In this quest of mine to make my bank account swell I have been diving into some new potential sources of income. Stock trading is one of them. As always, no matter what venture I’m pursuing I do it my way and wear what I please. Destroyed denim on Abbot Kinney works perfectly for a part-time stock trader like me! When you buy stocks you are buying ownership interests in companies and are in fact, a business owner. This requires you to know a few things that sound more difficult than they really are. You’ll need to learn to read financial statements, consider how companies actually make money, be able to spot trends, figure out which businesses have competitive positions and know how much to pay.
As you seek to increase your net worth, you face an immediate choice: Do you want growth in the value of your original investment over time, or is your goal to produce predictable, spendable current income–or a little of both?
Consistent with this investor choice, investments are frequently classified as either growth or income oriented. Bonds, for example, generally provide regular interest payments, but the value of your original investment will typically change less than an investment in, for example, a new software company, which will typically produce no immediate income. New companies generally reinvest any income in the business to make it grow. However, if a company is successful, the value of your stake in the company should likewise grow over time; this is known as capital appreciation. It is smart to diversify your portfolio and spread your wealth through asset allocation which basically means don’t put all your eggs in one basket. Dividend and interest payments are received regularly which means you are making money off of your initial investment (income oriented) but the BIG bucks lie in how much risk you are willing to take and how long you are prepared to leave it alone (growth oriented). In my opinion, those of us in our 20’s shouldn’t be afraid of high-risk investments and can focus more on growth oriented stocks because we can afford to lose it. We have time to make it back! And what if we win… What if we put in 5k today and in 10 years that is equal to 50k or even 100k!! Nothing worth having comes easy and fear is for the weak.
A few websites I have found helpful are http://www.etrade.com and www.sec.gov
As the sun sets on the West Coast tonight I will turn my computer off and count on the ‘Stop on Quote Order’ I put in effect to manage my potential sales. I could triple my investment by morning 😉
I will continue to learn about the market and share all I can. With patience, determination and a hunger for wealth it will come together. Money is abundant and there is enough to go around for us all.