I’ve always been interested in investing in the stock market, but I wasn’t educated on the subject to start any investment. In April 2016 I decided it was time for me to start learning the basics of the financial market. I enrolled in an academic training of 6 weeks. After this training I started to understand that what seemed to be difficult in the first place was in reality just the fancy language that Wall Street use. The language is made so only those working in the industry understand (I guess some persons use the language to fool people not used with the vocabulary).
After the training, I continued to dig into the details. I tried to predict the market performance with some success and failure. Long story short I ended up investing a few dollars. I didn’t invest any other dollar because I realized that making a huge amount of money by investing in the stock market was just an illusion unless you’re going to make it your full-time job and invest a lot of time and money.
Can you get rich investing in stocks?
Of course, many people made money, sometimes earning millions but they know it won’t happen again, it was luck. You hear a lot of people who won the jackpot, but you never hear the one who’s losing. I’ll tell you, there are much more losers than winners in this game. The market is pretty random and people are impatient. They want to make millions in a matter of days. those people never leave the market winning; it’s like the casino!
There is an article by Warren Buffet where he explains how he made 10 million out of a 40$ investment in Coca-Cola in 1919 (with the inflation it would be 542$ today). What he doesn’t underline is that Coca-Cola was not known at this time. It was some random company, and few people had 40$ to waste in an unknown company, moreover you had to wait about 90 years to make the 10 million. That’s what Grant Cardone explain in his video.
The stock market is a device for transferring money from the impatient to the patient. -Warren Buffet
I’ll be honest with you; I always thought you could get rich by investing in stocks. I defended this idea until now, but you can’t deny the reality. Most people don’t get rich by investing in stocks. In fact, people lose money. Why is Warren Buffet making tons of money then? Well, because he’s playing the long game. He’s patient. When he invests in a company, he’s expecting a return in 10-20 years. Most people expect a return within months. Fast money is not a reality. If you want to play the long game, then you might consider investing in stocks. Otherwise, don’t.
What about traders?
Right, traders make a living trading. It’s their job. They are not investing; they are actually working. It takes a lot of effort to learn the market. It takes time, a lot of time and a lot of money. Furthermore, they work with all sorts of commodities, not only stocks. It’s not easy. You have to make the difference between a trader and someone who’s got a job and want to invest in the stocks. It’s different. As I said before, the market is pretty random, and you’re not going to make millions by “throwing” money in stocks and wait for it to grow. If your dream is to be a trader and you want to go through the hassle, then you’re free to do it. For me, it is not worth it.
Where to invest then?
You have several options regarding better alternatives to the stock market. I’m not going to list them all in this post. In case you wonder, gold is not a good investment. Investing in gold is insurance in case the worst happens; you can do it but it is not going to make you rich. Now let’s focus on some of the best investment that can be done.
- Real Estate: Investing in real estate provide you a real asset. Something that will provide you a revenue stream every month. It makes you more money than any other stocks. Of course, this is not something easy; you have to invest time to learn the industry, the regulation and more. Is it worth it? For sure. Once you have all the knowledge needed, you can start investing in real estate. You don’t need a lot of money to start investing, but we’ll talk about that in another post later. For this kind of investment, you can start with $10k to $20k
- Save money to build your company: You can save some money to start your own business. You don’t have to create the next Facebook. Create a small business that will generate a significant amount of money. Something simple. Don’t want to quit your job? You don’t have to. Anyone can create a side business that will require few hours per week. You can start this with $1K or even less, depending on what’s your business.
- Invest in an early startup: I like this one, but not everyone can do it. To invest in an early startup, you have to be close to the entrepreneurial world. You have to be known as an investor. Unless the company is public, you can’t just show up and invest in anyone. For instance, not everyone was able to invest in Uber in its early stage. If you want to take this path, you have to be credible. If you can get into such private investment, good for you. Depending on what stage is the startup, you’ll need at least $20k to $30k to start. With $25k invested in Uber, you would have a few hundred million.
Keep in mind that whether you invest in real estate or anything else, there is always a risk. The key here is to know which industry interests you most, what is your knowledge and please have patience. Don’t try to make fast money otherwise you’ll lose money. This applies to all industry.
Finally, if you really want to invest but you don’t know what you’re doing. Don’t do anything. Save your money and wait for the right opportunity.