Achieving financial independence is becoming more and more of a stressor for many. So much so, that the idea of financial freedom is seemingly becoming more and more difficult to attain. Stock is one of the economy’s most lucrative pastimes that, with a little preparation and knowledge, can turn out to be profitable for the future. For those who are willing to make bold, long-term financial moves, there are many investing methods available.
Don’t Trip Over Myths
What may stop you from financial liberation is what may or may not be your pre-determined notions on the subject at hand. The biggest myth is that you need money to make money. That’s not true at all: it’s about compound interest. Compound interest is the interest on a loan or deposit paid over time. If your investments compound, so do your costs. Starting small and being consistent is the wisest decision (and often the hardest). Learning how to be your own stock analyst is the greatest defense against the market.
Start Early
At this point, if investing is for you, you will need to prioritize starting as early as possible. Studies show the earlier you start, the more time your money has to begin compounding. According to Investopedia , “Most experts say your retirement income should be about 80% of your final pre-retirement salary. That means if you make $100,000 annually at retirement, you need at least $80,000 per year to have a comfortable lifestyle after leaving the workforce.” Of course, if this only includes your retirement plan from being employed, having stock in other companies can either maximize or supplement the amount.
Gather Intel
The best protection is to make sure you’re staying knowledgeable about the stock world. A plethora of services exist online, but there are so many options. Consider sites that offer the basic information first. You will find many places with similar information for stock retirement plans and the most popular stocks in different industries. Look at trending topics and Of course, if these aren’t to your liking, and you’re somewhat of a beginner, consider experts to watch the stock market for you. If you want to learn by yourself, there are how-to articles .
Be Wary of Potential Scams
It’s safe to say that with any new turf, you want to watch out for unknown pitfalls. Your money is precious, so you must learn how to discern between legitimate investments and scams. Or, at the very least, learn to watch for signs. Certain scammers are either straightforward or extremely convoluted, making websites and fake companies with several “employees.” A Scammers number one MO is to get you to, you guessed it, send them your money. Scam artists will typically be those who are gullible or lost money on a recent investment. They likely will promise repayment, as long as you “invest” in them. Their actual company could be real or fake, either way, they will convince you of one or two things: their pitch is an honest one, or that they are honest themselves. They may ask for fees and may disguise themselves as a trader, wanting you to trust them to invest your money wisely. These tactics are often deployed over the phone, via email, through seminars, and some trading and investment courses. Watch out for tactics that give you a sense of urgency with the intent to get you to invest right then. Take time to consider, and do your research on what they claim to be. Challenge yourself with Oxford club review , a strategy that’s a point of skepticism for many right now.
Find Your Perfect Stock Category
The first place to start? Maybe with something you love. You can find stock for nearly every field, product, and service out there. Of course, that’s your natural inclination. The point is to go for something you’d be interested in staying up to date on. Maybe putting all your eggs in one stock basket is not for you? You may want to stick with something you have an interest in researching. There are 11 stock sectors : materials, industrials, financials, energy, consumer discretionary, consumer staples, information technology, communication services, healthcare, utilities, and real estate. Don’t worry, you’ll start to notice some familiar industries when you look up the most popular ones.
Plan for the future
Day trading can be fun, but constantly buying and selling stock is not wise for the future. The problem with buying and selling stock all the time is that you’re hit with a lot of taxes. Maybe you’re pretty versed in stocks and already have a plan laid out for you. If you want to dive into some particular stocks you have in mind and be your own stock analyst, some sites keep a database of current stocks . Remember: do not invest blindly. Do your own research into a potential stock investment, maybe starting with industries and finding the best-performing companies. Word-of-mouth from family and friends, though tempting, needs to be looked into. Initially to grow trust between your industry of choice and to practice staying ahead of scams.
