Buying Your First Stock: Here's How

Ready? Set? invest! Just kidding.

Although buying your first stock is not that complicated, the process can be fraught with anxiety, especially if you've never done it before. How do you know if you're ready? Which broker should you use? What companies should you buy? When? How much?

Rest easy, grasshopper. This episode of Motley Fool Answers (available for free on iTunes and Stitcher) will guide you down the road to becoming a bona fide investor. For even more step-by-step guidance, check out our brand new Guide to Investing for Beginners.

Transcript:

ALISON SOUTHWICK:

This is Motley Fool Answers. I'm Alison Southwick and I'm joined, as always, by Dayana Yochim and Robert Brokamp.

So we receive a lot of mail about how to buy your first stock. It can seem intimidating, but we're here to walk you through it, step by step, and by the end of the show, young grasshopper, you'll know if you're financially ready to invest. You'll also know how to choose a broker and even what to look for in a stock. Think of us like your own investing Mr. Miyagi, and we aren't even going to make you wax our car.

Before we get started, let me say that The Motley Fool's "13 Steps to Investing Foolishly" is a great resource for helping you get started investing. That, in addition to what we're going to talk about today, is going to get you off on the right foot, right?

DAYANA YOCHIM:

Right.

ROBERT BROKAMP:

Yes, exactly.

ALISON SOUTHWICK:

So before you can buy your first stock, you have to ask yourself if you're even ready financially to invest. So, Dayana, what's the checklist that people need to go through before they buy their first stock?

DAYANA YOCHIM:

It's a pretty simple checklist. You want to have no high-interest debt -- credit card debt -- because you're not going to out-invest that interest rate. When you pay off your credit card debt, it's a guaranteed return of whatever you have been paying in interest -- 14%, 9%, whatever it is. Get rid of that. Have a clean slate.

Another thing is that you want to have an emergency fund in place, or at least have started that emergency fund.

ALISON SOUTHWICK:

How much is an emergency fund? What is an emergency fund?

ROBERT BROKAMP:

The classic advice is three to six months of -- and I say required -- absolute-pay expenses. So you're talking about your mortgage, your rent, food, clothes.

DAYANA YOCHIM:

Your living expenses.

ROBERT BROKAMP:

Yeah. The things you have to pay in case you lose a job. You'll often use it, also, if your car breaks down or something like that. If you have kids and a mortgage, it should be closer to that six months. If you don't have kids and you're just paying rent -- and you're only worried about losing your job or maybe the car breaking down -- a smaller amount is fine.

ALISON SOUTHWICK:

And that gets us to a question from Jilian C. She wants to know, "Once I have this emergency fund, where can I put the money? What do I do with that money?" Does it just sit in a pile under your mattress? Where does it go?

DAYANA YOCHIM:

A mattress isn't a great idea, but unfortunately you're not going to find a super exciting place to put your money. You're not going to get a huge return, given what bank accounts pay these days.

ALISON SOUTHWICK:

So basically you leave it in a bank account.

DAYANA YOCHIM:

Yeah, you need access to it. That's the whole point. You don't want it tied up in something that you're going to have to pay a penalty to get access to. So a CD -- while you'll possibly earn more interest on it -- if you need to cash that out to pay to replace the transmission on your car, you're going to pay a penalty to access that CD, usually giving up some of the interest that you've earned.

ROBERT BROKAMP:

An emergency fund is about insurance, and with insurance you're not looking for a return. You're looking for safety.

DAYANA YOCHIM:

And then the other thing, before you start investing, is also if you've got a 401(k), you want to make sure you're maxing that out at least to the point where you're getting the match, because there are a lot of tax advantages to that.

So there's your checklist.

ALISON SOUTHWICK:

So no credit card debt, have an emergency fund of at least three to six months, and max out your 401(k) match.

DAYANA YOCHIM:

Boom!

ALISON SOUTHWICK:

Boom! Next step. Open up a brokerage account.

So Robert, take me into the way-back machine to the days of how people used to buy stocks before the Internet.

ROBERT BROKAMP:

Right. I used to be a financial advisor, and I got into that career right as the Internet was transforming the industry. It used to be you had to call your broker and say, "I want to buy this stock." And you also didn't have your computer to look up the quotes, so you'd call and say, "What's Coke trading at today? OK, I will buy or sell these number of shares." You paid a commission, and it was a percentage of the transaction. It could be over a hundred dollars -- maybe hundreds of dollars ...

ALISON SOUTHWICK:

Really!

ROBERT BROKAMP:

... so when you think about now being able to pull up your computer, click a button, pay 7 or 8 or 15 dollars to do that trade, it's quite something.

ALISON SOUTHWICK:

Right. Because we had a couple of questions from Jen and also Brian B. Jen wanted to know if there is an online trading firm that you like best for me to open accounts. And Brian pretty much had the same question. Is there a recommendation on where to purchase investments, such as ones that are user friendly or light on fees?

So what should you consider when you're looking to choose a broker? Because there's a lot of options out there, right? Like we can probably do a drinking game where we have to each go around the circle and name one, and we could probably go quite a few rounds.

ROBERT BROKAMP:

And that will be the next podcast. Everyone make sure you tune in. We're listening to Queen. Thump, thump, clap.

DAYANA YOCHIM:

[Laughs]

ALISON SOUTHWICK:

All right. ShareBuilder.

ROBERT BROKAMP:

Thump, thump, clap.

ALISON SOUTHWICK:

E*Trade.

ROBERT BROKAMP:

Thump, thump, clap.

ROBERT BROKAMP:

Thump, thump, clap. So that is "We Will Rock You."

DAYANA YOCHIM:

Thank you, Robert.

ALISON SOUTHWICK:

Drink, drink, drink, drink, drink! Schwab ...

ALISON SOUTHWICK:

Yes, so there are a ton of options of online brokers. How do you pick one?

ROBERT BROKAMP:

You start with what you want to invest in. So we're talking about individual stocks. People often look at price on that. It can be 6 to 7 dollars, or 15 to 20 dollars to make that trade. You want to do a lower price, of course. Ideally you're not day trading, so it won't make that big of a deal.

Then you think of what else you will be investing in, in this account. All of these accounts also offer hundreds to thousands of mutual funds. Sometimes you can buy those for free. Sometimes not. And it can vary from broker to broker.

So if you are going into this and you're thinking, "I really love this family of mutual funds," check to see if they're available from a certain broker and then how much you're going to have to pay to get that fund.

Beyond that, it really comes down to all kinds of different services, so they might offer online banking. They might offer mobile trading. They might offer free research. Those are sort of lower down on the list. If you want to speak to an actual human being, many of these discount brokers actually have offices, usually in the bigger cities. But if you live in a bigger city, and you want to actually speak to a human being, see which offices are in your area and then you can go there and talk to them about the account.

DAYANA YOCHIM:

And another one is minimum requirement to open an account. For mutual funds often you'll see $500, $1,000 or $2,000 minimums to invest.

ROBERT BROKAMP:

And some accounts, you have to have $2,500 just to open the account -- and others you need nothing. So that will definitely be one of the criteria.

DAYANA YOCHIM:

Again, here today we're talking about individual stocks. And to help you we have a broker center where you can compare all of the major discount brokers side by side.

ALISON SOUTHWICK:

Broker.fool.com.

DAYANA YOCHIM:

And there you'll see what services they offer. Are there any specials? You can look side by side to pick the account that's going to work best for you.

ALISON SOUTHWICK:

It's probably helpful to point out to our new investors out there that if you do open up an account and then you're like, "You know what? I don't really like these guys," it's not like it's super hard to open up a brokerage account. And also, you can have more than one brokerage account. Like, don't have them all over town ... don't feel like you're marrying this broker.

DAYANA YOCHIM:

Just dating around.

ALISON SOUTHWICK:

So go for it. All right. So, yeah. Go to our broker center -- broker.fool.com -- and you can compare any number of different brokers. Now let's move on to talk about what you should actually buy.

DAYANA YOCHIM:

The fun stuff.

ALISON SOUTHWICK:

What should you look for? Because it's time to go shopping!

What should you look for in that first stock you should buy? And we have a couple of questions that came in. One from Debbie B. She wanted to know what we thought about a specific company, and she was a first-stock investor. And then Nicole J. also wanted to know, "How do I know what's a great business to invest in?" So, yeah.

DAYANA YOCHIM:

It's great. I just had this conversation with a friend of mine, Alissa, who has been listening to our podcast. Oh, hey, Alissa!

ALISON SOUTHWICK:

Hey, Alissa!

DAYANA YOCHIM:

She was inspired. She opened her discount brokerage account. She opened a ShareBuilder account. She put $500 in there. She created a watchlist of stocks, which is great, just to give you a placeholder -- a baseline to start out with companies you're interested in buying.

So on her watchlist was Apple and [Amazon.com]. Those are two companies that she knows. There's also [Tesla Motors]. She's got a bit excited about it, because it's cool. And Macy's. Her company was actually just acquired by Macy's. And then she mentioned Hal-bert-on ...

ALISON SOUTHWICK:

Halliburton! Why can't you say Halliburton?

DAYANA YOCHIM:

"Halliburton." [Laughs]

ROBERT BROKAMP:

Hally-burton.

DAYANA YOCHIM:

Anyhow ... the reason that was on there was that she thought it was a company that Warren Buffett owned, but he does not. And then she had a couple of blue chips on her list: [General Electric], [Johnson & Johnson].

ALISON SOUTHWICK:

And what is a blue chip?

DAYANA YOCHIM:

A very large company. Usually people refer to them as the "stalwarts" of the stock market.

ROBERT BROKAMP:

Right. So you're talking about [Coca-Cola], McDonald's, Wal-Mart, those types. They're often not actually all that safe, but nonetheless, that's why they call them blue chips. I guess because of poker, right? The most valuable chip? Yeah, they're you go.

DAYANA YOCHIM:

So this led to a great discussion. I asked, "Well, what do you know about the defense industry, exactly?" "Nothing." Well, maybe Halliburton is not where your first investing dollars should go.

For GE and Johnson & Johnson, I understood that she felt like she needed some diversification. Some stability. I knew that in her IRA she owned index funds, and I said, "You know, you actually already own shares of those companies, and you're well diversified within that."

The point, here, of buying individual stocks is to bet on companies you think are going to outperform the index so that you can get more exposure to those.

And then for Macy's, I said, "OK, that's nice. You've already got some exposure to them because you're working for them, now." On the flip side, working for them also gives her insights into that business that other investors might not necessarily know about. But again, perhaps that's not where your first dollars should go.

ALISON SOUTHWICK:

Right, because if Macy's goes south, then ...

DAYANA YOCHIM:

Her paycheck, her bonuses ...

ROBERT BROKAMP:

You're mixing your human capital with your investment capital, and you don't want to be too concentrated -- to put it in financial-planner terms.

DAYANA YOCHIM:

Well, there you go, then.

DAYANA YOCHIM:

So these are the kinds of questions that you consider when you're making your watchlist of companies: What are you going to be excited about buying? What are some industries that you want to bet on that you think are going to do well over the long term? You're a customer of them. You understand how they work.

ROBERT BROKAMP:

I often compare investing to sports. A lot of people wake up, and every morning the first thing they look at is what's going on with their favorite team. We don't recommend that you wake up every morning and look at your investments every day. But is it something you're excited to learn about? If a new earnings report comes out about that company, you're like, "Yeah. I want to know how they're doing."

ALISON SOUTHWICK:

Right. So the first stocks that I bought were a big learning experience. I bought Corning, because they put glass on the front of Apple iPhones, so I thought, "Well, Apple iPhones are huge -- Corning!" And it's an old name that I know. They're not going anywhere. I bought a cloud-computing company called Rackspace.

ROBERT BROKAMP:

[Snorts]

ALISON SOUTHWICK:

I bought [Lululemon Athletica] and I bought -- what was the fourth one -- [MAKO Surgical], which was health care.

And so MAKO is -- oh, my gosh -- awful. Like, it's pfffffftttt! 

And then Rackspace. Boy, they went through some rough times, and they're not beating the market. Lululemon's not beating the market. But I knew Lululemon, and yoga, and clothing. And Corning -- when I bought Corning, I was telling people, "Hey, I just bought one of my first stocks. I bought Corning." All these people were like, "Oh. I don't know about Corning. Ooh." But it's been my best stock!

ROBERT BROKAMP:

Why did they say that? Because they didn't like the company?

ALISON SOUTHWICK:

At the time they didn't think Apple was going to keep buying glass from Corning, but Apple did keep buying glass from Corning, and Corning has continued to do pretty well.

DAYANA YOCHIM:

And what percentage of their business is providing glass to Apple?

ALISON SOUTHWICK:

I don't know! See? And so some of the big mistakes I made with my first stocks was I didn't understand healthcare stuff. I didn't understand cloud computing. I understood yoga apparel and Lululemon had its own problems, so whatever. I'm not going to beat myself over that one.

So three out of the four stocks I bought, I didn't understand anything about them. And I've left out some. Some did well and some didn't. But since buying those first stocks, I have learned so much more about what I am interested in.

For example, the last stock I bought was [TJX], because I spend a lot of money at T.J.Maxx. And it's done really well, which is great, and it's so satisfying to invest in something that you believe in, and that you like. And when I go check out at T.J.Maxx, I'm like, "So how's business been lately?"

DAYANA YOCHIM:

[Laughs]

ROBERT BROKAMP:

[Laughs]

ALISON SOUTHWICK:

"How was the holiday shopping?"

DAYANA YOCHIM:

"And by the way, I own you."

ALISON SOUTHWICK:

Yes. I just pick up something off their counter -- a stapler -- and be like, "I own this! I'm going to let you look after it."

ROBERT BROKAMP:

They see you coming, and they go, "Here comes the boss. Start working hard."

ALISON SOUTHWICK:

"Here comes the boss." No, but my mindset is so much different. So with those first stocks, I was like, "I've got to buy high tech. I've got to buy healthcare. I've got to get all this sexy stuff."

But I had no business buying it, and so my main point of my story of my first stocks is to buy what you know. Buy what you're excited about. Buy what you can understand. And then if you find that you really enjoy investing and learning about those companies, then learn about other companies and expand it. But, luckily, I didn't get too hurt.

ROBERT BROKAMP:

One thing I also like about the whole "buy what you know or buy what you use" is that you can go into the companies, like T.J.Maxx, and sort of think through, "All right, how are they doing? How are they making money?" You read the earnings report, for example, and you might learn that it's jewelry that's the highest-margin product at a store. So you go in there. You're like, "OK, people hanging around the jewelry department." Look in there. "OK, I can see why people like this." Or, "Something's changed here. I don't like what they're offering."

DAYANA YOCHIM:

Or you might notice that a lot of stuff is on clearance, for instance. Like they're constantly having sales and sending more and more coupons for things.

ROBERT BROKAMP:

Right.

DAYANA YOCHIM:

So buy what you know and where you can visit.

ROBERT BROKAMP:

And then, actually, how you would bring that to the stock analysis -- when you learn how to read balance sheets, and stuff like that. You start seeing maybe their inventory is rising because they're not selling enough. Then you learn those things, more and more, and that's a hint like, "OK. Something's going on here. Maybe it's time to pare back on it or not buy as much." You learn not only about stocks, but businesses.

There's one thing I think everyone who's working -- everyone who works for a business; even if it's the government, you're working for a business -- something that has to make some sort of a profit. And you get a sense of your own company. Like, "OK. How are things looking here? Is it a good time to ask for a raise or not?"

Is it a good time to make a lateral move? Try to move up? Consider other job opportunities? So I think there are a lot of applications to life beyond growing your portfolio.

DAYANA YOCHIM:

The whole lesson here is it is a business. You're not buying a ticker symbol.

You are buying part of a business. The more you know about that business and that industry, the more interested you're going to be in learning even more. You'll see what the other players are doing, and the threats and the opportunities that are available to the company you've invested in.

ROBERT BROKAMP:

That's also one of the downsides of the whole "buy what you know," because if you know it, probably a lot of other people do. A popular company could lead to a popular stock, which could be an overvalued stock.

One thing that you did very well, Alison, was that you bought more than one. Not doing so can be a big mistake. We often say at The Motley Fool, "Just buy one stock. Just get in the game." But if it does really badly, then you're going to feel like, "I don't want to do this anymore. Investing in the stock market is a bad idea."

So you bought a few and you learned a lot. I also think it's a good lesson in terms of how much of your net worth you put into your first few stocks. It should not be a significant portion. You just keep most of it, still, in index funds and mutual funds until you've learned how to invest in individual stocks and are comfortable with the risks there.

DAYANA YOCHIM:

With Alissa, I happen to know what she was investing in elsewhere, so we could have a better conversation about what she should invest in outside of that index fund. But this is the thing. When you ask people on the street, "Hey, what stock should I buy?" remember, they don't know your financial situation. They don't know what your portfolio looks like. So keep that in mind.

ALISON SOUTHWICK:

And do we know what she ended up buying?

DAYANA YOCHIM:

Yes. She texted me. She was super excited. She bought Apple, Tesla, and Amazon.

ALISON SOUTHWICK:

Oh, cool.

ALISON SOUTHWICK:

So March Madness happened a few weeks ago, and I was reminded of your point on getting hot stock tips. I was building my bracket, and I was reading articles. And when you read these articles, the guys writing this will be like, "There's no way this team's going to advance to this round, and UCLA doesn't belong in the tournament." And they just say it with such conviction and authority.

And it's very easy in investing, as well, to come across these articles where there's like, "There's no way Apple's going any higher." They make it sound like it's a fact. And so I just wanted to mention to people that as they read about investing, often the people who are on CNBC, or writing articles, or whatever may sound like they're very authoritative, but with investing, there's no guarantees.

DAYANA YOCHIM:

No.

ALISON SOUTHWICK:

There's absolutely no guarantees. And something about a company can completely change the next day.

DAYANA YOCHIM:

One of our favorite things to do here, around the Fool, is to go back in time and look at all the very strong market calls that were made. "This is never going higher." And you just missed out on a 100-bagger in Netflix because you thought, "It's all over."

ROBERT BROKAMP:

I was going to say that when people were telling you about Corning, because sometimes the best investments are the most hated stocks, because everyone's already sold them. No one wants to buy them. They're toward the bottom. And eventually you buy them and then other people catch on.

DAYANA YOCHIM:

Oh, you trendsetter.

ALISON SOUTHWICK:

Me?

ROBERT BROKAMP:

You are.

ALISON SOUTHWICK:

Well, if only I could trend-set with Lululemon.

So once you've bought your first stock, or maybe stocks, Daniel A. wrote in and said, "I feel like everyone I talk to about the stock market -- either they're really afraid or check their stocks an average of five times an hour for the duration of their workday."

DAYANA YOCHIM:

Can you imagine back in the day you'd call your guy five times an hour?

ROBERT BROKAMP:

I'm telling you. When I was a broker, there were those people. They would call at least twice a day, and you knew which stocks they were going to ask about, so you'd just do, dit dit dit dit dit dit dit dit dit. [That's the sound of a push-button phone being dialed.]

ALISON SOUTHWICK:

And hang up. So Daniel would prefer to do none of these things -- checking his stocks all day or being afraid. So what is the best course of action after you have purchased your first stock or stocks?

DAYANA YOCHIM:

When I texted Alissa, I said, "You know, when you check your stocks tomorrow they may be down. Don't worry about it. If they're really down, then great. Shop stocks on sale if you really believe in these companies."

But this is an issue with first-time investors. It's when do I buy, when do I pull the trigger, and how do I avoid doing something stupid?

One thing you could do to not be that guy that's checking stocks all the time, and driving yourself nuts and getting ulcers, is do something called dollar-cost averaging, or buying in thirds. This is a strategy where you don't have to pull the trigger just one time. You pull the trigger multiple times.

For Alissa, for instance, if she bought your first shares yesterday she can mark a point on her calendar next month and buy more shares of the same company, and again for the following month the same amount of money. So it's not like, "I bought at the exact high of this stock," or "I've caught the low."

Your cost basis -- the price you've ended up paying -- averages out, because you've pulled the trigger multiple times. That's one way to deal with that question of "When is the exact right time to buy?" Just having that plan in place is really important.

ALISON SOUTHWICK:

Yes, and we obviously don't advise checking your stock every day, because we also believe in holding on to a company for a very long time.

ROBERT BROKAMP:

At least five years, ideally. Hopefully longer. I recommend that people check out their companies quarterly. Every company has an earnings report every quarter. You'll see how they're doing. Management might make some comment about how business is going. I think that's about as much as you need.

You always hear about how studies show that people who check their stocks more often actually underperform or don't do as well, because they trade more. I have to say it's one of those things I always hear. I should really confirm and see if that's true, but it doesn't surprise me.

And I think for some people it's like the equivalent of Facebook. They just check it, check it, and check it, and in the end it's kind of a waste of time.

DAYANA YOCHIM:

Another issue that all investors have is the feeling that, "I have to pick the one company, here, that's going to be the winner." And that puts a lot of pressure on yourself as an investor to pick what's going to be the hot company in the sector.

And you don't have to. You can do something that Warren Buffett talks about, which is buying a basket. Say there are multiple companies operating in a space -- so Target, Wal-Mart, and other discounters. Buy shares in all of them so you have the exposure to that and therefore you're not missing out when the one takes off. You can start doubling down on your position as that starts to happen.

ROBERT BROKAMP:

And that's particularly the point if you're buying into a new industry.

You look at the history of any industry, and you'll see a whole bunch of new companies. Look at the history of the automobile industry. There used to be tons of companies. Some fail; some get bought out by the winners. But if you own many of them, you've increased your chances that you'll own the winner and the gains from the winner will make up for the losses in the others.

And you should also recognize everyone has big losses, from Warren Buffett on down. Every investor has picked some stocks that did not do well. It's not just you specifically. You are going to buy stocks that are not going to do well. It's just part of the game.

ALISON SOUTHWICK:

Peter Lynch, one of the world's most famous investors, said that to be successful in investing, you just have to be right six or seven out of 10 times.

ROBERT BROKAMP:

Right.

ALISON SOUTHWICK:

And, yes, to your point about when to sell, sometimes people recommend that when you buy a stock, you write down on a piece of paper when you would sell that stock. So in my case, I would have sold Lululemon once I felt like their designs were not as attractive or interesting to me, but I didn't because I didn't write that down on a little Post-it. Do you guys recommend doing that, or do you feel it's a more complex decision?

DAYANA YOCHIM:

I think you should definitely keep a diary of why you bought the company ...

ALISON SOUTHWICK:

Dear diary ...

DAYANA YOCHIM:

Dear diary ...

ROBERT BROKAMP:

Dear diary, I have a crush on Halliburton.

DAYANA YOCHIM:

[Laughs]

ALISON SOUTHWICK:

I don't get him at all, but he is just so powerful and dreamy.

DAYANA YOCHIM:

But having a record of your thinking at the time means you're not going to be able to fudge it. It's a really nice way to keep yourself honest and also to take a bit of the emotion out of investing so you have your reasons: "Here's why I bought it. Here's what I expect to happen with this company, be it a new product or something about management maybe happening, and then also here are the things that would make me reconsider my investment position."

Then review that record occasionally, especially when you're feeling the itchy trigger finger.

ALISON SOUTHWICK:

Right. When the stock drops, that will influence whether you buy more or if your thesis holds.

ROBERT BROKAMP:

Coincidentally, we just had a meeting of the investing group, which is all the analysts at The Motley Fool, and the same question came up. Everyone writes down their thesis. I think a lot of people have done that. They have to, because they're writing articles about it. How do you monitor that? How do you stay on track of that? It's a problem or something even experienced investors struggle with, but they also recognize it's important.

ALISON SOUTHWICK:

So what we've been talking about here is really Investing 101, and we could do a 201 and a 301. I mean, we could do a whole graduate course on how to invest and how to research stocks. So this is really just the first step for you guys at home to buy that first stock.

So before we change topics here, what is your No. 1 best piece of advice for someone who's about to buy their first stock?

DAYANA YOCHIM:

Buy your stock and then go on vacation.

ROBERT BROKAMP:

[Laughs]

DAYANA YOCHIM:

Preferably to Italy.

ALISON SOUTHWICK:

Dayana's about to go on vacation to Italy, by the way.

ROBERT BROKAMP:

I've talked about this in previous podcasts, but I do like buying consumer companies that I bring my kids to so that we can have the discussion. So we have Starbucks. We have Home Depot. We can go and walk around. Like, "OK, what do you think? How do you think they're doing? How do you think they're making money?"

Because it really is a business education as well, so I would say start there, but again, start small. My first investment in Home Depot, back in 1997, was $500. That's all I needed to do. I still own those shares -- and I've bought more -- but that's all I needed to do to get in the game.

ALISON SOUTHWICK:

I think it's important. You learn so much just when you buy that first stock. So just buying that first stock is such an education.

**********

So we've gotten a lot of listener emails and comments, and it's awesome. We love you guys, and I wanted to call some out.

The first one I wanted to call out is Rick P. over in NYC. He was so psyched to hear us talk about The Villages in Florida because his in-laws have lived there for 10 years and they've visited a dozen times. So he gave us a little bit of an inside scoop. He let us know that there used to be a drive-in movie theater, but they had to close it because residents were having loofah time in their golf carts.

ROBERT BROKAMP:

Do we need to remind people what we're talking about here? That The Villages is a retirement community that, uh, yeah, has golf carts, and if you want to indicate that you're interested in open relationships, you put a loofah on the antenna of your golf cart.

ALISON SOUTHWICK:

Rumor has it.

ROBERT BROKAMP:

Rumor has it. And I'm going to confirm it. I'm going to be there in a week -- not for loofah-related activities. Just because my dad lives close by.

ALISON SOUTHWICK:

How are you planning on confirming? Are you just asking? Or are you going to drive around with a loofah and see what happens?

ROBERT BROKAMP:

As I said before, The Villages is awesome. They've got great stores and great restaurants, so we'll probably go there and just keep an eye out for things. Maybe snap a few photos, if you know what I'm saying.

ALISON SOUTHWICK:

So Rick wanted to let us know that the real secret of The Villages is the family that owns it -- the Morse family. If you look at a Village-produced map, the center of The Villages is a dark-shaded area populated only by the logo, and that's where the Morses live.

ROBERT BROKAMP:

And at night, all you hear are screams. Screams!

DAYANA YOCHIM:

[Laughs]

ROBERT BROKAMP:

He didn't say that, but it's probably ... I don't know. Anyway, they own the whole property and very little is known about them.

DAYANA YOCHIM:

Well, I think that just might be your point of interest when you visit.

ALISON SOUTHWICK:

Yeah, somebody's going to be heading to the heart of darkness under The Villages logo on the map.

DAYANA YOCHIM:

Wear your Kevlar.

ROBERT BROKAMP:

OK. [Laughs]

ALISON SOUTHWICK:

Can't wait to hear how it goes. We also received another email from Troy C. regarding budgets. He wanted to let us know that he uses an app called Toshl Finance. I hadn't heard of it either, but when I looked it up online, it's got good reviews and he says that they use it to track their budget daily. They roll over the averages and credits to the next day. The whole family can use it so they can see, in real time, and deduct from what they feel they have left. So he feels like it is like having a wad of cash in his pocket. I'm paraphrasing. Sorry, Troy.

Anyway, he said household members are able to input their expenses on their phone, and it syncs with the account and the budget. He said he's tested a dozen apps and this is what fit their needs best. So cool. Thanks for the tip. That's a recommendation.

ROBERT BROKAMP:

And that's the great thing about having something on your phone when you're married and you have kids and stuff like that. Everyone can record everything right then and there in real time.

ALISON SOUTHWICK:

Alan E. wants to know why he's not getting invited to our office or holiday parties.

[Uncomfortably long silence]

ROBERT BROKAMP:

Um ... [Laughs] I didn't know we had parties. I wasn't getting invited either, I guess.

DAYANA YOCHIM:

You know what? I have a plus one. Next party, you're in.

ALISON SOUTHWICK:

Careful. I think he's going to take you up on that.

ALISON SOUTHWICK:

All right, we also get great reviews from you guys on iTunes, which we really appreciate, so I wanted to read some of these, because they're funny to me. [Kiminig] says that we are really helpful and have smart money tips. He or she says, "I love what you guys do. It's like having a pal who is really smart," and smart is in air quotes, "but also polite, funny, and also doesn't judge."

DAYANA YOCHIM:

Aw!

ALISON SOUTHWICK:

It's not true. We judge very harshly.

ROBERT BROKAMP:

We're judging you all right now, actually.

DAYANA YOCHIM:

I'm secretly judging Alison's clogs right now.

ALISON SOUTHWICK:

I'm not wearing clogs! I'm wearing slippers today!

ROBERT BROKAMP:

Ew!

ALISON SOUTHWICK:

What's wrong with slippers? I work at The Motley Fool. I'm going to wear slippers!

All right. We also have another one ...

PinkDragon and a bunch of numbers on iTunes also said it's the most entertaining investing podcast. Thank you. "I listen in my car in the morning, and it wakes me up. These girls and that one guy are very funny. This is by far the best investing podcast for beginners. My only knock is it's too short."

ROBERT BROKAMP:

Aw! So we're going to make this one two hours, so sit back and relax, everybody.

DAYANA YOCHIM:

Oh, it's a possibility this one is two hours long.

ALISON SOUTHWICK:

It is possible. We've been talking. But from one of the girls, thank you very much.

DAYANA YOCHIM:

Thank you.

ROBERT BROKAMP:

And thank you from the other girl.

ALISON SOUTHWICK:

Thanks, everyone, for your letters, and kind words, and thoughts. We really appreciate it when you guys leave reviews and ratings for us on iTunes. It helps our ratings, and it helps attract more people to the podcast. So thanks, you guys. You're great.

ROBERT BROKAMP:

We love you.

DAYANA YOCHIM:

We do.

ROBERT BROKAMP:

And we judge you.

ALISON SOUTHWICK:

Well ...

DAYANA YOCHIM:

Some of us more harshly than others.

ALISON SOUTHWICK:

Well, how can you truly love something without being a little skeptical and judgy?

All right. That's going to do it for today. I do want to mention that any stocks mentioned today are not recommendations to buy, so don't buy and sell stocks solely on what you hear on this show. Believe me -- don't buy some of the stocks I bought.

Today's show is edited by Rick Engdahl. It's taped by Dan Boyd. Thanks, Dan Boyd. Theme music written and performed by Dayana. Our email is [email protected]. Please, please, please. If you have a moment, rate us on iTunes and Stitcher.

For the other girl and that guy, I'm Alison Southwick. Fool on!