Written by: Aiya Rodjel
There are many ways to grow one’s wealth. You can start a small business, purchase a real estate property or start investing. Some people get into cryptocurrency and even play online games to make money.
You work very hard to make money, and you should make decisions so your money works for you. The financial decisions you make today can impact the quality of your lifestyle many years from now.
While there’s nothing wrong with setting aside a portion of your income into your savings account, this alone won’t help you attain your financial goals. A lot of people shy away from discussions on personal finance because it can be so intimidating. Comprehensive research is key to a better financial future. That’s why you should educate yourself for the betterment of your future.
No Risks, No Rewards
If finance terms such as mutual funds, investment vehicles, and individual stocks scare you, well, you are not alone. With so many horror stories of people losing their life savings because of poor investment advice, who wouldn’t be?
Well, it is important to be clear that online investing has risks. That’s why you shouldn’t allot precious savings to online stock. Online stockbrokers or your investment advisor can help you make investment decisions based on your financial stature. However, they cannot guarantee that your investment will multiply exponentially under their care.
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What is investing?
Before you jump the gun, you need to understand the fundamentals of investing. Basically, investing is a way for you to set aside some of your hard-earned money and have that money work for you. If you invest wisely, you can make more money so you can live the life you’ve always dreamed of.
According to legendary investor Warren Buffet, investing is the process of laying out money now to receive more money in the future. The goal of many investors is to put one’s money to work in one or more investment vehicles, and hope the money grows over time.
One of the first questions the best online stock brokers ask beginner investors is ‘what kind of investor are you?’ You need to layout your investment goals, and what level of risk you’re willing to take to achieve your goals.
Some people prefer to be active in investing online by online trading themselves. Most investors would rather buy stocks and follow the investment strategy by brokerage services or a certified online broker.
How does stock trading work anyway?
One of the most popular ways of investing online is by diving into the stock market. Stock trading is a form of investment that prioritizes short-term goals over long-term profits. As with any type of investment, it can be risky to get into stocks without understanding the fundamentals.
First of all, you need to understand that not all those who buy and sell stocks are certified stock brokers. Plus, many online brokers aren’t like what see in movies such as ‘The World of Wall Street.’ You can even start being an online broker in the comforts of your home.
Basically, stockbrokers are those who buy and sell stocks in order to capitalize on price fluctuations on a daily basis. They keep track of the stock market for their investors’ financial benefit. These active traders bet that they can make money on a short-term basis rather than investing in a blue-chip company that can take years or even decades.
Trusting in online brokers
Online brokers are either full-service or discount brokers. As the name implies, full-service brokers provide a full range of traditional brokerage services. A full-service broker can provide a beginner investor with a full suite of options for healthcare, retirement planning, and other investments.
Full-service brokers usually deal with clients with high net worths, as they charge substantial fees for their services. These include a certain percentage of your transactions and a percentage of the assets they manage. That’s why full-service brokers have a high minimum deposit requirement.
Discount brokers used to be the exception in the world of online brokers. Now, discount brokers have become the norm. Discount online brokers essentially give active investors the tools or advice on various trading platforms. They also provide educational resources and helpful tips to buy and sell stocks. Many brokers of this type even offer Robo-advisors as well.
While there may be cases a discount broker will have no or minimum deposit restrictions, that discount broker might have a substantial brokerage fee. That’s why reading up on educational resources is important in the world of investing.
In case you’re not familiar with Robo-advisors, basically, a Robo-advisor is an online investment advisor that provides people advice. A Robo-advisor bases its advice on online investing in mathematical rules or algorithms. They’re designed to minimize human intervention.
Nowadays, there are mobile apps that charge low fees so people can start investing. You simply need to open an account in a certain mobile app. The mobile app then asks if you’re interested in investing in mutual funds or index funds. You can see expense ratios, mutuals funds information, and the like right on your smartphone. The mobile app sends reminders so you can make deposits on time.
Benefits of getting into mutual funds and other stocks
There are a lot of reasons why should start investing in stocks today. By making the decision of starting early, you won’t have to borrow money in order to buy your dream home or enjoy retirement. Here are some benefits you can gain if you choose to invest:
There are higher investment returns.
People who started investing early in life stand to gain more in the long run. The stock market may be volatile, but the trading costs will be worth it in the long haul. Online stock doesn’t always perform very well. That’s why the best online investors don’t put all their money into one account.
Setting aside money in your savings account may be a safe choice, but the interest you stand to gain is minimal. If you started investing at an early age, you won’t have to revert to personal loans or other financial services to achieve your goals.
It’s important to note that the money you allot to investing online won’t double overnight. If a financial advisor offers a plan that will multiply your money in a short period of time, that might be a scam.
Investing in mutual funds and stocks may take a while, but your investment will return to you in due time. Plus, you will have gained more than you have invested. All it takes is some patience and informed decisions.
The digital age has leveled the field.
With more information on mutual funds, online trading platforms, and the like, it’s easy to link up with the best online stock brokers. You don’t have to enter the world of online investing blindly. You can do your own research so you can start a conversation with an online broker with more information. You can even start a brokerage account at home if you’re willing to take the bulls by the horn.
Before, people had to monitor their television screens and newspapers to monitor trading commissions. Now, all you need is internet access to see the latest news in stocks. You can easily access your online brokerage account to see the performance of your stocks.
There are even easy online investing tips and gurus who can help you make better decisions. You can even read up finance publications such as The Wall Street Journal and The Economist to keep yourself informed on the latest in the world of finance. By making the crucial decision of starting today, you can pave the way for a better future.
You can achieve your financial goals faster.
What are your personal goals? Even if you’re making six digits a month, it can be difficult to achieve your goals with the bills you pay. You can never tell what tomorrow brings. The money you using to investing online can even serve as your emergency money in case you or a loved one needs extra cash.
There’s nothing wrong with setting aside money in a cash account to pay for your children’s college education. However, by investing online, you can increase your money slowly but surely. By investing in mutual funds today, you can earn more funds to achieve your financial goals.
Other investors get discouraged by poor performance in the market. That fear is perfectly normal. However, you will stand to gain more in the long run if you invest in various vehicles such as mutual funds and exchange-traded funds.
You can beat inflation rates.
Here’s a sobering fact: the value of the money you set aside in your savings account will decrease in the long haul. Your purchasing power will decline as inflation will eat away the hard-earned money you set aside.
The P10,000 you set aside in the bank can purchase you the latest gadget or toy in the market. However, by choosing to allot that money to investing online, you can purchase more gadgets in the future. Given how expensive the latest gadgets are becoming, you can even buy more expensive products. Therefore, you can beat inflation rates by investing your money early on.
By starting a brokerage account and investing online, you can engage in various investment options such as exchange-traded funds and mutual funds to increase the amount in your accounts. Even if you’re not interested in monitoring the market, other brokers can open an account on your behalf, and do the trading for you.
It provides an additional source of income.
You don’t have to quit your day job to open a brokerage account and get into the world of ETF trades and mutual fund. In fact, investing online doesn’t require a lot of your precious time. Once you’ve earned enough money for account minimums, you can get started on a trading platform of your choice.
Even if you’ve managed to gain money through ETF trades from a particular trading platform, you can then use the account minimums to invest in another account minimum. There are even free stock options you can get into.
By making the right financial decisions, you can make your money work for you. In turn, you have an additional source of income. It’s important to note that the money you gain from investing online is not necessarily untouchable. While it may take a while for it to grow, you can withdraw the money if needed. Hence, it’s sort of a way of forced savings.
How do you dive into the stock market?
As you get into the world of stock trading and online investments, first of all, you need to invest in a fast, reliable, and unlimited, high-speed internet connection. After all, how will you be able to monitor the performance of your stocks if you don’t have access to it, to begin with?
That’s why one of the best investments you can make today is an affordable yet reliable fiber internet connection from Streamtech. By investing in Streamtech today, you can arm yourself with the information and advice you need to make better investment decisions in the future.
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