Journey to Self Employment in the Stock Market
How much money do I need to start investing and how much money can i make?
You can start investing with just a few dollars now. There are many brokers who will allow you to create an account and make trades for free. Robinhood and Fidelity are two mainstream brokerages that will allow you to invest your own money for free. There are several others.
I started my account with fidelity a month ago with 100 dollars: it is now sitting at 107 dollars. I am not a professional trader, and the stock market can go up and down at a moments notice: do not invest any money that you cannot afford to lose, because it CAN evaporate overnight. Face that risk and own it; but also keep in mind that while losses are normal, total loses are not(but they can happen, always prepare for the worst).
How much money can I make is a more challenging question.
In our daily life its often necessary to think in terms of total cost of goods. A gallon of milk is $1.50 is a more useful understanding than knowing a gallon of milk is 0.0015% of my budget. In investing it is critical to think in terms of percent rather than raw dollar value. If you buy 1 100 dollar stock that goes up 3 dollars per share, or if you buy 100 1 dollar stocks that go up 3 cents per share you have made the same amount of money.
With that in mind lets talk about realistic goals. A stock market index is a measure of the average change in price of every stock contained in that index. These indexes we have all heard on the news; the Dow Jones, the S & P 500, and the NASDAQ. There are others, but these are the big ones. In clicking the links you will notice that the daily change in those indexes is very small. If the stocks you chose are able to meet the change in the index that is the percent gain you can expect. The goal, and it is an attainable one, is to make sure that your trades over time beat the market index, and this is an attainable goal.
In the chart above we see the percent gain in action. $35,000 seems like an insurmountable sum of money. The most important part of starting this endeavor is your attitude; stay positive and don't bail out. If your are able to hold to 3 percent gain every month with 100 dollars chances are you will be able to hold to it with 10,000 dollars as well. Every trade you make and every dollar you deposit is more raw earning power in your system. Fine tune your skills and strategies with a small mount of cash on the line so that as you grow you get better, increasing your gain over the indexes and learning how to protect yourself from loss are excellent uses of your time with small transactions; after all they won't be small forever!
Especially if you are starting with a small sum of money its important to focus on your percent gains rather than your total money earned. I have entered and left the stock market on two other occasions, and both times it was because of attitude. I was making money but the raw dollar value was too low; it seemed I was wasting my time. Focus on building your stock account as if you are building a business; the gains you make now are meant to snowball overtime. The investments you put into your stock account are investments to your future business. Protect yourself from loss by making sure the money you invest is not needed for life; do not borrow money to invest, and do not run away from it. Using these tools you will move forward and succeed.
There is an art to reading the news and charts you will be bombarded with when you move into the stock market; there are many guidelines but few rules. Over the next articles I will discuss those rules and guidelines in detail.
I hope this article has achieved its goal: to illustrate the manageable risks of entering the stock market as an investor as well as the realistic options for a self sufficient future in investing. Had I utilized these insights ten years ago the first time I entered the market my financial life would be wholly different today; and it is my sincere hope to share with you the journey of transformation I will undertake.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.