SHARES – BUY AND HOLD
This is probably the safest, consistent and passive way to make money. You don’t do much. Just buy the shares when you have money and collect the dividends as they pay out. Not much risk as you you are not on borrowed money but requires decent amounts of capital to get started. It probably has the lowest return as well. But hey, it’s still cool. I have done this in the past with some decent results. That was until I discovered you can trade the shares for regular gains. The way I look at it, any return is better than none. Buy and hold is more of a long term strategy but at least you won’t be having heart attacks on a regular basis if fluctuating markets are something that bothers you.
To anyone doing this I would hope you have learned how to research stocks. You’d want to find stocks that pay at least 5% in dividend returns, or bought in at a good time (Like right after a market correction, or crash) to get the capital growth returns. If you have no reasonable amounts of money to invest in this, I’d suggest a regular savings plan where you’d you’d need to throw in money regularly and buy in, in bundles. Say you throw in $100 per week or something buy in on $2000+ lots to make this worth while and not get killed by fees. To make this start generating income is slow like I said you could reasonably expect 5% dividends on stocks if you researched what you bought.
THE RISKS ASSOCIATED
Like any investment vehicle there are associated risks. Your shares could go up OR down in value. I’d recommend buying at least 5 different shares, but really 10 would be better. Out of this you’ll have a few winners and maybe looser or two but the winners should compensate for this. If there is a complete market correction or crash, there’s pretty much nothing you can do but sit these things out and wait for your shares to regain in value. That I guess is part of the risk with these things.
Another strategy you could use is to save money regularly and wait for a market crash. THere’s usually one every couple of years. you could get in at a 20-40% discount. Then wait for a market rebound and you’ve made some easy money.
LONG TERM GROWTH
This is a LONG TERM growth strategy. Long term as in maybe a LIFETIME strategy similar to your retirement fund. But you can always sell off holdings if you need to. At least in that respect if you’re putting in money and need it back at some point, it is accessible. If the shares go up substantially you can make the decision to sell if you feel that is appropriate. Let’s say they go down you basically just have to sit around and wait it out. In the meantime at least you should still be getting some dividend payments.
It’s important to note, famous billionaire investor Warren Buffett used this as his preferred investment method.
To get started with this contact your bank as they probably have a share trading account they can set you up with. For those not willing to put a heap of active time into this this might be the easier option as it ties in with your internet banking etc. For those that can’t do this there are other options too like spaceship etc…. where you can invest a few dollars at a time.
If you need money now, or are struggling week to week, this may not be the investment vehicle for you. Maybe just leave your money in the bank, or wait till an easier investment opportunity comes along (which I’ll be posting about soon too).
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