there are no workable get rich quick schemes
A naive lady named Deanne Forrest lost all her savings, and some money she borrowed, (a total of £12,500 in all), by dabbling in on-line stock market trading. Specifically Deanne got involved with something called binary options trading, which is as risky as betting all your worldly goods on one spin of the roulette wheel in a Las Vegas casino.
Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas. ~ Paul Samuelson
Let me make one thing abundantly clear, this kind of on-line trading is not dealing on the stock market in any sensible way, this is gambling, pure and simple. It’s even called spread betting, and spread betting is a very fast way for you to lose a
hell heck of a lot of money. It’s not investing, it’s just high-risk gambling, and has as much to do with real finance as on-line dating has to do with real relationships.
Investing in the stock market is something totally different from these fast, on-line, get rich quick scams.
The stock market is a place, (real or virtual), where the prices of stocks and shares of major companies are quoted, and those stocks and shares can be bought and sold at those quoted prices. The major shares are also grouped to give an indication of the overall strength of the market; for example the FTSE 100, in London, and the Dow Jones Industrial Average, on Wall Street.
In general, one buys and sells stocks and shares through a broker, either by telephone, or increasingly these days through an on-line service. There are specialist stock brokers, but most people are most likely to use their bank to buy and sell shares. If you want to invest in your national stock market, check with your bank first. I can almost guarantee they will offer stock market services.
If it’s not a get rich quick scheme, why would you want to invest in the stock market?
In general, the stock market is an indicator of the overall health of a country’s economy. If the overall economy of the USA is doing well, then Wall Street will generally do well. If the overall economy of the United Kingdom is doing well, then the City of London will generally do well. But, every now and again the markets will go crazy, for no readily apparent reason.
Every once in a while the market does something so stupid it takes your breath away. ~ Jim Cramer
There are two basic ways of investing in the stock market;
- You can buy into a unit investment trust, (however it’s named or described). This allows you to invest in a group of shares, thereby spreading your risk. Unit trusts are the way most people get involved with the stock markets. The main downside of a unit trust is that your profits can get eaten up by the trust manager’s fees and charges.
- You can buy the shares of specific companies in your own right.
You also make money through stock market investments in two ways.
- An increase in the market price of the shares you have bought. For example, if you had bought shares in The Boeing Company on February 12th 2016, you would have paid $105.12 per share. If you’d sold those same shares on December 16th 2016 you would have received $154.50 per share, a handy 50% profit. But remember,the price of shares can go down as well as up.
- Receipt of regular dividends from the company. These dividends represent your share of the company’s earnings. For example, shares in Royal Dutch Shell, an oil and gas company, had a yield of 6.05% in the last year. It’s easy to find out which companies have paid the most back to their shareholders. The Boeing dividend yield is currently 2.82%.
Historically, investments in the stock markets have outperformed all other liquid investments, and all other personal investments with the exception of real estate, (property). However, the value of all assets can fall as well as rise. Many ‘expert pundits‘ (there’s an oxymoron for you), are predicting an imminent crash in the stock markets. These things have a nasty habit of becoming self-fulfilling prophecies.
Should you want to invest in the stock market, then your first choice is whether to buy into a unit trust, or buy the shares of particular companies for yourself ~ cutting out the middle-man. These choices are not necessarily mutually exclusive.
It’s very easy to find information on investment trusts ~ just type something like best performing unit trusts into your search engine. Whatever you do, don’t believe most of what the sales teams at these companies tell you.
Choosing companies whose shares you’re going to buy for yourself is more difficult, but you could try typing something like best performing US stocks into your search engine. If you are buying shares in particular companies in your own right, don’t put all your eggs in one basket. Spread your investment among different companies and different market sectors.
Stock market investments should easily out-perform most other ways of saving and investing, with the exception of buying property, (real estate). The caveats are; choose wisely, don’t put all your eggs in one basket, never borrow money to invest, pay off all your debts before investing in the stock market, and stock market investments are for the long term. Expect to hold your shares for years rather than weeks or months.
The stock market is not a get rich quick scheme, never was, and never will be, no matter what some silver-tongued salesperson might have you believe. A good rule is, don’t believe sales people, some of them
tell lies are economical with the truth.
these opinions are mine and mine alone
Monday morning and the poor working stiffs are getting out of bed to earn an honest crust, as best they can.
I spent long enough doing some of that. But now it’s your lucky day, because I’ve decided that Mondays I’m going to give you some money advice, whether you want it or not. Look at it this way, back in the day I used to get paid $500 an hour for doing this, so listen up. I’d tell you my qualifications, but unless you’re the type who is having a heart attack and asks the heart surgeon where he interned, there’s not much point. (If you are the type who asks a heart surgeon where he interned, then just fuck off and don’t read my blog again.)
So, the most important thing right now is to ask yourself is; are you broke, or do you have any money in the bank and / or cash under the mattress?
Interest rates are an historic low. If you have more than $1,000 in spare cash you are a fool. Money is worthless, (that’s complicated, but trust me), if your cash isn’t doing anything you may as well stay in bed on Monday morning.
So, what would financially intelligent people do right now?
- Pay off your debts, until you only have the magic $1,000 left in your pocket-book or bank account.
- Pay off those debts in order of the highest interest rate first. Unless you are an utter wassock this will mean #1 credit card balances, #2 store credit, #3 personal loans from a reputable provider such as your bank, #4 your mortgage.
- Get rid of any and all bank accounts, credit cards, store cards that charge a fee. This is a sick practice, and I should know, I practically reinvented the idea of ripping-off bank customers.
- Start putting any cash, bank balances, and ‘credit monies‘ you have left to work for you.
- Do not fall for get rich quick schemes. If it sounds too good to be true, then it is. An honest annual rate of return right now is 6%.
OK, number 4 above is difficult. But this starts with the fact that the stock market as a whole usually shows an annual rise of 3% to 6%, plus you get dividends. Google this if you don’t believe me. Rule #1, don’t buy a managed portfolio / product. The people advising you about / selling financial investments are jerks and crooks. Don’t trust them. If you have a little spare cash buy a couple or four blue chip stocks or a tracker investment.
Never, ever, trust a financial advisor / banker / friend when it comes to financial investments. (And, you are a fool, and or a woman, if you lend money to a friend or member of your family.)
If you’re a guy with a lot of spare cash, at least spend it on your girl, or any woman, rather than being that utterly boring and useless fart, the contemptible Scrooge who thinks he’s watching his money grow. Your money isn’t growing, it’s dwindling away. Idle money loses value over time, always.
insults advice for the financially naive next Monday.