Most people do want to secure their future. However, not everyone may have the right knowledge on how or where to begin. Putting up a business may seem to be the easiest way to start building funds, however, there are also some people who would consider investing their money on something else, like buying shares of stocks.
While there are great opportunities out there to increase your financial threshold through stocks, horrific stories about people being scammed by others may be brought about by not having full knowledge of how stocks really work. There may be no such thing as an easy money, but if you know where to place your money correctly, then you are sure that you get more than what you have invested in.
What are stocks?
In simplest terms, buying a stock means that you are buying a piece of a certain company. The company usually does this through an initial public offering or IPO. This is the price of shares which is set that is based on how much the company is estimated to be worth, as well as the number of shared being issued. The company secures the money and uses it to help grow their business, and at the same time, the shares of stocks continue to trade on an exchange. Both the traders and investors continue with the buying and selling of the stocks of the company, but the company itself no longer receives any money from this type of trading.
What Determines the Price of a Stock?
The price of a stock can either go up or down. The price changes signify the supply and demand. So, when a stock is deemed to be desirable for whatever reason, then this makes the prices go up.
What are the advantages of investing in stocks?
The stock market remains to be among the many potential places to invest your money. This may entail some level of risks. However, you should know how to play your card well in order to take advantage of the stock market and secure your financial position and help yourself earn more money from it.
The primary advantage of investing in the stock market is the opportunity to grow your money. After some time, the stock market tends to increase in value, although it is a normal occurrence that the prices of individual stocks rise and fall regularly. Therefore, it is wise to invest in stable companies rather than risk your hard-earned money on unknown entities.
You may have heard from the news how there had been so many people who fall prey to such schemes- offering them a huge money in return after just a month or so. For the first-time investors, they may be given the promised amount after a month, and in the succeeding months, the person who has encouraged them to invest will no longer be sending them any money or would have totally cut their communications with them. This type of investing is common, particularly victimizing vulnerable individuals who would want “easy money”. The only way that you can legitimately increase your money is by investing in legitimate companies.
There is another form of stocks that can provide you with an income, this is called the dividend. Dividend income is delivered annually to investors. These payments are guaranteed to arrive even if the stocks have lost its value. Through dividend income, it can help fund a retirement or you may also use it to start with other investment opportunities.
With your growing investment, you do not only allow yourself to increase your money, you may also use it for various purposes such as:
- Start a business or to expand your existing business,
- reach your financial goals. You may be eyeing on purchasing a new home, or a car, or to travel.
- Support other people in need. There are some investors who are willing to share their blessings to support a foundation or just a few people with regards to continuing their education or in starting up a business.
- Initiate a new venture. You may earn a huge profit from your investment that you may start venturing into something new like real estate.
Facing the Risks of Investment
It is unlikely not to face any kind of risk when it concerns money. Is it worth the risk? The risk may be a lot higher when you are not fully aware of what you are getting yourself into. You don’t need to be in a hurry to earn that much. Search for the right people to help you get started. Eye on the most possible high returns by carefully choosing the company to place your money in.
You need to have both your eyes widely open when investing in the stock market. When you are too blinded by the huge potential returns or petrified by the thought of a massive financial loss, you may not be able to come up with a good decision. You can only blame yourself for your wrong decisions, not the black market.
When Is The Right Time To Invest
Any investment planner would advice you that there is no other right time to invest, but NOW. However this may be true, still, it is up to the individual to weigh down things on their present financial capacity. What I mean is, if you are earning just enough for the needs of the family, now may not be the right time as of yet. Probably, you need to start earning more where you can set aside your extra money and place it in an investment.
Personally, I really do think that placing your money in stocks can be truly a worthwhile cause particularly if you choose to play it with the right companies. One thing that you should be aware of: THERE ARE A LOT OF PEOPLE THAT TAKE ADVANTAGE OF OTHERS WHO ARE UNAWARE HOW EARNING THROUGH STOCKS WORK. And instead of you being scammed by these con artists, be sure that you very well know the people you are dealing with, as well as all your transactions are done in a legal manner.
Remember how Jay Penaflor, the ex-PSE employee scammed so many people a few years back and stole millions of pesos and just got away with it? This type of person would easily lure individuals who wants to earn easy money. Come on! When something is easily earned, it goes away that easy, too.
What this person did was promised the investors that they will earn a certain amount (depending on how much they have invested). For a few months, the poor expecting investors were given their “profit”. And so, they were made to believe that the transaction was authentic. But a few months after, Penaflor was no longer sending their supposed profit. Easy come, easy go! All the money that was invested by these people has never been returned.
If you want to earn money, specifically for building funds for the future, you should always be wise. Know the factors that is needed in choosing the right investment:
- Determine if it is the best time for you to invest. Know your financial capacity and ensure that your immediate needs are met and not cut short by choosing to place part of it for an investment.
- Determine how soon would you need your money. Are you investing for just a short-time basis because you are planning to buy something in the near future or would you rather keep your money in an investment for a long time?
- The younger you are, the larger is the outcome of your investment. Additionally, while you are young, you are able to look into other opportunities where you can earn more and that it is easier for you to pick yourself up in case of any mistakes that you have come across with. Also, it allows your money to grow bigger through compound interest.
- Risk tolerance. The higher the risk on an investment means higher returns. Example, a bank offers 5% interest when you invest Php5M with them which should be on hold for 5 years. The amount of money that you earn when the term ends is absolutely bigger than ordinary savings account. But, do you have enough money left for your immediate needs?
Stocks investments and other forms of investments can help secure your future. You just always need to be sure that you are fully aware of what you are getting yourself into and that you should only deal business with legitimate individuals.
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Jenny Alano
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