Finance

How to invest in a stock

Are you thinking of making more income? Check this guide on how to start investing in the stock market and maximize your revenue.

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Only a crazy person (or a very grateful one) doesn’t have a dream of generating more income. Many people study harder, work harder and look for strategies that may make them generate more and more money over time.

One of the best ways to achieve this goal is to expose yourself to the stock market. If you manage to study and understand how the market works, but not only that, if you stay true to your philosophy and understand this is a long-term game, not a lottery ticket, you have a big chance of being successful.

There are very examples of how high a good investor can get, one of them being the legendary Warren Buffet, that didn’t start as an investor but used this path to maximize his income.

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After all, what is a stock?

Imagine there is a company whose value is exactly US$ 1 million, and that people have decided to divide it into 10,000 equal parts of it, each one worth 100 dollars. This little piece of this company is what is called a stock.

When you own a part of the company, if its valuation rises up, your stock rises up proportionally e.g.: if our imaginary company valuation jumps from one million to two million, it means that the same stock worth jumps from US$100 to US$200.

Another thing is, if the company decided to share dividends with its stockholders, you have the right to win some money, proportionally to the amount of stock you have.

Picture that, again, our imaginary company, has gained US$ 100,000 in profit, so the dividends would be shared among the 10,000 stocks, which means that each stock a person holds would make him or her gain 10 dollars.

This explanation pretty much embodies all the basics of what is a stock and may help you understand how you can use it to increase your income. The next thing to do is: How do I start investing?

Open an investment account

Know that you decided that you want to expose yourself to the stock market, it is time to open an investment account.

This is a very important decision because you can open your account in an investment fund, which means that every money you invest you be reverted in stock through a human advisor.

This is very interesting for someone who is new and/or doesn’t have enough time to dedicate to studying and understanding the market.

You have the option to open up a broker account on its own, so you can decide which stock and other market options you want to invest in. You can choose between brokerage accounts that you can find in many bank apps.

Another option is to download stock-trading apps, it is important to say that you need to research it thoroughly to make sure you are choosing a safe option.

Additional tips

Before we finish, there are two things that you need to be aware of before starting investing in stocks.

First, it is very important to understand how much pressure you can take, there are people who don’t handle the ups and downs of the market very well. So, if you are one of these people, you should choose safer options, like more experienced companies, like Disney and Apple.

Last, but not least, you need to understand this is a long-term strategy, and that you cannot win always. However, if you keep studying and preparing more and more, your win rate compensated for your losses.

That is the point you will start getting richer.

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