Letting your money sit idle is always not advisable. Money, if invested wisely, has a very good potential to grow. The Stock market is the option chosen by a lot of people to make money. Be a little careful and nothing can give you results as fast and as eminent as stock trading. If you make just a small investment every month on shares, you will not believe how big an amount it can grow into. But the main thing is to start without delay. Many people face the problem in the starting of such a regular investments, and many more face problem in continuing the investment. If you want to be successful, you will want to accomplish both – starting and continuing the investment.
Apart from stock market investing, there is one more way you can earn from the stock exchange that is through stock trade. Although more planning is required in stock trading than is required in stock investing, the former gives profits faster if wisely done. This is the reason why, in spite of some risk, there are still a good number of people earning through trading. Though it is always the real time experience that is going to help you the most when you trade stocks, following are some tips that will certainly be helpful for you to succeed in the stock market trading:
SET A GOAL HOW MUCH TO EARN
Before you start to trade stocks, make a clear goal in your mind. Don’t make a goal like “I want to earn money.” Well everyone wants that. Specify it further. How much money? Within how much time? Once you have a specific goal in your vision, you can plan the way to pursue it better. Once your goal is achieved, set new ones. THE BROKER
When you invest in stocks, it is very probable that you will need a stock broker. When selecting a broker, be careful to see that the commission rate does not look higher than what you can possibly earn from the stocks. Online stock brokers are very helpful in this respect. They provide you with quality as well as low commission rates. PLAY IT COOL
Be cool when you make decisions regarding stocks This enables you to make quality decisions using all your education and experience in your steps. Never play it led by your emotions. SET LIMITS
Due to their greed, many traders lose money on the deals they might have won. If you want to avoid this, set the upper and lower limits for the price of the stock you have. Once the price touches any of these limits, sell it immediately. Else you might lose from a deal you should have earned from. DON’T PLAY WITH LOAN MONEY
It is a sincere advice to avoid playing with borrowed money. Effective decisions in the stock exchange require a peaceful mind. If you are playing with loan money, you can never be peaceful. And it is more probable that you might lose. To compensate for the lost amount, you will borrow more money and this will make you even more disturbed. This will weaken your chances to win further. The process will go on and you will be submerged under debt. So, never trade with borrowed money. MARKET KNOWLEDGE
Gather good knowledge about the market and all the factors that you think affect the market. This will make your decisions more educated and hence more apt. To have this read the economic magazines and other financial reports. Also keep a subtle eye on the non-financial news as it may also affect the stocks.
By: Micheal James
Posts Tagged ‘How Much Money’
Make Money While Trading in the Stock Market
January 21st, 2010Financial Freedom – Run Your Money Like a Business
November 18th, 2009
If you want to be more financially secure, or even become financially free, you could learn a lot about running your money from the model that a successful business would use. If your name is Gemma Jones, think of your financial world as Gemma Jones Inc.
A successful business plans out how much money they expect to have coming in for the next year (turnover), then they work out what it’s going to cost to earn that money (cost of sale) then what it costs to run the business (overheads) and what is left is profit.
They pay tax on the profit ** then put part of that profit aside to cushion their cashflow for the forthcoming year and re-invest in the business to grow it, then the owners/shareholders draw out what is left to spend as they wish.
You are the sole shareholder in Gemma Jones Inc, unless you are working as a couple then you are Mr & Mrs Jones Inc, with a 50% shareholding each and equal voting rights on what happens with your joint money. (If not, why not? This is a whole other article!)
The business constantly looks for new opportunities to make more money and they are careful about what they spend, looking for the “return on investment” and how long that will take.
You can probably already spot some significant differences between how a successful business runs its money and what you do with yours — and those differences are what is making the difference to your financial success!
Taking that model and applying it to your finances, you can work out what you expect to earn this coming year (I suggest you look at your net earnings or what goes into your bank), what the costs of earning that money are (travel, clothes, lunches, etc) and then what the overheads of running Gemma Jones Inc are (rent, food, bills etc).
What is left is the profit the place most people fall down financially — they are simply not making enough profit!
Once they have paid the costs of going to work, running the house, then paying for all the bits and pieces that they think they need to be happy, there is just no money left for the important stuff. And this is where most people go wrong , because they are not taught to run their money like a business.
I know, because I ran my money like that for about 40 years of my life too. Even now, I know many business people who don’t run their personal money in the same way they run their business money.
If you ARE making a profit after paying for your day to day life, then ideally some should be put towards cushioning your cashflow against potential changes in the market next year (savings) and some should reinvested in growing the business (you!) and creating new income flows. Learning new skills, investing in property, starting a part-time business on the side of your day job.
Before you take any personal drawings, to have fun with, as a shareholder in your business. For example, refurbishing the office (your house), or taking the staff (you) on holiday.
Like any business, you should always be looking out for opportunities to increase cashflow and profits, because those extra earnings can be put towards buying, what we in The Money Gym call “income producing assets”. Similarly, you should always be looking for ways to cut overhead, without affecting quality and almost as important, quality of life.
Because you are your business, and you are your main asset. You need looking after.
The more of those income producing assets you can invest in and accumulate, the quicker you can become financially free, as the income from your assets outstrips what you need to live on.
And that’s the day you never have to work again, if you don’t want to.
Because you are financially free.
By: Nicola Cairncross