When it comes to making an extra buck, many people turn to the stock market right now to make the most of the spare cash sitting in their bank accounts. However, one of the questions you may be asking yourself is – is investing in stocks and making a healthy profit really as easy as it sounds?
With many movies and TV shows showing young people driven to become rich overnight and making money, it’s easy to see why people become obsessed with the idea of investing their cash on the stock market. But, what is the reality?
Cutting to the chase, one of the aspects you need to take on board is that it’s highly unlikely you’re going to become a billionaire after investing in the stock market, regardless of how large your initial fortune is. With that being said, it doesn’t mean that you can’t receive a good return on the stock market, providing you accept there is the element of risk involved.
One of the realities of the stock market to be aware of is that your returns on the stock market will fluctuate daily as a result of inflation, therefore, you need to be prepared for the rollercoaster ride that investing in stocks brings; but do be aware the risk does reduce if you’re prepared to invest your cash over a long period of time.
Don’t become set on the plan that a random stock pick will strike lucky – you’ll need to come up with a plan with a financial advisor to guide you on the most suitable stocks to invest in based on the risk factor you’re comfortable with and investment goals.
When buying stocks, you’re committing to purchasing part possession of a publicly traded company. The intention is relying on the hope that the price of the stock will rise so you can earn a healthy profit, but of course, you can also lose a great deal of cash too if the price drops.
Spread betting is just one option in which you can trade on a range of financial markets and take advantage of short-term trading opportunities. If you’re new to spread betting, it would be wise to find out before committing to this type of investment.
Did you know that celebrities are also trying their hand at investing? Aside from the likes of Richard Branson and Sir Alan Sugar who have gained celebrity status for their wise investment choices, what about professional sportspeople, musicians and actors? Here are just a few celebrities who earn part of their fortune from investing:
- David Beckham
- Andy Murray
- Stephen Fry
- Ant and Dec
- Sir Elton John
- Sir Alex Ferguson
There are many different types of investments to think about, however, stocks are certainly the most popular due to the financial benefits they generate. Each investment will differ in terms of risk and reward. If your investments serve you well, you may need to pay capital gains tax.