I know that this blog is focused about travel which makes me feel slightly hesitant to write this article. BUT, I’ve always believed that everything is somehow connected one way or another. Travel and money, for instance. Although some claim that you can travel for free, it takes a lot of effort and money to reach that travel influencer level. So if you’re someone who’s looking to invest in the stock market to grow your travel fund or whatever goal you choose to set, here are my two cents. I’m no stock market expert but if I had a minute to give a practical advice to anyone looking to invest in the stock market, this is what I would say.
1. Save first
Make sure you have cash in bank before doing any sort of investment. Remember that there is always a risk involved when investing. Having cash in your savings account makes you feel comfortable because you have that extra stash. It’s just nicer to look at an account with money when your investment account is hard to look at.
2. Stock market is not for the faint hearted
Whether you’re an investor or trader, stock market is just not for the faint hearted. This is the reason you should only invest your extra money. During my first year investing, I saw my stocks earn for about 8-12%. I was over the moon since that growth rate is definitely better than the interest offered by banks. I’m in the right direction, I thought. The next day, the stock price dropped. I was shocked, I didn’t know what to do. Where the hell did my money go? Do I sell? I was definitely in panic so I decided to log out of my online brokerage account and take a deep breath. I remember the observations shared by famous investor like Warren Buffet. Stock market is a cycle. He was right. Over the years, I saw it was really a cycle. Since then, whenever the stock market is down, I don’t let my emotion take over me. I look at it as an opportunity to buy stocks at lower prices. Think of it as Gucci bag is at 20% off! But instead of buying Gucci bag, I buy stocks on sale before it goes back to its regular price. 😉
3. Buy a stock that you love
Don’t worry about other people’s opinion if they don’t like your stock pick. We all have a different taste and preference. It’s important to buy a stock backed up with excellent financial statement. But it is as important to choose a stock from a company that you love and proud to own. If you’re an investor, it means that you’ll be owning that stock for 10 years or forever. Blue chip stocks are great for long term investors. These are stocks issued by well established and unshakeable companies that are leaders of their respective industry.
4. Read. Research. Learn.
Read about the life of the world’s greatest investors. Read about the modern investors. Know their ways and techniques and you might be on their shoes few years from now. Get to know basic terms used in stock market. Know how to navigate your online brokerage account. Know how to buy, how to sell. Know how to read financial statements so that you know if a company is performing well or not. Just keep on learning. Never stop improving and educating yourself and the best way to do this is by reading.