Study and measure before you take the dive a follow up how to on creating wealth and growing your money
“In investing, what is comfortable is rarely profitable.” — Robert Arnott
Taking Action
Several readers kindly commented and asked for follow up information after reading my article A Practical Entry Point to Stock Market Investing.
Thank you Linda Levitt and Meg Stewart.
It’s no wonder it took me so long to become an investor, my Dad had a palpable hate for the stock market.
The apple doesn’t fall to far from the tree, he passed it on to me.
Well, he tried.
Somewhere along the line, I realized he had taught me all he could, I sought other mentors.
That’s when I found many ready to help, including Robert Kiyosaki the author of Rich Dad Poor Dad.
“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” — Peter Lynch
4 Ways to Earn
Robert made most of his money in the early days investing in Real Estate.
He went on to write books, create a board game, begin podcasting and educating around the subject of creating wealth. He even wrote several books with Donald Trump.
It was Robert who introduced clarification for me on the four ways to earn money.
E — Employee
Most individuals only earn in this way. You work for a company trading your time for money. To earn more money, you must work more hours. Another option is work for another company that pays better. In this way there is no passive income. If you don’t work, you don’t make any money.
S — Self Employed
One step up from employee, but still are trading time for money. You own your own business, but it really owns you. You do have more personal and financial freedom than an employee.
B — Business Owner
A business demands you have a system in place. Others work for you as employees or you are a one man band. You aren’t selling your time for money, but rather selling a product or service. You don’t have to be working for the business to generate income.
I — Investor
This is where you truly have passive income. Investments like stocks, bonds, and real estate generate cash flow. These are the investments that will allow you to retire. It can also be things like trademarks, copyrights, and royalties. Things you build once and have a long time-span in payouts.
“Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this.” — Dave Ramsey
New Direction
Once I had this new information, realization came that I had up until that point, only worked in one of the four areas.
And it was the worst of the four, Employee.
No wonder I was always earning only enough to keep me in a hand to mouth reality. The money earned was already spent, nothing left for savings or emergencies like an injury or illness.
This realization led to my first start in business as I formed Christopher Craft Photography. Things were going along well until I was involved in an accident shattering my collar bone and breaking my skull open.
My body was essentially the earning tool along with some camera equipment. There was no health insurance or any way to earn while recovering.
After I could walk again, I was forced to get yet another JOB.
“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” — Robert Kiyosaki
New Horizons
Still working a job, I set my sights on becoming a stock market investor.
But how?
One thing I had learned in my new quest for knowledge was to ask better questions. For instance, instead of asking for and naming all the reasons I had not invested yet, along with saying, “why can’t I?”
A better question is “how can I?”
The latter leads me to solutions instead of despair and self loathing.
The right question attracted a tool that would allow me to watch and learn. Enter Google finance pages.
“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” — Robert G. Allen
Since then, I use many of Google’s free tools that can be accessed from the home page. I suggest you use this page as a jump off the the internet.
Make an account if you don’t already have one. Then in the top right corner you will see a place to access Gmail and an icon that looks like nine little boxes.
If you click on that you get access to some amazing tools including, Google Finance.
There you look up particular stock symbols, see their financials, view the chart and begin a watch list portfolio. Mine looks like this.
“The individual investor should act consistently as an investor and not as a speculator.” — Ben Graham
Finding the Right Information
As you can see, this portfolio is full of many stocks and at a glance moving left to right, I can see the company name, it’s stock symbol, the asking price per share and the previous days performance up or down in value.
On the right column it gives world market performance and currency fluctuations.
One click on the row of a stock will bring up more information and a chart where you can control the period of time, from a day all the way to the entire history of the stocks performance.
If you look at the center upper right there is a link labeled “add to watch list” from there you build your portfolio list.
In the case of Adobe the chart looks like this…
This is a one day chart and during an 6 hour period, Adobe gained 1.29% or $4.83.
From this page I can look at tabs above that include news about this stock, financials like profit and loss statements plus a compare function.
“The best stock to buy is the one you already own.”
— Peter Lynch
What Do I Know
The best businesses for you to invest in are doing something that you know a little bit about.
If I were going to pick a new company to invest in today I’d look around like this.
First, I’d ask myself, “How can I find a hot new stock that will grow for years to come?”
Then I might ask, “what company is on fire today?”
I just did, and the answer came back Tesla, the stock symbol is TSLA.
This is a one year chart for Tesla showing a meteoric rise from $212.88 to $800.03 in the span of less than 7 months.
Whatever amount you could have invested in July of 2019, would have grown by almost 400% by mid February of 2020.
So, we missed the boat!
But did we?
This electric car thing is obviously gaining traction. What is the right question to ask now?
“What can I invest in that electric cars need to operate?”
What did you come up with?
Yes, that’s correct, BATTERIES!
Stay tuned for parts 3 and 4 coming soon!
Thanks for reading! Good Luck investing, or not.
Cheers!
© Christopher Boswell 2020. All Rights Reserved.
When Christopher isn’t writing from home, he can be found traveling or capturing photographs somewhere in the United States. He loves to generate Graphic Design, process images or video, and flying his Unmanned Aerial Vehicle. More pastimes include wrangling dogs, backpacking and kayaking. He currently lives in the Pacific Northwest.
Read more on Medium or listen to the audio article version at www.RealWindowCreative.com.
