Who doesn’t want to be as rich as Warren Buffet or maybe have a chance to be included in a local Millionaire’s Club? Who doesn’t aspire to achieve the accomplishments of those who belong to the elite list of Forbes’ Richest People? Well, many of us want that.
Regrettably, we have already fixated in our mind that fortune can only be achieved in two possible ways: physical hard work and luck. Thus, we work so hard in the office, wait for a very long time to be promoted, and achieve the top. Or we choose the easy way, where we depend too much on luck, going to the Casinos and betting at the Lottery to “possibly” increase our chances of getting wealthy. Only a few realize that they can utilize their hard earned money to work for them by investing it in stocks.
Yes, you heard me right. Our money can work for us if it will be properly invested and the simplest and best way to invest it is in stocks. In any case, the stock market is not just for the rich and famous, it is for everyone who is interested and willing to allot time and money to learn so that he may benefit from it. As a result, you will need a lot of courage, mathematical and analytical skills, critical thinking, discipline and patience as tools that will help you to get started in investing.
To start with investing in the stock market, we must learn first what a stock is. Stocks are not simply pieces of paper that needs to be traded in the market. A stock represents an ownership in a company. Therefore, if you own stocks of a particular company, you become one of the owners of the business. However, your rights as an owner varies by the kind of stocks you have and by how much or how many shares you own. But the bottom line is you are one of the owners and the value of your ownership will rise and fall with respect to market success of the business. Meaning, the better the business does, the more the value of your ownership will be.
The market is very big and there are many possible options to invest your money, like in bonds, antiques, real estate and more. But why do we have to choose stocks instead of those other options? The answer is very simple. Stocks provide the highest potential return among others and it indeed tends to perform better than any other type of investments in the long term.
Unfortunately, the drawback with stocks is that it is the most volatile among the investment options. How? For the reason that the value of stocks vary depending on the economy wherein stock prices may drop for a long period of time and the return will be very low or none. However, this can be minimized by taking the long-term approach of investing where in general, the average return is still positive.
It is true that there is no guarantee in investing and the risk is too high to gamble. But in reality, there is no place or decision that is without any risk. However, with the aid of different tools and with proper knowledge and training, investing should be generally easy and fulfilling. Also, higher gains are not impossible to achieve.