In the last edition of the Broke Boi series, we discussed budgeting to save your coins. But what if those coins could make you a bag? Cue Broke Boi Stocks.
You’ve heard it a billion times, the stock market is where the money is at. You’ve probably even promised yourself that you’d look into investing in stocks.
But it’s just so overwhelming and seems so complicated. Well fear not, this is your 2020 beginner’s guide to making bread off stocks.
What are stocks and how do they make money?
When you buy a stock of any given company, you basically are part owner of that company. Now, granted with very little stock in a company you have very little control or say in what that company does.
But still, you get a say during big decisions like hiring certain people for positions. How? Well, your vote will adhere to the outcome based on your amount of stock.
But how do stocks turn into a bag?
Well you buy a stock at a certain price point and that stock price could go up or down based on many reasons (new products, successful PR campaigns, changes in resources available, public perception of the company.)
Your goal is to hold onto those stocks for as long as possible and sell them when they are at higher market value than when you bought them.
Of course, here’s where the risks come in. If you wait too long and the stock falls then you might lose out on money. If you sell too early and that stock you sold is now worth way more you’ve lost out on that value. So you want to make as educated a decision as possible to cash out.
So here’s how to get started.
How to start making a bag
1. Use a no-nonsense stock app
Using a stock app that lets you buy and sell shares/stocks is the way to go.
In the past, people used stockbrokers to handle their finances in the stock market but not everyone has the time or funds for that. The tech industry was made for everyday convenience so why not let an app do the heavy lifting?
Apps like Robinhood that I’ve mentioned in previous Broke Boi articles will basically allow you to buy and sell stock online through their interface.
The platform also provides recommendations from industry professionals on whether to hold/sell/buy shares at any given time for any given stock. Use this invite code at a chance to win your first stock for free.
2. Pick a Few stocks to watch
The best way to start with buying stocks is by watching how stocks change in value over time.
With either the default stock tracker on your iPhone or your actual stock app, check up on how stocks of your fave companies stack up over time.
Most sage stocks rise steadily over time and you can check this easily through Robinhood’s interface by changes throughout a given day, the past week, month, year or even 5 years.
Also, consider whether you are looking to invest for a long period of time or a short period of time.
I always recommend thinking in the long term because you can choose far more stable stocks to make your return higher. But if you really want a quick bag, you’ll need to take some risk.
3. Invest slowly
For long term growth, choose companies that are always around and constantly used. For example Visa, or Disney, Apple or even UPS. Of course, these companies have higher value stocks so 1 share is over $100 but you know you’ll be pretty much safe investing in them.
You can also invest incoming stocks for companies in the cannabis industry. Their stock will be more affordable along with some risk, which could be worth it.
Either way, start with one share and see how it goes. After you get used to checking the ups and downs of the stock and notice trends feel free to invest more.
4. Consider stock options at your job
Some jobs have access to stock options for the company. Ask if your company has an employee stock purchase program.
Most programs will provide a discount to buy the company’s stock in order to encourage employee investment.
A lot of companies will also let you auto-invest by taking the money out of each paycheck, making it even easier to invest.
So use this new year to switch up your finance game. Start slow but steady and rack up some serious cash over time. Or take a calculated risk and watch it pay off.
Either way, make sure you do something to make those coins into a never-ending bag.
Save your coins to INVEST
Whatever pointers you take from this list, make sure you invest in something. Investing now is investing in your future.
Don’t let your money just sit there. Sure there’s some risk, but without risk, there’s no reward. Do yourself a favor and drop some $$ on stocks.