how to invest money in stocks and make it grow?

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How to invest money? The best ways to invest and make your money grow.

Discover the best ways to invest your money and make it grow so as to attain financial freedom

Let’s first define what investing is:

Investing refers to putting part of your residual income (saving) into productive enterprise that will bring in positive return in the nearby future

Also investing refers to the act of committing money or capital to an endeavour with expectation of obtaining profit

Why do you need to invest?

  • Investing is the only way you will grow your wealthy, it will help your money to earn interest
  • It will help your money grow, your money will start to accumulate, the more you invest, the higher the returns you will get

When is the right time to start investing?

The best time to invest is today, it is better to start now than to wait for the future time because money has several risks.

Investment is all about taking risk so as to earn more in future

Where should you invest $100-$1,000?

  • M1 Finance starting at $100
  • Stocks
  • Mutual funds
  • Etrade
  • TDAmeritrade
  • Real estate
  • Fundrise starting at $500
  • Aspiration plus
  • Diversyfund starting at $500
  • eToro
  • blooom
  • chime
  • Roofstock
  • Lending club
  • Betterment requires less than $100
  • Wealthfront
  • Robinhood
  •  

Where should you invest money?

  • Stocks
  • Real estate
  • Mutual funds
  • Bank deposit account
  • Emergency fund
  • Brokerage account
  • bonds

Types of investors

  • online brokers e.g Charles schwab or fidelity
  • robo-advisor e.g betterment
  •  

What we have included in this post?

  • How to invest money to make money?
  • How can I invest $100?
  • Best investment for beginners
  • How can I start investing with little money?
  • How to invest money in your 20s?
  • Best short term investments
  •  

Stock investing, How to invest in stocks the best way?   

Stock investing is easier to get started than you imagine, in this post you will discover the best way to invest in stocks

Stocks produce greater returns in the long run compared to savings, since 1926 there has been a growth in average annual return of more than 10%, stock investment involves risks compared to all other investments.

Stocks refers to purchasing a share from a company and you earn dividends, prices of stocks usually go up and down depending on its demand and supply,

It offers you with a great opportunity to build wealth over time

Investors like warren Buffet became rich due to investing in stocks, all you have to do is to purchase stocks at a low price and sell them in the market when prices go high

When investors expect the company to perform more in future, stock prices go high due to increased demand. The reward for investing in stock is dividends.

Stocks are sold in major stock markets.

Reasons for investing in stocks

  1. Stocks produce greater returns, the growth in dividends is very high compared to profits obtained from other sectors
  2. High profit growth
  3. Greater income value after maturity
  4. Value creation

Best ways to buy stocks.

  1. Research about the company selling shares, know the company reputation, examine the trend of progress, you can use available data to see whether the company has been paying share holder dividends or not, always make informed decisions.
  2. Growth and value, invest in stocks that have higher possibilities of growth, 
  3. Earnings per share, choose companies that have a positive trend in earnings and growth and habit of reinvesting the earned dividends into the investment portfolio. Always check for annual financial statement of companies.
  4. Price earnings ratio, choose companies that have lower Price per earning ratio in the industry, its desirable to invest in companies that gives you a chance to reinvest re invest the earned dividends.

Lower P/E ratios shows good value in that stock investment.

  • Dividend yield, This is the company dividends expressed as a percentage of the share price, choose dividends that will help you generate income, an increase in dividends shows that a company is doing well in the market.
  • Book value, this is the difference between the company’s assets and liabilities, most investors look at book value per share.
  • Return on equity,  choose for a return on equity of over 15%

Steps to consider while investing in stocks

  • Decide where to invest
  • Open up an investment account
  • Set your budget
  • Decide whether your investing short term or long term
  • Manage your portfolio

Where to get facts about companies?

  1. Company website
  2. Company annual report
  3. Company financial statement
  4. Investment surveys
  5. Directory of dividend reinvestment plans

When should you sell stocks?

This is very important because it determines the size of your dividends, don’t be forced to sell your stock every time prices go high, stock prices always go up and down. Higher dividends will be obtained in a long run if your patient, do not rush to sell.

Always do research in the market to see whether stock prices are exhibiting up word trend or downward trend.

Sell when you have reached your target price, most investors set prices at which they are willing to sell their stocks, and the best target can be when the prices double or triple your initial investment.

Always monitor the stock price trends, how prices are changing up and down

What do you need to start investing in stocks?

  • Computer, smart phone and internet connection

Mistakes investors make in stock investing.

  • Relying on tips, sometimes these stock investing tips can be misleading.
  • Getting used to stock investing after accumulating lots of stocks, always follow trends in the market
  • Putting all your eggs in one basket, you need to diversify your stock investing portfolio, this helps you to compensate in case there is a loss in one stock
  • Forgetting taxes and commissions, always consider the taxes that will be deducted on your dividends before selling.
  • Being inpatient, decide once to make an investment choice in one turn, don’t worry if prices go down, prices can go down and in one day rise up drastically, keep monitoring the movement and don’t panic.

Conclusions stocks offers the best opportunity for long-term gains, so please decide on your investment portfolio.

Terms used in stock investing.

  1. Dividends, share of company earnings paid out to share holders
  2. Compound interest, interest paid on interest
  3. Bear market, period when stock market is in decline
  4. Bull market, a period when stock market is in general increase
  5. Bond, interest bearing that obligates the issuer to pay a specified amount of interest after a given period
  6. Diversification, balancing risks in different investment portfolios
  7. Portfolio, collection of all your investment
  8. Return, measure of investment performance
  9. Risk, possibility of losing money

Where can you buy stocks?

  • M1finance
  • TD Ameri trade
  • Sofi active investing
  •  

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