I was 23 years old when I was first exposed to the stock market as a means of investment. It was, for me, the perfect tool: it allowed me to make my money work hard for me, and gave me the freedom to do other things I was passionate about. Not only was it a good match for my risk tolerance, it also fit my long term goals of achieving financial freedom.
Now, it has become my heart’s desire to encourage more Filipinos to invest in the stock market so that they may reap its wonderful benefits.
For decades, the stock market has been regarded to be for the rich, the intelligent, or the risk taker. People have been hesitant or even cautious about giving the stock market a try for fear of venturing into the unknown and losing money – they were probably never taught about it at home or in school. Through the years, I’ve seen a lot of people miss out on the wonderful earning potential that it offers.
So what exactly is the stock market?
Think of businesses. Businesses expand when new capital is infused to the company; the fresh funds give them the opportunity to build new offices, buy new machines, or even expand their products or improve their services.
Where does the stock market fit into all of these?
Corporations go into the stock market to get fresh new capital for them to expand their businesses. What they do is they sell parts of ownership of their company to the mass population via shares in the stock market. Once these are sold, the company gets the funds while those who gave cash become part owners of the company.
How do you fit in as an investor?
The stock market allows these shares to be bought by anyone and everyone as the stock market serves as the middle man between these big corporations and the investor. As the investor buys shares in the company, his investment grows as the company grows further. Being an investor in the stock market allows you to take part of the future earnings of the company. So as the company continues to increase in size and earnings, the investor reaps benefits as well.
How can you invest in the stock market?
One can invest in two ways: directly via an online or traditional broker; or through equity funds provided by financial institutions. What’s amazing is that both means are now easy and accessible compared to how it was years back. This allows you to still pursue your profession or business, while having your money work hard for you in the stock market.
Stay tuned for more bits and pieces of a brighter life in the stock market in the coming weeks. My desire is that this helps everyone move from being a spender to a saver; and from a saver to an investor.