Stock investing has become a very popular way of making money.
However, the question is: Can stock investing make you rich or will it tear you apart?
Well, when it comes to investing money it all depends on whether you know what you are doing.
Knowledge is the key to success!
Keep in mind that stock investing comes with great risk and that if you are not ready for that, then I recommend you switch to a different option.
What is stock market investing?
Stocks are units of companies which are shared to the public, in order to raise the company’s capital.
These stocks are bought and held for a certain period, until they increase in value.
The goal is to eventually sell the stock for more than what you paid for it.
Here are some reasons why companies sell stock:
- Create new products
- Have the funds to restructure their buildings
- Hire more employees
How does stock investing work?
When buying a stock, you end up owning a part of the company.
This means that you become a shareholder.
Your stock value goes up and down depending on the company’s profits.
Why would you invest in a stock?
Stock investing has increased in popularity over the years and the internet is filled with useful tips and courses to succeed as a shareholder.
People with an average income might get into stock investing for the purpouse of making more money.
Wealthy people on the other hand, might decide to become a shareholder because they simply need a place to put their money and let it grow, rather than stagnate.
If you have lots of money sitting in your account, this will not grow much over the years (or not at all!), but when you invest in a stock, you have a greater chance to see it grow.
What is the best stock for beginners to invest in?
Getting started on something new can be really intimidating, especially when it comes to investing money and you don’t have a lot of it.
This is why beginners should start off buying low priced stocks.
Doing so will give you a good opportunity to test the waters, do some practice and see if stock investing is really your cup of tea.
Gobankingrates.com crafted a nice list of 15 stocks for beginners to try. Here is a summary that includes name of the companies and their current stock prices:
- Verizon – $47.86
- General Electric – $22.98
- Merck & Co. – $63.39
- International Business Machine Corp – $160.39
- Tractor Supply Company – $58.82
- Interl – $39.67
- Xperi – $22.70
- Anadarko Petroleum Corporation – $47.79
- Proctro & Gamble Co. – $93.04
- Coca-Cola – $46.18
- Wal-Mart Stores – $86.62
- First Republic Bank -$94.97
- Celgene Corporation – $136.46
- Dollar Tree – $91.50
- Knoll – $19.70
Is it a good idea to invest in stocks?
Investing in stocks is definitely a good idea if you have the money to do it.
When you just save money in your savings account, this only grows by a small percentage each year, while when you invest in stocks you have the opportunity to grow your funds even more.
However, knowing how to invest is really important in order to avoid going bankrupt.
Investing in stocks is really risky, so I recommend you do your research, read books and follow a good course/find a mentor to prevent your money from being thrown out in the wind!
There are also various stock simulators online which you can use to practice.
Here is Investopedia Stock Simulator. Their website also offer courses aimed at beginners.
Can stock investing make you rich?
Stock investing can make you rich if you invest hard and take a lot of risks.
However, it does take time for stocks to grow in value.
According to thebalance.com, people who invested $10,000 in Microsoft in 1986, would have had the following by the end of 2014:
- $5,526,749, of which $4,532,922 came in the form of Microsoft stock sitting in their bank vault
- $993,827 from cash dividend checks
So in the example above, you can see how it took almost 30 years to make so much profit.
Everything also comes with the risk of companies shutting down or losing value, so only real experts can make great profits with stock investing.
Some people might also find stock investing very stressful as it is a constant battle between winnings and losses.
There is also the added stress of constantly having to check how the stock market is doing and promptly selling the shares that are losing value.
Is there a less risky way to make extra money?
Stock investing is not the only option out there that can allow you to make money.
Some of these options are less risky than others.
In my opinion, the least risky way to make money is Affiliate Marketing.
Whether you want to do it to earn extra cash, quit your full time job or make 6 figures a year, you can just start with $0 to $50 per month.
Earnings will depend on how much work you are willing to put into it.
You can learn more about it in my How to Make Money Online Legitimately post 🙂
So what is your opinion on this topic? Can stock investing make you rich?
Do you have any experience in stock investing and if so, how have you been doing? Let me know by leaving a comment below 🙂