"For Those Of You Who Want To Be Your Own Rich Man, Listen Up": This Comedian Just Perfectly Explained How The Stock Market Works
The stock market can be a really intimidating topic, especially when you're just starting to learn about it. There's so much finance jargon to decode, various investing strategies to explore, and, scariest of all, the fear of messing it all up. But recently, a TikTok video from New York-based comedian Nikita Redkar has been giving people a crash course in the basics of how the stock market works.
In the video, which has been watched over a million times on TikTok, Nikita says, "The stock market is like a less-fun mall that gives you money the longer you stay in it. Anxious attachment style much?"
"The stock market has sectors, like different shops in a mall such as technology, pharmaceutical, energy, etc. Within those sectors are companies. So for example, if technology was Claire's, then Google would be headbands, Amazon would be mood rings, Facebook would be belly rings that infect in two days, and so on."
"Each company sells shares, and each share costs a specific amount. So when a company makes money, the value of its shares goes up."
"Let's say you buy a share from a company called, I don't know, Big Boobs, for $1. Big Boobs has a really strong year and makes a lot of money and now everyone is like, 'I want Big Boobs.' So then Big Boobs raises its share price to $2 since demand is high. Since you bought it at $1, you can sell it for $2 on the stock market, and now you've made money. Or you can hold on to it just in case Big Boobs does even better and raises its share price to $3 or $10 or $100. Now you're rich. Be the finance bro you wish to see in the world!"
And in the comments, people are loving the easy and relatable way that Nikita broke this tricky subject down. So many comments were like, "Wow, I finally get it now."
Nikita told BuzzFeed that she loves making these kinds of explainer-style videos. "I'd like to think that if I can distill the essence of the stock market and make it understandable to my tipsy friends at a crowded brunch restaurant, then I'll have done my job. And a simple explanation is often all people need! The internet has made everyone feel like they need to be an expert before being a beginner at something, and that is so intimidating."
"My videos are always inspired by 2000s teen magazines in that I use shopping, dating, friends, crushes, and gossip to explain subjects. That's what I read growing up, so that is the filter through which I make sense of the world."
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And since there are so many comments asking her to please cover more financial topics, Nikita told BuzzFeed she's definitely considering it. "Why not? I usually have a baseline knowledge of subjects in my videos, but my followers requesting more information on a certain topic inspires me to read up more on it."
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I was curious what a finance expert would have to say about Nikita's explainer, so I reached out to Priya Malani, founder and CEO of the financial planning firm Stash Wealth, to get her thoughts.
First of all, Priya says yes, Nikita's stock market explainer is a great intro to how investing works! And she says that the stock market doesn't have to be as intimidating as it so often seems. "Wall Street tries to make investing seem so complicated with the need for things like hedge fund managers and day trading, but most young professionals are MUCH better off with a simple investing strategy that falls in line with their goals."
Priya also cautions against trying to pick winners in the stock market. "One thing you should keep in mind: Don’t try to pick the next hot stock and then time when you think you should sell. That’s gambling — not investing. Even if Big Boobs is rumored to keep getting bigger."
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"Our suggestion? Invest in something like the food court. AKA, ETFs. You get to put your money into a group of stores (think: Panda Express, Auntie Anne’s, Sbarro, and Cinnabon) without picking one fast-casual restaurant that you think will do better than the others. This way, even if Auntie Anne’s has a PR nightmare at the same time Sbarro goes viral on TikTok, you are still earning money because you are 'diversified'."
And now I NEED a sweet pretzel from the mall...
Priya also has some advice for people who, after watching Nikita's video, are feeling like they might be ready to try investing for themselves. "The first thing we always tell our clients is to decide what your goals are. You shouldn’t try to pick what to invest IN before you know what you’re investing FOR."
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She says she often recommends using robo-advisors like Betterment to clients who are clear on their goals and want to get started. She says apps like these are "a good place to start to help you get a better idea of basic terminology and how to get started right there on your phone."
