ne of the best ways of and you realize that it is a job
generating a passive stream as opposed to a hobby, then
of income is by trading on you’ll find yourself far ahead of
the stock market. The allure and the pack.
mystique of stock investing keeps
The first step is to sit down
many new investors from taking with a blank piece of paper and
the plunge. This is unfortunate. define your goals. Be as critical
Many people start a small as you can. Write down where you
investment businesses that start are now, including your debts.
building wealth instantly. Calculate how much money you
There is no real trick. There is spend in a year on interest. Take
no secrets. It is just a matter a good look. If the average
of mathematics. If you can follow American paid down their credit
patterns, are artistic, or are card and overdraft debts they
good at organizing then you could generate more than $5000 a
should be able to follow the year in saved income.
patterns and make money
Next, ask yourself where you
investing. Yes, there are want to be in 10 and 20 years.
pitfalls the uninitiated will Each of these charts should be on
fall in. And yes, those who do their own page. Do not try to
not follow the proven formulas, combine them.
and do their homework, will end
The trick is to do this when
up losing money. But, this does you are not under pressure or
not need to be the case.
stressed.
The Investor
Now, create a 10 and 20 year
The word investing means projection of the ‘lowest’ stage
‘managing your resources so you you want to be. This is the bare
can preserve your buying power minimum lifestyle you want to be.
and generate income.’ One you Once you have this you can
decide to ‘work’ as an investor, calculate the maximum and the
minimum you need to earn each money.’ They may decide to drive
year. their car one more year before
Most people reach this stage trading it in. The investor might
and quit. The amount looks decide to avoid luxuries for two
impossible. They may need an or three years to ‘build their
extra $20 000 a year, or more to portfolio.’
reach their goals. But, remember
This exercise has another
that investing builds like a benefit. It will teach the
snowball. For argument sake, mindset followed by stock brokers
let’s say the new investor may and help new investors choose
start with $5000 and turn it into stocks like a pro.
$8000 in the first year. But they
The Investment Broker
will earn $12000 in the second
The next step is to determine
year. That will turn into $20 what type of investments fit your
000, $30 000, $50 000. Within ten goals.
years the investor may have a
High risk investments can earn
half million dollar portfolio money fast, but it can also lose
that generates far more than they money.
ever dreamed.
How long will it take you to
Most new investors skip this recover the loss? Some investors
step. It has nothing to do with are good with investing for 5 –
investing.
10 years and patiently waiting to
They want to start trading sell. Others cannot handle the
‘right now.’ This is a mistake. suspense. They want to see the
The charts above will give you an ‘fruits of their labors’ grow
idea of the risk level you need almost weekly.
to take. Each time you make a
The risk and recovery period
purchase you will stop and ask will play a significant roll in
yourself ‘is a vacation the best the stocks chosen. Today’s
long-term investment for my investors are also starting to
take a social and environmental 10px;" valign="top"
look at their investments. align="center">
Once you have a good idea
which types of stocks you want, it is time to find a broker. The type="text/javascript">
About the Author:
Mark Walters is a third generation entrepreneur and author. He offers free training and investing videos designed to speed you towards financial independence at http://www.CashFlowInstitute.com
