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Millionaire in the Making

By Melissa Maupin

When Katie Beeman graduated from high school in Duluth, MN, last year, her classmates voted her one of the Top Five Most Likely to Be Rich in 10 Years. At age 18, Katie has already claimed her place in the world of enterprise. Not only has she started and run two successful businesses — a lawn service and Christmas tree lot — but she has also been actively investing in the stock market since the age of nine.

First Steps

Katie’s father helped her select her first stock in the Minnesota Power utility company because Katie’s mother had worked there and he believed it would be a stable investment. “I would take $20 a month from allowance or babysitting and invest it in the local utility company,” says Katie. “It gave me discipline. I knew that I had to make an investment, so I had to make more if I wanted spending money.” When she turned 12, Katie joined a school investment club. “They gave us $5,000 in fake money to invest in a stock market game on the computer.” The students worked in groups of five and followed their stocks for six months.

Money to Invest

About this same time, Katie started her first serious business — a lawn-mowing service. The extra income allowed her to begin investing for real in some of the stocks she had been tracking in the computer game. By the time she turned 15, she opened a second business, a Christmas tree lot, and she was able to invest even more seriously.

Katie didn’t spend a great deal of time researching the companies she invested in. “Basically, I bought the stocks that did well in the game,” she explains. “I chose ones that I could afford — mostly stocks that were $20 to $40 per share.” She also looked for established corporations and ones whose products appealed to her, such as Pepsi and McDonalds.

Long-Range Planning

Once Katie invested in a stock, she left it alone for long-term growth. Last year, after graduating from high school, she cashed in all her shares of stocks and put the money in a mutual fund, which she plans to add to every month. She felt she could make more money in a mutual fund and, since a stockbroker manages her account, she can concentrate completely on college studies. Katie’s entrepreneurial experiences, along with her hard work at school, proved to be an excellent investment. She won a four-year Young Entrepreneurial Business Scholarship to the University of St. Thomas, along with three other scholarships and several state grants. The award money will allow Katie to pursue a double major in entrepreneurial business and journalism. After graduation, she plans to attend law school and then become a business correspondent for a television network.

Stock Savvy

• Join a business club, take a class, or play a stock market game before using your own money.
• Talk to a smart investor, such as a stockbroker, and get good advice.
• Look into the companies where your parents work. Some offer good stock options for children of employees.
• Discipline yourself to set aside a certain amount of money to invest each month.
• Be patient, it takes time to see money grow.

Entrepreneurship
Pays Off

Katie learned quickly that it takes money to make money. To generate income, she ran two successful seasonal businesses. What did she learn about starting and running a small business?

Start Small. “When you are young, the reality is you have to do what you are capable of doing,” she explains. Katie started a lawn-mowing service because she knew how to cut grass and there were dozens of lawns in her neighborhood that needed a trim.

Find a Need. While working on her lawn-service business, Katie
discovered that homes for sale often sat vacant for months after the owners moved away. Real estate agents needed someone to maintain the lawns and keep the property looking good. “I printed a flyer and faxed it to every agent in town. Soon several major firms hired me to mow their lawns.”

Take a Risk. After working for a friend who owned a Christmas tree lot, Katie determined that the business was fairly simple to run. “I decided that if I was going to sit there and man the stand, I might as well be making all the money.” The next holiday season, Katie opened her own Christmas tree lot, successfully ran it for three years, and used the money to finance her college education.

Hang Tight. Katie started mowing her neighbors’ lawns and ended up with so much work, she had to hire several employees to help. “I didn’t get 70 lawns the first year of business though,” says Katie. “It took five years, but it paid off.”