How exactly do people make money off of stocks?
Image source google
Image source google
Image source google
regards @yogagayo
I know you can sell stocks you own but are there other ways of making money off of stocks? If so, what are they? I’m no expert so I appreciate it if you could keep it simple.
There are many ways to make money from stocks. But what matters most is what you want beyond “making money” which is a desire not a goal.
Goals are: Retirement, a Vacation of a lifetime, a new home, that impossibly expensive wedding your child dreams of, College Education, financial security, trading as a business etc.
Then, once you have your goals, and there should be more than one, then you can determine if you should invest in: index funds, ETFs, or ETPs, individual stocks, dividend stocks, REITs, or whatever.
The stock market has just about any asset you might wish to invest in as a derivative version of that asset.
Real Estate is expensive with a huge down payment. REITs are a derivative of the Real Estate Industry and provide income for investors.
Commodities are a specialty investment and often not truly useful to an individual based on the risk factors. There are ETC Exchange Traded Commodities for just about any commodity you wish to invest or trade.
Some companies offer dividends which are income generating investments.
You can invest directly in bonds OR you can invest in ETF Bonds or ETN which is an Exchange Traded Note aka bond. These are usually consider income generation. ETFs make if far easier to buy and sell an index of bonds easily and simply via the stock market. ETF Bonds trade just like a stock. Put in your buy or sell order and you are quickly executed.
There are also ETFs for anyone who wishes to buy into Utilities, Municipalities, etc.
There are young IPOs with amazing new displacement technologies that will become the next generation of big blue chip companies. The hold time is 10 -15 or more years and the gains are staggering. Consider that AAPL was a mere $19.23 when I wrote about its potential as a come-back stock in 2003. If you had held though to 2021 and the splits etc, you would have a huge ROI at this time. This type of investing requires more education and not recommendation services. If you find these great companies that are new or reinventing, the hold is long but the ROI is massive.
You can trade cryptocurrencies, bitcoin with an ETF now.
There is also Trading as a Business which is an IRS ruling that retail traders can use the benefits of self employment or have a Sub S corporation or an LLC or partnership and have the same rules and deductions and benefits of professional independent traders.
With a proper education (not You Tube videos) a Trading as a Business status can be a career change, a part-time job, or extra income for a stay at home parent.
Plus in this decade, there will be un-fungible and fungibleassets, tokenization, and many new assets to trade or invest.
You can invest in just about anything via the stock market these days and more and more derivatives are being created every day.
Think if the NEW Stock Market, which it is now, of the One Stop Investing or Trading Center of your financial universe. You don’t need to go to various different financial markets. The stock market has just about everything you could possible want to use to “make money”.
Start with goals. Then work on what type of investment is best suited to that goal.