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You have done it. You bought the biggest house on the street. You have made the final car payment. You’re set! You no longer have money going to anyone else! It stays in your own pockets! Well, what do you do with your money now? Sure, you could always take that extra cash you were spending and stuff it into your mattress, but what good would that do you? Very little. While saving for a rainy day is always a good idea, what is an even better idea is making your money work for you. Today, let’s talk about the pros and cons of investing in the stock market.
Exponential Gains
Many people have indeed become millionaires due to their savvy investing choices. But how does that come to be? It can’t be easy, right? Wrong. Investing and making money can be done by small individuals such as ourselves. It just takes time and research. The true benefit of investing is the amount of growth you can experience in the stock market. Investing in a strong stock can outpace a high-yield savings account twofold. Some people report that the interest rates on their savings accounts were as low as 1.2%! When investing, you can choose a stock that pays out a dividend at a higher rate than most high-yield savings accounts! You only need to own shares in that stock to get a payout.
Exponential Losses
Like anything else, there are good and bad aspects to investing. You may see a 50% increase in share price one minute, and then the next minute, it may fall to the floor. The stock market is very volatile and can change in the blink of an eye. This instability is something that tends to deter many retail investors. The only way to combat this is to be very diligent with your research and set boundaries on what you are realistically willing to lose. The stock market is not a guaranteed moneymaker. Many large corporations lose thousands every day due to market conditions and fluctuations. Do your research and come up with a game plan.
How To Get Started
There has never been an easier time for retail investors to take part in the stock market. With online brokerages like Robinhood, Webull, and E-Trade, you can create an account and start trading in as little as a day. I suggest ensuring you have money saved up first; you need funds to invest before you see any gains. The amount you start with is up to you. The best option is to choose what is affordable for you. Also, note that you can see gains in the long term, and losses can occur immediately, so make a game plan and stick with it.
There are many other resources available to you when it comes to stocks and bonds. If you’re unsure that you can do this on your own, reach out to trained professionals. There are always ways to increase your wealth but never try to take shortcuts to get there.
Did you like this article? Try out this one on our sister site: Career Transition Strategies.
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