Thursday, March 8, 2012

How do people actually makes money from investing? ? Sakemi's Blog

People, I need practical insights on how do most people actually make a living through investing. I am waaayy tooo confused about this. people who invest on stocks, i mean, they?re literally there for a long time (some even more than a decade) (correct me if i?m mistaken) for them to see really big profits.. so does that mean that it will take me years before i can make money on investing?so how do people out there really make a living through investing? how do they get their profits periodically?

I am so confused about this and i need your advice.. i appreciate your responses.

You can make money on stocks by Capital Appreciation, stock Price Increase, and selling at a high,..
and Dividends, a payment to the shareholder every year..
Very few make a living on Investing,..more likely it?s a supplement,..money on the side..
Yes it takes Years,..But you are rewarded for your Patience..Investing, and the knowledge to go with it..

You don?t "Make a Living" off of investing (unless you graduate from an extensive finance program at a big name school and get put on a Wall Street trading desk).You invest to build assets to sustain you in retirement and give you financial security.

OK take $30, go to Amazon.com

Buy and then read in this order:

1)The Richest Man in Babylon ? Clauson (The philosophy of saving and investing, its dated but still valid)
2) The Millionaire Next Door ? Stanley/Darko (A long term look at the habits of wealth creators)
3) One of the Dummies Books on Investing, or The Only Investment Guide You?ll Ever Need ? Tobais (The last edition of Tobais?s book was getting a little off topic and into political commentary, but the investment part is good).

All ways ?.. some collect dividend payments, some trade weekly or monthly, some hold long term.

prctice yourself. search .

I have read a few investing books, a couple have given examples of people investing, in all examples, the sooner you invest the better. In one book ( titled "The Automatic Millionaire" ) the author said that some people may assume his book was a way for people to get rich quick and easy, he went on to say that his book described a method to get rich slowly ( he used a method that implemented PPP [ preauthorize purchase plans ] and thus you have "The automatic millionaire" ). There is no quick and easy way to get rich, so yes, it will take you years to build your wealth.

The reason why so many older investors make so much money on their investments is because of this: let?s say you put $10,000 into an investment that yields 10%, you would make only $1,000. If you put one million dollars in the same investment, you will receive $100,000. I?ve read a couple of web sites from people who have started investing and building wealth, they all seemed to agree that the first $100,000 is hardest, however very satisfying. Also, compound interest works wonders, I believe Benjamin Franklin said that this was one of the most important or fascinating mathematic principles that exist.

Compound interest works like this: you put $1,000 into an investment that yields 10% so at the end of year, you have $1,100, the $100 that you received is automatically reinvested in the investment and now you have extra money for the interest to be calculated. The next year you would then have $1,210. If the money earned was not reinvested, you would have made only $200 in this example, I know the extra $10 dollars doesn?t seem like much, but after the course of 40 years, in the first example where the money was reinvested, you would have $41,144.78 in the second example, you would gained $3,900 ( plus the $1,000 that was in the investment ). Obviously the first example is much more favourable, and this is one of the reasons why older investors earn more.

Make sure you read some investing books, don?t go online and buy books, make sure you can flip through the book so you can make sure if that?s what you?re looking for. And one last note investing is to sustain your retirement, you need to build up a large enough nest egg so that you can live off the interest and beat inflation, the amount you need depends on your standard of living. If I?m not mistaken, $500,000 is thought to be the bear minimum if you want to be able to live another couple of decades after you retire, if you want to live comfortably, you?ll have to build a little more.

Source: http://sakemi.com/how-do-people-actually-makes-money-from-investing/

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