Josh is 21 years old, living by himself near downtown Milwaukee. He has no dependents. He is in the last semester of the Nursing Associate Degree program, and plans to transfer to UWM next semester to pursue a Bachelor Degree in Nursing.
He has a car, on which he pays $240/month for two more years. He earns about $900/month, which is enough to get by, paying all rent, utilities, etc., himself.
He has about $4000 student debt, a few hundred dollars in credit card debt, and about $1000 in a bank savings account.
He is interested in investing, and individual stocks fascinate him. He knows people who have made a lot of money in the stock market, or so they tell him. He's been watching the stock market and thinks that it is time for him to jump in.
You are his financial advisor. What do you tell him? Use the material in this and previous chapters to guide your answer. By now, hopefully you are able to discuss his overall financial picture, including budget, debt, etc.
Note: Please do not recommend "Penny Stocks." In past semesters, a few (poorly-informed and naïve) students have suggested them because of their low prices.
First, penny stocks are almost always a bad investment. That's why they are so cheap!