Who wouldn’t want to make a little extra money, especially if it took very little effort?
One way to do this is by investing your money and letting it grow. The money does the work for you, right? You don’t have to put in the hours of work to have income. This, after all, is what the very wealthy do.
Its not that easy, as I’ll get to.
Keep in mind I’m not a financial planner, stock adviser, or work in any professional monetary capacity. I’m just a guy sharing my experiences, and you be foolish to take my advice. If you want investing advice, go talk to a professional. (There, got that disclaimer out of the way)
The side-hustle I explored was playing the stock market. Just get a trading account, buy some stock and presto more money. It works for the 401k, so it should work for this! Well, I’ve discovered there is a whole lot more to it. (By the way, you do have an IRA or 401k, right? If not, get one and put money in it.)
The first step is to get a stock trading account. This account works as a broker and does the back-end paperwork for you. They also hold your money in a trading account, so it is readily available for trades. Most trading account companies will provide some level of stock research for you. It varies from full guidance to just news clips and press releases.
The trading account ended up being the easiest part. There have been low-cost options for a while with inexpensive trading fees. Imagine my surprise when I found one that offered free trades! Robinhood is a new player in the stock trading industry and they recently expanded into crypto currencies, and coming up, banking. If you follow that link and sign up for an account, I get a little free stock. Just so you know.
Robinhood allowed me to take on all sorts of stocks, from ones that cost about a dollar a share, on up to hundreds per share. The joy of not paying a fee for trading a stock makes it all very easy. Perhaps too easy.
Here is my experiences with it. I invested some money in several stocks, some of which were growing rabidly. I was on the cusp of getting a 25% return on my investment in a single year. That’s a nice return, especially compared to the .05% the bank gives me on a savings account. I was giddy about it. I was winning at this game! I was so brilliant and this was so easy!
Then a Presidential election happened and the person whom everybody assumed would win, didn’t. Many many companies had planned their financial strategies based on the assumption on how the election would go. The stocks that I picked were going to make serious profits under the new administration. However, it was not to be. The other person was elected and my stocks dropped value faster than I could sell them. I ended up 25% BELOW where I had started. Boom, all that value gone and now I’m in the hole.
You see, myself and many other investors had banked on how we assumed the politics would go. If things had gone as expected, there surly would be another 25% growth the following year. Instead, it was other companies and other stocks that experienced the growth under the surprise administration. Overall, the market did much better following the election, but my stocks did not.
As an aside, the stocks were in the gun manufacturing industry. You can figure them out from there. You can see why they tanked if you put your mind to it.
It took another year of careful planning and watching the market daily to get back up to even. I was even able to get up to about a 10% return the following year. I mostly invested in tech stocks, and they seemed to consistently grow. Especially the emerging technology companies.
Wouldn’t you know it, but there was another small dip and my 10% growth became a 10% loss. It took a few months, but I got it back up to even and I’ve cashed out. There sits $0.25 in my trading account today. That’s all I have to show for it. I’m done with stocks for now.
Can you make a lot of money on the stock market? You bet you can. You can also lose that money very easily. Unless you can take the time to properly check out the stock you want to buy, the market, and what the future holds, you should stay away from it. I personally find it all much too volatile.
A simple news story from another country can cause a ripple in the market. After all, the stock market is just made up of people. People who also want to make money, but more importantly, not lose money. They will often sell right as a stock starts to descend, which further causes the stock price to drop. This causes slower traders to also sell, which further drops the stock price as demand declines. If you don’t catch it in time, you will lose money. Perhaps it will go up again? Perhaps it is at the bottom and it is time to buy before the correction back to normal price? What will the stock or the stock market do?
For me, it is too much trouble. Then again, it was an interesting experiment, and with a proper mindset, I might do it again one day.