Interest rates are near zero and have been for years now. That means if you go to your local bank with your $1,000, $5,000, or $10,000 and put it in a CD, the bank will give you almost nothing in return for letting them borrow your money. Do you know the saying “make your money work for you”? Well, if you are only earning interest on your savings that isn’t happening!
So, What Should You Do?
The stock market offers the best opportunity for you to actually make money and grow your savings. No matter how much you have, you should challenge yourself to learn how the stock market works and begin buying stock.
I bought my first stock in my late twenties and have continued to put money in the stock market ever since.
Be mindful though, that stocks do come with risk. Stocks go up and down depending on a lot of variables so it is unlikely you will make money on every stock you buy. Long term though, if you are willing to invest the money you don’t need for years at a time, chances are you will come out on top.
Getting Started With Stocks
The objective is to buy stock in companies that are poised to do well in the future. Companies that have solid management teams, solid balance sheets, and solid fundamentals have a good chance of having their stocks go up over the long term. THOSE are the kind of companies you want to buy stock in. Please click on over and read my stock FAQ’s that will answer many of your initial questions.
Before you can buy your first stock, you must open up an online broker account. Motif Investing gives you the same services as all the higher priced brokers for just $4.95 per trade. With Motif there are no account minimums so you can start by depositing and investing any dollar amount. If you only have $1,000 to invest your #1 priority is finding a broker with a low minimum opening requirement and low trading fees so Motif is a great choice. Here is a list of some of the other options:
1)OptionsHouse – No Account minimum ($4.95 per trade)
2)TradeKing – No account minimum ($4.95 per trade)
3) Scottrade – $500 account minimum ($7.00 per trade)
4) TD Ameritrade – No account minimum ($9.99 per trade)
5) E* Trade – $500 account minimum ($9.99 per trade)
6) Schwab – $1,000 account minimum ($8.95 per trade)
You Should Think Long Term For Your Stock Investments
Don’t get sucked into the short term trading mindset that seems to be so prevalent on Wall Street today. The real way to make money buying stocks is to hold good, solid companies for years at a time. Try to find companies that should do well a year from now, five years from now, and even ten years from now. If you buy stock in that kind of company, your chances of making money are very good.
Don’t panic and sell at the first hint of your stock going down. The goal is for your stock to go up more than it goes down over months and years. If you pick good companies then that will probably happen as long as you are willing to be patient and wait. This isn’t gambling…..this is putting your money in something that should grow over time.
Remember, whether you have $1,000, $5,000, or $10,000, the most important thing is that you dive in and get started. Only then will you begin to understand how people with money make even more money from their investments.