Investing is one of the best ways to make money without actually working. And if executed properly, the right investments can change your life. Be careful though, careless investments can leave you wondering "Where'd all my money go?". Today's Business Buddy Blog is going to dive into investing and some different strategies to help you make informed investment decisions!
"The biggest risk of all is not taking one."
- Mellody Hobson CEO of Ariel Investments
Step 1: Determine your Goal
When it comes to investing most people have a certain way in which they invest to achieve their goal. These strategies will change dramatically based on your goal. If your goal is to invest as a full time job, you may want to explore trading stock options or futures contracts. But if the goal is to slow grow a retirement account, you will probably end up investing in ETFs or Mutual Funds. This is why step 1 is determining your investing goals. Once you have that, now we need to look at the smartest way to achieve those goals by weighing risk vs reward.
Step 2: Select your Strategy
For this section we will go over a couple different investing methods and you can decide which one is best for you. We will break this down into 3 different styles; Aggressive, Moderate, and Passive. Each one has its benefits and risk but all of them make your money work for you, instead of you working for your money. Let's dive in.
Aggressive
This style is not for the faint of heart and the investing methods here can leave your brokerage account at $0 or even owing a bank money if you decide to invest with Margin. On the other hand, if you can successfully trade with one of these methods, you could make a substantial amount of money.
Method 1: Futures
Method 2: Stock Options
Trading Futures and Stock Options are very risky but can be extremally rewarding. You can turn $1000 into $10,000 in a short amount of time. In other words, your money works for you. Below are two guides to learning how to start trading with either Stock Options or Futures.
Futures: How to Trade Futures
Stock Options: How to Trade Stock Options
Moderate
Under the moderate category is your normal buying and selling of stocks. This is also the most popular style of investing to the average person. Buying a stock in a company is like owning a small portion of that company. Some companies even pay you to hold their stock for a certain amount of time; this is called a Dividend. Dividends are paid out in company stock. These dividends continue to add up over time and the more stock you own in the company, the more dividend payouts you get.
This compounding over time is one of the reasons buying company stock is the most popular form of investing. Today it is simple to buy stocks in any company. All you have to do is download one of these apps into your phone, enter some basic information, and begin trading. Some of the most popular companies in the United States are Robinhood and Stash Investing.
Passive
A passive form of investing is done twenty or thirty cents at a time. These small deposits will add up over time and eventually give you the capital you need to pursue other forms of investing. With this style you will not see returns over night but if you are patient the balance will grow exponentially.
Acorns: https://www.acorns.com/
Step 3: Learn and Be Patient
Doing thorough market research is the most important 🗝️ to success. You can not invest properly without market research. It tells you when to buy, what to buy, and most importantly when to sell. Utilizing investments sites such as www.investing.com or finviz.com make market research fast and easy for any investment your thinking about making.
Remember to be patient when you start something new. You're going to make bad decisions and you're going to lose money but that's just part of the learning experience. Don't be discouraged and always remember to be patient!
Thanks for reading the Business Buddy Blog
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