I use to tell my friends that I have never seen a truly wealthy man, the billionaires, who does not have one or two things to do with the stock market.
They will bluff me off, as if that simple observation doesn’t matter.
I don’t know how anybody serious about savings and investments, and about growing true wealth could avoid the stock market.
Most of the savings you do: the personal savings you have in the banks, insurance premiums, retirement savings etc, are invested in the stock market, buying company stocks or bonds or investing in government bonds.
So why don’t you learn to invest in the stock market yourself.
It’s incredible what you can achieve financially when you master this act of investing.
Take for instance UBA or Apple. These companies are mammoth companies which usually are owned and controlled by the wealthy.
But you, yes you, can own a piece of them if you want to.
This is one of the greatest benefits of the stock market. It makes available some piece of these companies so that everyone, even the lay man on the street, can reap from their growth.
But too many people are going to the stock market with the wrong mindset.
They hear stories of people who became wealthy all of a sudden investing in the market and want to jump into the bandwagon, they wait patiently to hear when the market is rising again.
And when it start rising, they want to put every kobo they have. They do this even without having learned anything about the market.
All they know is that the market is where you can put money and if you are lucky, it will grow.
It is this, the-wait-and see-when-it-is-rising attitude, the insatiable greed, that have ended up frustrating people and made them believe that the market is no good. That it is a place for pure lunatics.
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The Mindset You Should Have When You Want to Invest in the Stock Market.
Here is it.
You are going there to buy a business.
And to be honest, that is all there is, every other thing is a scam.
Ok, I’m now a bit emotional. Let’s just say that scam is not the right word and investing in business is not the only thing happening in the stock market. But going to buy a business is the most important thing.
This – going to the stock market to buy a business – might seem insignificant, not too big a thing to write about, but I have seen a lot of people wanting to buy shares with some terrible mindset.
They go there to become wealthy overnight.
It is all the market is for them – overnight wealth.
Once they invest, they are instantly obsessed with the charts and graphs. They check it daily, every twelve hours, every hour to know how wealthy they have become.
They pore over the charts and graphs even when the market is closed. And after a month or two, if the stocks have not doubled, they will sell it off.
It’s theatrical investing that way. Stock market is about businesses and when you invest in a business, you must allow enough time.
You don’t invest as if you are putting money in a lottery, you are not gambling. You are investing. There’s a difference.
Those obsession with inordinate charts and graphs are exhausting. Some people call it technical analysis. It does not do any good.
Invest in companies you understand and even if the share prices are not rising immediately, be patient with it. Some of these companies even if their share prices are not rising are still paying dividends every year, some even twice a year.
It’s a good sign that they are performing and some circumstances in the country is stalling their share prices. These things are beyond your control.
The fact that you are receiving dividends means that you are getting returns on your investment.
Stock market is not gambling.
When you gamble, you don’t know what will happen. You only hope and pray to be lucky. When you use that mindset in investing, it is a sure path to disaster.
Go to the stock market with the mindset of one investing in businesses. You are investing in those big businesses you see everyday, the ones you see their products and services, the products and services you use. You invest in them because you want to be part of their success story.
When they grow, your wealth grows too.