I know you may have invested some of your money in the Stock market at some point in life but in this post, I will give you a solid foundation to invest in the stock market for creating huge wealth.
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Top reasons to invest in the Stock Market
1. You can't make millions from 9-5 Job
Here is the calculation let say your age is 24 years and your income is 1.5 Lakh per month equal to 18 lakh per annum and let say after deducting all taxes and expenses you managed to save 12 Lakh per annum equal to total saving of 360 lakh (3.6 Crore) in 30 years. (I am not including fixed deposit interest on saving while twenty years because the value of money is also decreasing due to continuous inflation in India). Now see the second case just open the compound calculator online from here and compound the savings of 50 thousand per month only @ 25% per annum till thirty years and here is the result,
Now I think you get my point.
2. You don't have to do anything, money will work for you
The best thing about investing in the stock market is you don't have to do hard work for creating a huge wealth except keeping an eye on your performing and nonperforming stocks on a regular basis and boom you have made it. But don't get too excited is not that easy also you have to be very strict with your discipline of investing otherwise you will not going to make money instead you will lose your capital.
3. Investing make you learn economics and increase your knowledge
There are a few steps before making a final decision for investing in a particular stock, you have to analysis the company profile by close looking its profit and loss statement, Balance sheet, EPS, past performance, Growth Prospectus, current PE, Industry PE, Net profit, Growth in Net profit, shareholdings, its Management and much more.
I know these terms are maybe new to you but all these are the very important factor to consider before investing in any stock and if you will do the research then as time passes your knowledge of economics and different industries will increase which is very beneficial to you in future.
Why people lose money in the Stock Market
Investing in stocks is the game of patience and compounding and if someone will lose patience then he will lose money also, other than this there are few things due to which people end up making losses.
The things you have to do in order to make zero loss in the stock market are:
- Always invest in good stocks like Maruti Suzuki, RBL Bank (Avoid penny stocks)
- Always diversify your investment
- Invest for long-term (for at least 5-7 years)
- Please don't do Interday trading, futures trading, and options trade
- Never buy if the market is at peak
If you follow my above 5 rules then you will never make a loss in stock investing, and if someone made a loss in the stock market then I am sure he or she didn't follow the above rule. So please stick to above 5 rules and your capital is always safe.
How to make a safe investment in the Stock Market
I know you understood why people lose money by reading above but there is more to know before you step in the stock market. Everyone knows that Fixed deposits are 100% secure and the stock market is too risky due to too much price fluctuations of the company stocks and its true there is more risk involved if you want to earn a higher return on your investment.
But there is a simple method which you can follow to avoid this risk and make a safe investment in the stock market and this method is “SIP Mode” means never invest in lump sum amount at once because if due to some reason market will go down then your money got stuck till the time stocks goes above your buying price and this can be happened with good stocks also like Lupin so always invest in small amount but invest every month and this is called SIP Mode.
Note:- If you will not follow the above advice then you will surely lose your capital.
Things to keep in mind while investing in Stock Market
There are still a few points which I want to make sure you keep in your mind while investing are:
- Always remember you have to invest your surplus amount only because you are investing for long-term and you may need your money in between which can spoil your returns so start small but invest only surplus.
- Never invest in the stock market if you are in debt because there is not fixed return on investing in the stock market but you have to pay a fixed amount of interest on your debt amount.
- Never take debt for investing because this will be going your life's worst decision ever taken by you.
- Never do Interday trading, futures trading, and options trading.
- Don't watch the prices of your invested stocks on daily basis please be patience.
- Always keep some cash in hand to invest in the market crash situation, for example, see this where I posted the great opportunity to invest in Maruti Suzuki Stock.
- Always Diversify your portfolio.
- Invest on a regular basis.
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