I hear these two statements put together all the time: “I don’t know how to invest in the stock market and I’m not wealthy.” They’re actually two different concepts that have nothing to do with one another.
For one thing, wealth is subjective. To one person, true wealth might mean a net worth of seven or eight figures, while to someone else, wealth is six months of living expenses in savings. You can’t quantify wealth in any meaningful way until you know what it means to you.
For another, knowing how to invest in the stock market can make you wealthy — no matter your definition of the word. The idea that you have to be rich to get richer is antiquated and false.
Many people start their investment accounts with $1,000 or less. You’ll find online brokers who allow you to start your brokerage account with as little as $500 as long as it’s a cash account. You’ll need more money — perhaps $25,000 — if you want to trade on margin, but that’s another article entirely.
So how do you invest in the stock market when you’re not wealthy?
Learning How to Invest in the Stock Market Doesn’t Require Wealth
The true key to learning how to invest in the stock market isn’t having a large investment account. It’s knowing which stocks to buy now. If you’re beginning your account with a small sum, you can grow it exponentially over time as long as you’re confident in your entry and exit points.
Your entry point is the price at which you buy a certain number of shares in a given stock. The exit point is the price at which you sell those same stocks.
If you sell your shares at a higher price point than the one at which you bought them, you make money. There’s no such thing as a guarantee, but if you pay attention to my publications and invest some time in learning how to invest in the stock market, you might discover that you win far more than you lose.
Refining those entry and exit points will allow you to trade small positions, then grow your positions over time. The greater the position, the more shares you buy and sell.
Learning How to Invest in the Stock Market Does Require Knowledge
Too many people jump on a trading platform, pick stocks that “look good,” and invest their money. That’s not a winning strategy, especially if you have no experience.
Learning how to invest in the stock market is a long-term game. You have to understand chart patterns, financial reports, and other technical and fundamental aspects of trading.
There’s a shortcut, however. You can gain knowledge from people like me who have been trading in the stock market for years. While you should still learn as much as you can about investing, you don’t have to wait until you have the equivalent of a master’s degree in economics.
My publications allow people who aren’t wealthy and who don’t have any investment experience to start profiting right away. They can take my stock market tips, refine their entry and exit points, and reduce their risk while maximizing their potential gains.
You Can Benefit From Knowing Which Stocks to Buy Now to Grow Your Net Worth Steadily
Can you get rich off the stock market overnight? Probably not, especially if you’re starting with a small trading account. Focus on growing your net worth steadily instead. As long as you’re profiting instead of losing money, you’re heading in the right direction.
Thousands of stocks exist. If you don’t have any experience, you’ll likely feel overwhelmed just watching CNBC. Furthermore, if you try investing in the so-called “foolproof” companies, you might get frustrated because your investment account doesn’t grow fast enough.
Steadily doesn’t necessarily mean that you have to wait years for your profits to multiply. It just means that you have to be patient in the beginning as you learn how to invest in the stock market. My publications give you a jumping-off point to help you feel more comfortable in your investments.
Your Initial Investment Serves as the Starting Point
Think about a traditional savings account. It doesn’t usually start with thousands of dollars. You might open an account with $100 or $1,000. Your goal is to add to it over the years so it creates a financial safety cushion.
The same thing goes for the stock market, except that your goal is to grow your wealth rather than save money. It starts with a small account. As you make good investment decisions, the amount grows.
The same concept applies to a traditional retirement account, such as a 401(k) or an IRA. You and your employer contribute money to the account on an ongoing basis. Based on the investments made, your account grows over time.
That’s how I recommend viewing your journey as you learn how to invest in the stock market. You don’t need to be wealthy. You just need to be willing to gradually grow your net worth as you make smart investment decisions.
An Initial Investment Shouldn’t Put You at Financial Risk
There’s a little caveat here. I’m not advising you to put everything you own into the stock market. If you’re living paycheck-to-paycheck and struggling to pay the bills, you don’t want to put yourself at financial risk by dumping your next paycheck into the stock market.
Remember, there’s no such thing as a foolproof investment. I tell my subscribers which stocks to buy now based on my expertise and forecast, but I’m not always right. You have to manage your risk effectively.
Instead, start putting away money for future investment purposes. Once you’ve accumulated enough money to open an investment account, you can begin trading without putting you or your family at risk. By cutting back on non-essential purchases right now, you invest in your ability to capitalize on the stock market in the near future.
Listening to Fraudulent Promoters Can Put You at Risk
If you’re getting your information from the wrong source, you could put your initial investment in jeopardy. There are lots of fraudulent promoters out there who blast certain stocks on social media or other platforms to “pump up” a stock’s value artificially. The only ones who profit are the company and the promoter.
Do your homework when learning how to invest in the stock market. Put your trust in people who have the education, experience, and track record necessary to guide you in the right direction. When you’re not wealthy, you have to guard your financial resources.
Relying on a Consistent Source of Stock Information Can Help You Grow Faster
The stock market moves really quickly. It might not seem that way if you watch CNBC, but individual stocks can shoot up or down at a moment’s notice. That’s why you don’t just need a reliable source of information on the best stocks to buy now, but also a consistent one.
I’ve put together my newsletters with this knowledge in mind. You can trust that, when the time my newsletter comes out, you’ll get it. And if I have a tip that can’t wait, I’ll send it out off-schedule so you can benefit from it.
Once You Profit From the Stock Market, Invest Those Profits
It’s hard to see how you can learn how to invest in the stock market when you’re not wealthy if you constantly think in terms of your initial investment. Let’s say you start out with $500. Over a few months, you invest that $500 and profit $500. Now, you have $1,000 in your investment account.
You can continue trading with the $1,000, then grow it from there, or you can withdraw $500. At this point, you’re investing solely with profits. You have the initial investment back in your checking or savings account where you got it.
Viewed this way, investing in the stock market becomes far less scary. You can invest with profits alone to maintain your risk tolerance.
Learning how to invest in the stock market might be one of the most important goals you pursue. When you’re confident in your trades and able to see your money work hard for you in the stock market, you become more confident — and more wealthy.
If you’re interested in learning which stocks to buy now, subscribe to Weekly Money Call. It’s a newsletter that provides you with my best stock advice every Monday at noon. You’ll look forward to those calls every week because each one is an opportunity to profit and grow your net worth.