Have you encountered some people who is very obsessed with money? If yes, then you may have seen the way of thinking they did. That is one big problem if you want to do a business or some money-related management and that includes Trading. Today we are going to change the way you look to money and will make you more successful in trading world.
Money is really essential in these days, I mean… of course it is, because you need money in order to do living. But, one point that is really important for you to look into is How you think of money. Most people have an addiction towards money, they will do anything to obtain money and they are too afraid to lose them. This is really dangerous if you are working that depends on money or very big amount of money. Like trading for examples, think about it, if you buy a $50 bucks worth of shares from one company and then suddenly the value of that shares on market rises and made you happy, then you took all of it and buy more from just that company. And suddenly, that company crumbles down which makes the market value went down pretty deep. Now imagine, what will you do if that happened?
If you think that you will go crazy and never do that again then you must change the way you look into money in trading world. Try to think them as “Worker” not “Treasure”, if you lose too much then you could just make again but if you lose Treasure then you can’t make again because you just stressed out from losing them. That way of thinking will reduce the chance of you making the mistakes in trading. But, that is not the only point in order for you to avoid miss or failure. Another point is to not spend too much on just one platform. For example:
One day, person a decided to put $100 just on company a and person b will put $100 to company a, b, c. One month later after they purchased the shares, they want to check whether the price went up or went down. Surprisingly, company a market value went down and person a lost all of his money, but person b did not lose any, in fact he got his profit. How? Person a spent ALL of his money into just 1 platform which is company a but person b did not spend all of his money just to company a, he share his money to company a, b, c even if company the prices went down he have 2 other companies which is b and c that will probably has a good situation. If all of the company stock prices went down, then you have to look into the first thing, which is to see money as worker.
If you see money as worker, you won’t spend much money to invest. Because the more worker you take, the less profit you will obtain. Don’t be blinded by money and always remember to not just stand still to one platform, or it could become a land mine for you.
Stock market is a big system of organized money-making company. The money is moved around every day for transaction in economical market. Stock market has a total of $71.6 Trillion traded each year, it is worth more than any market goods in the entire world market! But stock market is not selling goods or service, but they are selling the right of the company or most commonly called shares. Buying shares also means you are buying a part of that company.How does the shares exactly work?
Many factors could affect the shares performance, for example the company called “a” which sells hotdog to the market are getting good reputation form buyer, which will automatically rise the company share selling rate. But you must buy the shares when the stock price is low. And sell it when the market stock is high. So, if the company’s share price is high, you must wait and buy the share when the price is a bit lower. But there is a special case when a company performance is very good and promising, you must buy it at the moment you see it before it is too late. If you buy it later on, the price will explode and you can’t afford it anymore. And there is another case where a small company sell it low priced shares, but the buyer statistic was so high because they see the opportunities behind the company, or a great potential growing behind the company. The company’s share will be raising as the result. So, if the company real market selling is low, they can still gain profit from selling shares. If the company is lucky enough they can become large. But if the company is not lucky enough, they will end in debt.What is the benefit of the company from selling shares?
The company which sells share to trader are most likely wanting to raise fund from selling the share to the share trader. Or the money they gain from share will be used for getting more staff, making more workspace, advertising the company, or even invest more so they could make more money from it. This kind of system Is beneficial to each side because of the larger the company makes, the larger your money will return. Facebook is one of a successful share seller, they successfully sell their shares for net worth of $16 billion. A company is better selling a share for more growth, but it also is a risk.What to prepare in order to start investing?
First, you need to throw away your desires over money, because money is just a worker when you invest. Investing in the stock is a big game of betting. There is no absolute guess over the share performance. But when the company which sells the share are growing you will win the game. When your investment result in a failure you must have a good mental to take it, that’s why we said you need to throw your ambition form money. Because investing is risky.
Second, you need an enough starting money. For example you could store $100 every week onto your trading platform so it will become $400 every month. That is a good starting money for your investing business.
Third, Don’t spend all the money on one base. This is the most important thing on investing. If you spend all of the money over 1 company, the risk is so high because its 10/10 chance of failure when the company drop. But if you spend the $400 on 4 companies, the chance becomes 2,5/10 chance of investing failure. Start off with a not-too-big company, you must have the skill to determine if the company is good or not.
And last is don’t expect the money back in a short time. Like we have said in the top, money is nothing than a worker. If you want the money back in a short time, then don’t invest. Because investing really needs patients.
When you have profit, don’t spend all of it on your real life. Instead use 50% of it to invest more, that way is more effective to gain money. Don’t forget, money is nothing than worker. That’s all for today’s topic, we really hope you can be a successful investor in the future.