When people think of investing, they first say it is risky. If it’s too risky, why are people all over the world doing it? Yes – it’s risky, but if you know how to make it less risky, you can make a lot of money and at best you can quit your 9-5 jobs. I have worked in many places and I don’t like working. My only goal in life is to get financial freedom and leave work (it’s only when I don’t like this job).
If you know what compound interest means, this is the answer. Time is an investor’s best friend – it means that the more years you have invested, the more you earn.
Let’s make an example here:
Tom and Paul both want to leave work. They both have the same salary, but Tom started investing 2 years before Paul. And both can invest every month $50.
In 30 years, Tom’s portfolio is about $ 68,000 and Paul’s $ 57,000. And this is why you should start today. In the real world, yields can be much higher and different. The return on my portfolio was negative in 2019. I don’t know how much because I took the money out and I don’t remember those numbers. In 2020, my portfolio grew by about 20% and this year by about 61%.
How I was able to earn 61%?
I made an investment with a return of over 300%. And it wasn’t GME, Bitcoin, Dogecoin or AMC and so on. This was done in the start-up sector and I invested in Change Invest. If it went up 100%, I wrote about it here. Change Invest is a platform where you can buy some CFDs and some cryptocurrencies. They have low commission and trading Bitcoin is totally free. Check this by yourself – here.
Let’s move on with main topic
If I motivated you to start with investing – now you ask – how? I wrote about it here. Investing is easy, this is not a hard thing to do. I think working 9-5 is hard, but investing is not that hard.
Think of it this way. If you don’t want to be a trader or a swing trader, this is one of the easiest things. You just have to figure out your strategy: whether you want to earn dividends or you want to grow your portfolio with growth stocks, or you want to earn interest on loans, or you can buy a rental house.
If you want to build your portfolio of dividend stocks, buy those stocks that pay dividends during the recession. This will help you to earn a passive income. If they don’t pay dividends during the recession and dividends are your main source of income, it’s really bad.
If you want to build your growth stock portfolio then remember one thing – DIVERSIFY! Growth stock is risky and you can lose your money. Yes you can hold it maybe it will start to rise again. Growth stocks usually won’t pay dividend and this mean, only way to earn money with these is to sell them. But selling growth stocks is also risky – you sell and it rises and you didn’t earn that growth. Another risk is buying too late – you buy it because it has had a nice rise lately and is now falling back to normal.
In the bottom line
Investing is easy – few clicks and you own a share. But starting with investing is usually hard because people think about risk. Yes there are risk, but if you know how then this risk is low and risk depends only on you. If you invest in Bitcoin then the chances of losing money is higher than investing in Vanguard funds. If you want to make money and grow your portfolio, first learn how to walk and then run.
Successful investing is about managing risk, not avoiding it.Benjamin Graham