An investment is an excellent way to make a bit of extra cash if you are lucky enough to have any lying around the house. Let’s face it – stuffing it in a mattress isn’t a long-term plan. But, average investors tend to stay away from the stock market and concentrate on options which they feel are less complicated.
From property to jewels and everything in between, it’s tempting to try it all and stay away from the wolves on Wall Street. However, the stock market can make you, yes you, a millionaire and here are the reasons why.
Your money will be safe in a bank account accruing interest, right? Well, that isn’t the case because the rate of inflation directly impacts your savings. Should it rise above the amount of interest, you will lose money and that is a fact. Stock options might be risky, but the ROI is far higher than the current rate of inflation. And, it is possible to avoid the common hazards if you listen to the right advice. Buffett, the man himself, advises investors to opt for safe options and accrue a steady flow of revenue. Over time, your bank account might house a seven-figure sum.
Risk Vs Reward
Okay, plenty of people have taken on the stock market and lost everything as a result, and you don’t want to be the same. There is no caveat to this either because stock options are dangerous and there will always be an element of danger. However, for every action, there is a reaction and that means the reward is just as big. Bitcoin is without a doubt the best example of risk vs reward. In its early stages, people thought it was a flash in the pan and now the price is close to $20,000 per share.
The idea of cutting costs doesn’t seem likely to a novice, but there are ways to reduce expenses. The TastyWorks trading platform is one of the most popular value tools at the moment, and you can read about it on Investormint. But, the good news is that there are plenty of apps which focus on reducing the amount you have to pay. The key is to find the one which suits you the best and not to listen to gossip. Sure, there may be a Holy Grail of a platform, yet you should research it first and analyse its strengths and weaknesses.
It’s worth noting that no one should put their entire budget into stocks. Not only is it dangerous, but it’s silly because great investors diversify. What you need to start doing is mixing traditional options with the ones that have the potential for growth. Stocks and shares may be frightening, yet they often lead to the greatest return on investment. And, should the market take a turn, the rest of your portfolio should offset the losses.
Many men and women have used the stock market to become a millionaire, and you could do the same.