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How To Invest In Stocks And Make Money

How To Invest In Stocks And Make Money

How To Invest In Stocks And Make Money

Introduction.

The only kind of education that the traditional school system does not provide is financial education. Only a few people are lucky to come across this kind of education, and they do so in an informal way.

The traditional school system is so against getting financial education that it has raised hopes for so many people and disappoints them in the long run.

Many people with various educational degrees are not doing well financially. Most of them even work as twice as hard as anyone on the face of the earth, but they never make it out victorious; the majority even die broke.

Meanwhile, on the other hand, there are so few other people who dissed the education provided by the traditional school system and embraced financial education; the majority of these people are the ones that you find on top, the majority are even captains of industries.

When you look at the current Forbes list, all those people that you see listed are people who, at one point in life, embraced financial education; mind you, they did not get it from school; remember, the school system hates people with financial education.

All that the school ever prepare its victims for is a life of mediocrity and averageness; the motto is simple;

Get a degree and find a job and save for retirement.

If you are presently in this trap, I suggest you find a way out because that path is gruesome and does not pay in the long run.

It used to, during the industrial age, but now in the information age, where computers are replacing man’s inefficiency, I suggest you have a rethink.

You should find a way of avoiding the rat race at all possible costs. Life is not fair to anyone; you have the sole responsibility of making life fair to you, and in most cases, getting a good job does not guarantee that life will be fair to you because all you will ever do is live your life for someone else.

My Personal Experience.

I was young when life came in hard on me; while growing up, I understood what it meant not to have enough money; all I ever did was the desire the best dress, game console, best car, a fine house, vacation, but I never got it, till I changed my thinking pattern, this has helped me a whole lot, and I recommend you do the same.

I was a high-school teacher when I came across a book that changed my mind, and that book was called “Rich Dad, Poor Dad” By Rober Kiyosaki.

Readers are leaders, and the fact remains that there is no mountain anywhere; the only mountain in your life is your ignorance.

In that book, Robert Kiyosaki took the time to explain the rudiments behind getting a basic income, and that is stuck in my head today.

He pointed out the four income quadrants of every person on earth.

E – Employee
S – Self-employed
B – Business
I – Investment

To buttress these income quadrants.

1. An employee is someone who works for someone, with all hopes of getting paid for labour at the end of a particular time.

If such a person stops becoming an employee, such an income flow is stopped.

2. A self-employed person has acquired specific skills and is knowledgeable enough to monetize them; such people include Artisians and skilled people.

Such a person in this income quadrant makes money only when he can sell their service to a third party.
If such an individual stops selling off his money services, the income flow is stopped.

3. A Business owner, on the other hand, is someone who has built a business up to the extent that he can employ and pay over 500 employees.
Most people are quick to call themselves business owners when the number of their staff is restricted to only them.

4. An investment is an income stream that works for you whether you are there or not there.

You don’t need to own massive staffing, a business idea or a Land to create an investment; all that put to use is your money.

In this income quadrant, all that works for you is your money. Now, I know that you are surprised; in this article, we will be talking more about how an investment works.

You don’t need to have an idea or a skill; knowing how to make your money work for you makes you a good investor.

There are various ways to make your money work for you, some have proposed cryptocurrencies, but in this article, I will show you how to invest in stocks.

Why Should You Invest In Stocks?

Stock prices fluctuate throughout the day, but investors who own stock hope that the store will increase in value over time.  Not every company or stock does so, however. Companies can lose weight or go out of business entirely. When that happens, stock investors may lose all or part of their investment.

This is more reason why investors need to do thorough research about the companies they intend to invest in and a wise act to spread their money around, buying stock in many different companies rather than focusing on just one.

Stocks carry more risk than some other investments but also have the potential to reap higher rewards. Stock investors earn money in two main ways:

1. Hold and Sell Method – If the price of a stock goes up when they own it, and they sell it for more than they paid for it.

2. Through dividend – A dividend is created to allow you receive regular payments from a particular stock or more. Not all stores pay dividends, but those that do typically do so quarterly.

1. Invest in Stocks to Grow Your Money.

While starting a business might not be easy to grow your money, you can also invest in stocks and begin raising your cash right away.

Investing in stocks can help you grow your money by over %10 in the long run.

The Bottom line is that you can turn $10,000 per year into more than a million dollars over 30 years through regular investing.

Now, $300,000 of that million dollars is the money you directly invested each year. But the other $710,730 is money you made from investing in stocks.

The critical point is that investing in the stock market can make your money grow much more significant over time. And this remains the number one reason people invest in stocks.

2. Invest in Stocks Because Money Sitting in the bank Will Lose Its Value over time.

Inflation is one of the enemies of currencies worldwide, causing them to decline each year drastically.

Think of inflation as the slow but steady force that makes things cost more over time.

Back in the days in a country like Nigeria, the cost of travelling overseas from Nigeria was more petite than N70. Still, with insufficient government policies created to kill businesses, inflation went up. As a result, it brought down the economy, causing the cost of goods and services to go up, manifested in currency devaluation.

What that means for you is that your hard-earned money is slowly losing its value over time.

For Example, if you save $10,000 this year and put it under your piggy bank for the next 30 years, it won’t be $10,000 when you take it back out; it would have devalued.

The fact remains that when you have dormant cash sitting in a bank waiting to be put to use in future, then such an amount of money would be devalued.

Since 2000, the annual inflation rate has been between 1% — and 4%. That means your money’s buying power erodes by 1% — 4% every year.
Investing in stocks can help the value of your money escape inflation and appreciate over time.

3. Investing In Stocks Helps You To Grow your Investment.

With the evolution of the stock market, building a brick-and-mortar business has become obsolete. You don’t longer need to have a business idea or even think about starting your own business before you begin to make money.

Stocks have earned more wealth for investors than most other investment options. On average, investors in the U.S. and worldwide have profited more from buying stocks than any investment initiative.
I am not asking you to throw all your savings into buying stocks at once without proper education because if you do that are possibilities that you are going to lose money.
Owning stock does not replace starting your business if you have the idea.

4. Investing In Stocks Is One Of The Easiest Thing To Do.

All you need to get started with stock is a working knowledge of how the stock market works and a valid stockbroker offline or online.

If you are fortunate enough to have some savings and possibly have some money to spare, then investing in the stock market is a good idea.

Owning your first stocks has become relatively easy with the digital revolution; all you need is little cash sitting in your bank account, a smartphone/computer, sign up with an online trading broker, click a few buttons and buy some stocks.

Make sure to spend more time studying trends worldwide to make sure you don’t end up buying the wrong stocks.

You should also know that Stocks are often called “liquid assets”, which means they can be turned into cash relatively quickly.

Most people invest in stocks because they feel like they can call their money back home whenever they want.

For Example, if you had $5,000,000 invested in the market at 3 pm on a Tuesday and wanted to get all your money out right away, you could most likely turn that million dollars into cash in a few minutes with just a few clicks.

5. Invest in Stocks for Income Diversification.

Do you have an active business and want to add more income streams to the book? Then, investing in stocks is not a bad idea because it can help you diversify your income streams, whereby you have various options to make money from.

The more ways you have to make money, the less you risk getting in financial trouble if anyone’s method gets disrupted.

For Example, let’s pretend that you have a full-time job, own a real estate business or dive into the stock market.

When life happens to one of those income streams, you are likely not to lose all at once because one of these income streams will stand up for you. Stocks can be another type of investment, diversifying against potential trouble in one area.

6. Invest in Stocks So You Can Own Part of a Company You Love.

You’re officially a part-owner when you buy even a single share of a company. This makes you entitled to a specific part of the company; let’s assume you buy a stock in Apple, Inc, then Tim Cook, Apple’s CEO, legally works for you.

Are you passionate about specific brands, and do you aspire to own part of the company? Then buying stocks helps you achieve that. For example, if you buy Apple (AAPL) stock, you’re the company’s owner.

7. Invest in Stocks to Learn.

So many people always find themselves making the wrong decisions in life; the good news is that investing in stocks will teach you a ton!.
You get to understand how the stock market works, how companies succeed or fail, how products come to market and how economies impact companies.

You also get to learn about companies and products, analyze CEOs and company leaders, and make essential decisions that can significantly impact your financial future.

Plus, You will learn to think in new ways. For example, investing in the stock market requires logic, analysis, and thoughtful reflection. Having these skills as an individual makes you strong enough to make hard life decisions.

How To Start Investing In Stocks.

Companies typically begin to issue shares in their stock through an initial public offering or IPO.

Once a company’s stock is on the market, it can be bought and sold among investors or, better still, a stockbroking firm.

Not too many people have enough education to invest correctly in the stock market, and they lose money due to this.

In this article, I will prepare you for the proper steps to take when trying to invest in the stock market.

1. Research The stocks You Want To Buy And How You Want To Invest In The Stock Market.

One crucial thing when choosing to invest in stock marketing is that you need to get your information right, holding on to a breakthrough in the stock market, which is primarily determined by the level of knowledge you have about business in general.

There are several ways to approach stock investing. In this article, I will be breaking it down into tiny pieces so that you know which to get started with.

Please choose the option below that best represents how you want to invest; it can be broken down into three stages which include.

1. Choose your prefered stocks and fund them on your own.

2. I am hiring an expert to manage the process for me; this may be a stockbroker.

Once you’ve identified the target companies that you intend to invest with, it’s time to do a little research.

Start with the company’s annual report, specifically the management’s annual letter to shareholders. The letter will give you a general narrative of what’s happening with the business.

After that, most information and analytical tools you need to evaluate the business will be available on your broker’s website, such as SEC filings, conference call transcripts, quarterly earnings updates and recent news.

Most online brokers also provide tutorials on how to use their tools and even seminars on picking stocks.

2. Choose An Online Stockbroker.

The internet has disrupted the way things are brought done worldwide, including the way stocks are being traded.

The easiest way to buy stocks is through an online stockbroker. After opening and funding your account, you can buy stocks through the broker’s website in minutes. Other options include using a full-service stockbroker or purchasing stock directly from the company.

Opening an online brokerage account is as easy as setting up a bank account. All you need do is complete an account application, provide proof of identification and choose whether you want to fund the account by mailing a check or transferring funds electronically.

Once you have set up and financed your brokerage account, it’s time to dive into the business of picking stocks.

An excellent place to start is by researching companies you already know from your experiences as a consumer.

Don’t let the fluctuating data and real-time market gyrations confuse you as you conduct your research. Instead, keep the objective simple: You’re looking for companies you want to become a part-owner.

It would help if you also kept in mind that, Warren Buffett famously said,

Buy into a company because you want to own it, not because you want the stock to go up.

He’s done pretty well for himself by following that rule.

3. Decide How Many You Share Want To Buy.

You should feel no pressure to buy a certain number of shares or fill your entire portfolio with stock.

Instead, consider starting small by purchasing just a single claim to get a feel for what it’s like to own individual stocks and explore how thick your skin could be after losing little.

Over time, you can add to your position as you master the shareholder swagger. One of the innovative ways to start investing in stocks is to make sure to cast your bread upon the waters. But I recommend you start as slowly as possible.

Putting your money into a single stock is a risky strategy, even for professional investors. Stocks can fluctuate wildly in value and even become worthless, so you risk your money if you only buy one stock.

4. Manage your stock portfolio.

One thing about investing in stocks is the anxiety that comes with the fluctuation of stocks; you are not sure when one store will go up and when one will drop.

For example, during the covid season, flights were asked to stop, which affected the aerospace industry, with companies like Boeing, Bombardier and many others being involved.

Fretting over daily fluctuations won’t do much for your portfolio’s health — or your own — there will, of course, be times when You will need to check in on your stocks or other investments.

A few things to consider If you’re approaching retirement, you may want to move some of your stock investments over to more conservative fixed-income investments.

If you seek business ideas on how fixed-income investments start, I wrote a comprehensive guide on the best business ideas to create that would fetch you a lot of money.

If your portfolio is too heavily weighted in one sector or industry, consider buying stocks or funds in a different industry to build more diversification. Finally, pay attention to geographic diversification, too.

FAQ about investing in Stocks.

Here are some of the FAQ Questions about investing in Stocks for starters.

1. Is investing in stocks a good way to make money?

Investing in the stock market is one of the world’s best ways to generate wealth. You generate passive income when you invest in stocks because you make your money work for you. But with the great potential reward also comes great risk, especially if you’re looking to get rich quick

2. How do you gain money from stocks?

There are two major ways to make money from the stock marketer and they are; the return that comes when the stock’s price appreciates and you sell off and dividends that come from the company at a particular time of the year.

3. How do beginners invest in the stock market?

One of the easiest ways is to open an online brokerage account and buy stocks or stock funds. If you’re not comfortable with that, you can work with a professional to manage your portfolio, often for a reasonable fee. Either way, you can invest in stocks online and begin with little money.

4. What stock will make me rich?

I can’t say for sure, it all depends on your financial education, and how well you know the company, there are fortune 500 companies that have been speculated to make investors millionaires but end up crashing. Make sure you learn about the company you are willing to invest in.

Conclusion.

If you decide to buy a stock, you’ll often buy it not from the company itself but from another investor who wants to sell the stock. Likewise, if you’re selling a store, you’ll sell to another investor who wants to buy.

If you own a majority of shares, your voting power increases so that you can indirectly control the direction of a company by appointing its board of directors.

For most ordinary shareholders, not being able to manage the company isn’t such a big deal. The importance of being a shareholder is that you are entitled to a portion of the company’s profits.

 

What do you think?

Written by Udemezue John

I teach you how to make money online.

You can connect with me on Twitter Twitter.com/_udemezue

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