 184 817.14 344 %
GOOG 1 576.99 807.88 40 %
MSFT 8 207.84 543.28 161 %
Total 968.83 $2,168.3 123 %

Microsoft have paid about $42 of dividends from those eight shares since I bought them. I added that to the market value above. The market value would really be a little higher still from re-invested dividends.

Still, the initial purchase more than doubled in value and increased to over $2k, about 0.76% of my portfolio.

What happened in reality…

Well, I sold some of those stocks along the way. I switched over to dividend paying stocks and sold GOOG and AMZN about a year later. I still own the MSFT shares.

The Value column in the table below is the sales price I received for AMZN and GOOG, plus the current market value of the eight MSFT shares.

Stock # Cost Basis Value % Increase
AMZN 1 184 192.06 4.3 %
GOOG 1 576.99 659.69 14.3 %
MSFT 8 207.84 543.28 161 %
Total 968.83 $1,395.03 43.4%

In hindsight, I should have stuck with the non-dividend paying Amazon (I sold it for $10 above purchase price), but I still did pretty well holding Microsoft. In selling, I lost out about $770 today.

It’s not a very accurate current value estimate however. I can’t know how much extra I have since earned from the proceeds of selling the two shares. But as a reference, $1,395 represents about 0.5% of my Income Fund today.

Anyway, the point is still that these percentages from that first investment are a small portion of my Income Fund after five years, and will be even smaller still in ten or even twenty years’ time.


If you’re starting out investing, what you buy isn’t such a critical decision, although it may seem so at the time. The biggest factor in your investing performance is how much money you’re able to invest and how much time you have, rather than a carefully picked initial purchase.

Don’t sweat the details as much in trying to find that ‘best’ purchase. Let the stocks (and time) do all the work so you don’t have to.

What was your first ever investment / purchase? A curious DL would like to know!

Quote of the Day

Start where you are. Use what you have. Do what you can.

15 thoughts on “The most important thing about your first investment”

  1. Ciao DL,
    I remember my first buys in Dec 2014, I guess that everyone pretty much behaves in the same way, checking stock prices every day, cringing at red numbers and rejoicing on the “great decisions” taken to buy a stock that maybe rises 3/4%… But that’s the emotional part of the story, as you correctly put it is the consistency in getting a financial investment plan that makes the difference, it’s not the spot action.
    Nice post, made me see that I have grown a little as an investor 😀
    ciao ciao

    1. Hi Stal,
      I’m glad it’s not just me who had that early reaction! Perhaps as you start investing, the long-term view isn’t so visible but as you continue to invest and the portfolio grows, the long-term view replaces the short-term.
      It’s always great to look back and see how you’ve grown as an investor and what you’ve learned!
      Thanks for stopping by!

  2. Great point. I’m currently reading “How to Get Rich” by Felix Dennis and he says, “Once begun – the job’s half done.” His point is just by getting off the couch and taking action, you are setting yourself up for more success.

    2 years ago, I put $750 into an account and tried my hand at day/swing trading. My targets were stocks under $10 and I did have some decent wins but also had 1 or 2 duds (I broke even at the end of the day. After a few months, I cashed out and then bought a house! Currently, just have a 401k and some company stock.

    Thanks for the post, always looking forward to your thoughts,


    1. Hey Erik,
      I haven’t heard of that book so I’m looking forward to reading your review.
      Getting out of day-trading was a good move. I think the only people getting consistently wealthy from day-trading are the brokers and experts who sell the trading “strategies”. And of course you usually only hear about the few people that “succeeded” (past-tense).
      Best wishes,

  3. Still made a profit which is nice. Overall, I agree with what you are saying. Invest now because history tells us that it is better for the long run. I am trying to invest heavily now (25) so I can retire by the time I am 55 and let me money do the work for me.

    1. Hi BHL,
      Yes time is certainly on your side, so it’s great that you’re making the most of it!
      Thanks for stopping by and commenting.
      Best wishes,

  4. My first purchase was Nvidia during their IPO in 1999. I was 17 at the time of the IPO. I sold the stock before it hit all time highs of 2xx. I reinvested the money in search engine technology company inktomi, which quickly lost essentially all of the money and 90 percent of the original investment. I’ve been a index investor ever since.

    1. Hi FullTimeFinance,
      That’s an expensive but educational lesson! Fortunately I missed out on the whole internet / tech bubble as I didn’t know how to invest and wasn’t even using a 401k (I wasn’t a permanent US resident back then).

      Indexing definitely makes sense and I’ve been scaling down my individual stock purchases. But a little irrational part of me still likes to buy a small amount of large-cap shares.

      Thanks for stopping by! I appreciate your comment 🙂

  5. Love the line that talks about how the most important thing is that you are kicking off your investments to begin with. It is always hard to take the plunge, begin your investing career, and start the journey. Then after that, the rest is typically history. The first dividend stock I purchased was PM, so I started my career off with a bang. And you know what, I haven’t looked back since. Im up 25% on the stock and I believe I purchased it in 2012. Not too shabby haha

    Thanks for the great read!

    1. Hi Bert,
      Buying and holding Philip Morris is definitely not shabby 🙂 Will be interesting seeing how the tobacco companies continue to adapt going forward, but they certainly have the resources to do so.
      Thanks for stopping by and commenting!
      Best wishes,

  6. Looking back my first stock was VTI which then I ended up selling as I was scraping everything for the first house down payment 🙂 Completely stopped and since 2008 was just index investing as had no time, just recently discovered the power of Dividend growth investing.

    1. Hi Dividends 4 Future,
      VTI is always good as a backstop; I favor funds over ETFs as I’m trying to save time on investing and purchases can be automated.
      Congrats on starting a blog and I’m looking forward to following along on your journey.
      Thank you for coming by and commenting.

  7. Very interesting reading, its nice to get some perspective. Im working my way through your entire blog and its been very helpful to me! I also like your tone and your way of explaining things. And your maths.
    Im happy it seems like you will reach your goals!
    / Dina

    1. Hi Dina,
      I’m glad you’re enjoying reading my blog. You’re always very welcome here and if you have any questions, just ask!
      Thank you for the kind words and support, and I wish you well on your own journey for financial independence.
      Best wishes,

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