Why Stocks Are Not Only For The Wealthy
Before anything else, it must be said that if you are looking at the stock market as launch pad to become the next Warren Buffett or George Soros, then you are in the wrong career./p>
The chance of that happening is like winning the Powerball lottery for $300 million in one shot, and you did not buy a ticket in the first place. Buffett was more of an outlier and he earned his moniker, “Oracle of Omaha,” for a reason. He was also a shrewd businessman who created a brand for himself.
In fact, showed that an investor data who starts out with $100 million capital will need over two decades of consistent compounding interest before he or she hits the first billion.
With that said, there`s plenty of play for beginners who want to earn some income or make a hefty profit in stocks. Truth be told, it`s even easier now to invest in stocks due to the advent of automated apps (such as Acorns or Stash) that can be downloaded right in your own mobile phone or PC. In theory, you can start with just $5.00.
That`s not realistic, of course. You can probably start at around $500 to $1,000, although wealth management companies suggest that you need to have savings of up to six months before venture in stock trading. This suggestion should not be taken lightly because for every success story on Wall Street, there are hundreds of horror stories, as well.
Starting out can be very intimidating. For instance, the NY Stock Exchange has over 2,800 active stocks being traded in the market. Some people have picking stocks down to the exact science. If you want to spread the risks, you can purchase exchange-traded fund (ETF) or emerging markets (EEM). You can also buy securities and bonds as a safe bet.
Losing money is a very real possibility, and you could easily end up in debt if you don`t protect yourself. There are also apps that can be downloaded, which can roll out computer models of transactions and market fluctuations. They can actually come up with recommended portfolio for you based on your asset, goal and even age.
Millennials are turning to stocks as an investment option because of the technology and wealth management companies are opening up their own restrictions to take advantage of this new trend. With a sound strategy, good advice and risk management, you can make money off stocks even if you are not wealthy.