When My Sugar Daddy Showed Me the Basics of Stock Market Analysis

When I told my friends that I was going to become a sugar baby, they figured I was in it for the gifts and the private jets. And sure, those things are all amazing. But the real benefit of dating a sugar daddy? Is when he teaches you about the stock market.

Mind you, I went into sugaring with the mindset that I wanted to meet older guys who could help me build my own resources. And I wasn’t sure exactly what that would mean at first. I dated a guy who was really into real estate investing. I dated another guy who was in the fintech and start-up world. But when I met my stock market daddy, Fred, I knew that I had met my perfect match.

And since I’m not a gatekeeper and I know that not all girls have a year to learn about the stock market from their sugar daddy, I’m sharing some of the key things I learned from Fred.

Fred’s First Tip: Get on top of the lingo

Fred told me that, unfortunately, there was no way to speed through the learning process when it comes to the stock market. There’s a lot of lingo to learn, and even if you’ve heard of stocks and bonds, you need to have a thorough understanding of what those words mean. A few other vocabulary words he had me study on my own included:

• Dividend
• Capital gain versus capital loss
• Market Cap
• Bid
• Lot
• ETF (Exchange-traded fund)
• Asks and offers
• Bear market versus bull market
• Liquidity
• Earnings per share (EPS)
• Short selling
• Buyback
• Divestments
• Portfolios
• P/E Ratio

The key here, Fred told me, was not just to memorize the words without really understanding how they worked. So, after I had done the homework of looking up each of them on my own, Fred and I sat down together, and he gave me kind of a rundown on how each term would actually impact my investments.

Listen, we should have recorded that conversation and put it in a podcast, but unfortunately we didn’t. I would recommend that you look up videos on how these terms function in real life so that you’re not just memorizing vocabulary words.

Fred’s Second Tip: Learn chart reading

Charts are meant to display information in a way that we humans can easily interpret the data. Like, that’s the whole reason why they exist. But that doesn’t mean that we’re all intuitively able to read charts and make predictions based on the data.

So, unfortunately, I was going to have to learn some more vocabulary. In this instance, some of the concepts that Fred made sure I knew were:

• The chart axes. Every stock market chart has a vertical axis that shows the price of a stock and a horizontal axis that shows the time.
• What the different colors indicate. This was pretty self-explanatory: green means increase and red means decrease. But some charts use white and blue.
• The trend line. This is that all-important line that tells whether a stock is increasing or decreasing in price over time.
• Support and resistance lines. Fred explained to me that these are kind of like the bumper lanes at the bowling alley. They’re considered the price points at which a stock is unlikely to go above or below.
• Triangles. I always questioned my geometry teachers about when I would ever have to use triangles in my adult life, but it turns out they’re pretty important in stock chart reading. They can tell you when a stock is on an uptrend and how aggressively it’s being traded or dumped.
• Head and shoulders. No, not the shampoo. This is a pattern that is common in charts that shows when a stock is likely to experience a change from bullish to bearish.

Basically, once I got the basic ideas of how stock market charts work, Fred had me “analyze” a few different charts so that I could identify trends. This was actually really fun for me. Fred pulled up three stock charts from the 90s from some of the most famous companies today, and he had me try to guess which companies they were. I got them all wrong, of course, but the exercise was fun, and it got me to start reading charts that actually exist in the world.

Fred’s Third Tip: Decide between trading and investing

All my life, I had used trading and investing as interchangeable terms. But, apparently, they’re not.

Trading, Fred explained to me, is for short-term gains. It’s the more adrenaline-inducing side of the stock market where people risk more and take advantage of sudden price changes.

Investing, on the other hand, is for the long-game players. It has more to do with slow, steady growth with lower risk.

Ultimately, Fred advised that I do a little bit of both (we’ll touch on this in the next section).

Fred’s Fourth Tip: Start small while you’re getting the hang of things

After so much homework, I was really raring to go and start putting my allowance towards investments. But Fred told me to “slow my roll” until I really got the hang of things. This, of course, was the moment when we would talk about risk.

Ultimately, there are no guarantees in the stock market. So, there’s a whole list of strategies that people use to lower risk and make sure that inevitable losses aren’t completely devastating.

And just when I thought there wouldn’t be any more homework, Fred introduced yet another few concepts that I had to learn about risk management:

• The risk/reward ratio. Basically, Fred wanted me to look for investment opportunities that would offer a ratio of 1:2 or 1:3. This means that for every dollar I invested, the idea would be that I could expect $2 or $3 of profit.
• The 1% rule. Fred warned me that, no matter what, I should never strive to invest more than 1% of my total capital in a single trade. This would ensure that I wasn’t putting my savings at risk, no matter how good a particular trade might look.
• Stop/Loss orders. Stop/loss orders are like having a guardrail on your investments. If a certain stock goes beyond a certain price, a stop/loss order automatically sells the shares you own to protect you from significant loss.
• Diversification. Fred told me that my investment plan should look like a garden rather than farmland. By figuratively planting tomatoes, peas, squash, and corn, he said, my garden would have a better chance at weathering a calamity like a pest invasion or a sudden frost than, say, a single field full of corn.

Fred’s Fifth Tip: Don’t neglect your other forms of financial wellness

Many of the times that Fred and I sat down to talk about the stock market, we were having dinner at high-end restaurants. During this early stage of our relationship, I was still wearing a new outfit every time we had a date and would spend hours per week on self-care and beauty treatments. And, because I was so excited about putting my allowance towards my new hobby of stock trading, I was using my credit card for everyday expenditures.

But Fred had a little bit of a reality check for me. It didn’t make sense to me, he warned, to be making a little bit in the stock market while I was accruing debt month over month. He was also very concerned that I didn’t seem to have any money saved up for emergencies. So, we had a (I’ll admit) uncomfortable conversation about financial wellness in general. And yes, friends, there was more homework for me to do, including:

• Learning how to budget. I had never done a monthly budget. I just spent as much money as came in. But Fred told me that every person interested in building their wealth needed to get really comfortable with budgeting.
• Cutting out unnecessary expenditures. Sorry, credit card, but no more new outfits and surprise weekend getaways with the girls, at least until I was able to make some headway with my financial goals. For things that would help me with my sugaring, Fred advised that I should include them in my negotiations so that the sugar daddy could cover the costs of things like beauty treatments and gym memberships.
• Creating a plan for lowering debt. Fred had me go through my credit card statements and start looking at which ones had the highest interest rates. Those ones, I would try to pay off first.
• Writing financial goals. At the minimum, Fred said, I should have an emergency fund. It should be enough to cover three months of living expenses in case I need to take time away from work or my sugaring lifestyle. In addition, I should think about other financial goals, like buying property or going on a vacation.

It was only when I had all of the rest of my financial life under control that I should start thinking about investing, Fred told me. And with his help, I was able to lower my debt and build up my emergency fund in a matter of four months. That was just fine, actually, because it took me about that long to really learn the ins and outs of the stock market anyway. And you can bet that it felt really good to finally spend my allowance on my very first share purchase!

That same day, Fred took me out for an extra nice dinner and told me that he wouldn’t be surprised if I became someone’s sugar momma in half the time it took him to get to his level. I took it as a challenge, and I’m well on my way to meeting that goal!