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At the age of 14 Damon Williams has built an investment portfolio worth over $50,000. While most kids were focused, on earning money to buy goods, Damon’s mother taught him to study and invest in goods to make money. Damon with the help of his mother purchased his first stock at the tender age of 5 years old. With a love for Nike Shoes, Damon’s mother required that he save up enough birthday and Christmas money to buy a share of Nike stock. Overtime Damon has accumulated over 50 shares of Nike stock, as well as stock in Coach and other companies. So what made Damon’s portfolio such a success? Let’s take a look at some of simple things you can learn from Damon’s story that could help you in your investments endeavors.

Know the Terminology

Price/Earnings (P/E) Ratio, Earnings Per Share (EPS), Dividend Yields, and Compound Annual Growth Rate (CAGR) are essential must-know terms for the first time investor. Sites like Investopedia.com, and Wikipedia.com are great resources for understanding investment lingo.

Invest in What you Know

Famous investor Peter Lynch coined some of the best know mantras of modern individual investing strategies, his most famous, “Invest in what you know” is one of the simplest and most fundamental principles of investing. Damon started his investment account purchasing his passion, Nike. Damon’s loved for shoes turned into impressive stock portfolio, much like how Peter Lynch, , one of the most successful money managers in history, got some of his best investing ideas from listening to his wife and kids after they came back from running errands. In fact, Lynch bought stock in Hanes after his wife brought home the newly-introduced L’eggs she discovered while in the checkout line at the grocery store; the investment made millions.

Do your Homework

Publicly traded companies are required to submit their financial statements including: income statements, balance sheets, and cash flow statements, for public view. Researching a stocks’ financial health, as well as where they rank financially  amongst their competitors is essential for identifying a good investment. You can use sites like Google Finance and Yahoo Finance to research potential investments. Also check out Amazon.com for beginning investment guides. Read the user reviews to identify the right guide for you. A few of my favorite titles include: 7 Rules of Becoming Rich, Finding Investment Ideas, and The Warren Buffet Way.

Think Long-Term

When researching stocks it is best to chose a company with the long term in mind. Find a company with a successful track record spanning over multiple years, buy and hold. Don’t be what Damon called a “fickle” investor. It’s also good to find a company that, has a competitive advantage, in market that is growing and stable.

Remember equity investments arent for everyone, so if you don’t want and/or have time to dabble in the equities market, contact a  financial professional to create a investment plan that’s right for you.