So, as covid19 has hit the economy hard and many of us have lost their jobs due to businesses going bust, its logical to consider our income and saving and in what way we can maximize our earnings. Money as with health is important for our well-being, after all without money we wont be able to afford good housing, clothes, medications and decent meals. So investing it rather then leaving it sit in the bank in my opinion is the best way of maximizing your income.
And if you are questioning whether you must be a financial expert to invest money, the quick answer is no!
The Stock Market
Before investing in the stock market its good to first Dissect “what is the stock market”, in order to win you must understand what you are dealing with!
In simple terms, The stock market is a collection of markets and exchanges where regular activities such as buying, selling, and issuance of shares(of publicly-held companies) take place. Such financial activities are conducted through institutionalized formal exchanges or marketplaces which operate under a defined set of regulations. The advantage in 2020 is that mobile apps like Revolut, Robinhood, FirstTrade and eToro allow us to trade stocks online, at the touch of our fingertips.
When people hear “The Stock Market” the think of people selling and buying in the middle of new york, The wolf of wall street or the stock market crash of 2008. With all the negative vibes about stocks out there, the reality is quite different. Putting some money in the stock market for the long term can be beneficial as in the long run your money will increase and although you might loose some money initially in the long run if you invest in strong outlook companies (by following market news) you will not loose money.
Basically investing in a smart way is creating financial wealth that grows with time rather then letting your money depreciate in the bank.
I will only say that you should really think twice about using financial advisors or investment brokers, as they in big part mostly salesmen who will make money on the amount of products they manage to sell you. When it comes to Index Funds, these tend to perform better than actively managed funds, so you don’t need to end up paying commissions on a yearly basis for someone how is just managing your funds.
Index investing can be used to your benefit, especially now that roboadvisors are taking the place of actual salepeople, so that eliminates the middleman.
A great European platform for roboadvisor-based index investing is Finizens.
In my case as I am living in Europe I opt to use a European platform like Revolut. The Revolut app provides a free stock exchange of up to 3 trades per month, which is pretty good as when investing you can invest a small amount or more per month in strong companies that have good future outlooks.
For people living in the USA Robinhood would be a better suited platform.
Revolut as a Platform
Revolut is a European financial technology company formed in July 1st 2015 by CEO Nikolay Storonsky and Vlad Yatsenko, a company that allows money exchange, cryptocurrency exchange, P2P money lending, free stock exchange up to 3 trades per month.
Setting up an account is easy and the visa card that comes with the account set up is free.
Trading on Revolut is based on the US stock market, if you have euros or pounds you can easily convert them to US dollars on the app directly. after selecting a stock you can buy fractional shares, so you dont have to buy a $200 dollar share but you can invest as little as 1dollar up to and amount you want. You have up 3 free trades and after that there is a small fee of around 1 dollar (which compared with other platforms is really cheap).
The advantages of Revolut is that the trades are instant, you can withdraw the money when you want and transfer funds for free. The pro of this app is that you can actually purchase Crypto, were you can buy Bitcoin, Etherium and Ripple.
A con of this app is that its limited to US based stocks, you can’t buy ETFs or UK stocks. The base currency for trading is the US dollar so its important to look up the exchange currency before investing with US dollar when compared to Euro.
Another con i didn’t like about this app is that the tools and the analytics used in the app are lacking, the app lacks graphs that show growth overtime of the portfolio being invested. Its good to note any transactions down onto a spreadsheet and take note of your trades.
The main point here is finiding trades with good future potential, buying the stocks low and selling them high after some time..
If you are interested in EFTs than apps like Firstrade can provide a platform for trading with no fees. In my opinion if you are starting out in stock trading ETFs probably are better suited. The advantage of an ETF (Exchange Traded Funds) is that it combines the ease of stock trading with the diversification of mutual funds.
If you are interested in investing and growing your wealth, great blogs you can follow include A simple Path to Wealth, Mr Money Mustache, The White Coat Investor (a investment blog directed towards doctors), Banker On Wheels and for European investing EuroFinanceBlogs.