The dream of many savers is to one day become rich thanks to investing in the stock market and achieve the long-awaited financial freedom. The sad reality is that the vast majority stay by the wayside. However, achieving this is not impossible at all. In this article I will explain the 3 necessary requirements to get rich investing in the stock market to try to help you achieve that long-awaited and remote goal for the vast majority of people.
Is it possible to get rich investing in the stock market?
If possible. The problem is that there is no quick or easy method to get rich investing in the stock market (don't be fooled). Also, it requires patience and effort. However, it can be done. The three requirements to get rich by investing in the stock market are:
Below I will explain the importance of each of these 3 requirements.
The first requirements to get rich investing in the stock market, money to invest
To invest in the stock market it is necessary to start with a raw material, which is money. Investing in the stock market is a means of making capital that has been saved profitable. The higher our initial capital and the more money we save, the less it will take to get rich by investing.
On the internet, it is very common to see advertisements or messages in forums and social networks in which it is promised to earn a large sum of money per month starting from very little capital. However, the harsh reality is that whoever tells you that you can get rich or live off the stock market with a single capital investment of 500 euros, lies vilely. The harsh reality is that most of those who trust these fake bag gurus they end up losing all their money.
Therefore, if you want to get rich by investing in the stock market, it will be necessary for you to dedicate your efforts to earn money and save to obtain the largest possible capital and then make it profitable in the financial markets.
The second requirement, time for investments to pay off
Despite what many think, almost no one has become rich in the stock market overnight by hitting a few "balls". What's more, practically all of the people who invest in the stock market looking for great returns in a short time end up losing their shirts.
Once again, whoever tells you that you can obtain great returns in a short time in a safe and sustainable way, is deceiving you. What's more, that person will most likely make you lose all your savings (and take a good pinch of it).
Investing in the stock market requires time to make our money profitable through power of compound interest. Therefore, my recommendation is that you be patient and let time make your money grow exponentially. As Charlie Munger, Buffett's partner and right hand man, put it:
"The great benefits are not in buying and selling, but in waiting"
The third requirement, profitability
The third pillar to get rich investing in the stock market is profitability. It is useless to have a large capital and a lot of time to make our investments profitable if we do not manage to take advantage of them.
In fact, many investors with time and money end up obtaining ridiculous returns or even losing their money because of investing without knowledge or because be advised by inept or people interested in making money at the expense of poor savers. For example, Victims of Bankia's IPO scam will never get their money back, as has happened in many other cases that would be impossible to enumerate.
What do I have to do then to get rich with the stock market?
There is no magic formula, you just have to do the following:
- First, save all the money you can to dedicate it to the investment.
- Start investing as soon as possible, since the time factor is essential.
- Dedicate time to learn to invest in the stock market, to maximize the profitability of your investments. You can also hire a good independent financial advisor to help you with this task.
I would like to use Warren Buffett as an example to follow for those of you who want to get rich investing in the stock market, since he followed these 3 steps to the letter:
- He had an austere life and devoted his savings to investment. In fact, he still lives in the house he bought in 1.957 for $ 31.500.
- He made his first investment in the stock market when he was 11 years old.
- Today, at 83 years old, he continues to dedicate time to training and learning to continue improving as an investor.
The result, Warren Buffett has an approximate fortune of about $ 58.200 billion and 4th place in Forbes magazine. I know that few can reach Buffett's fortune, but with a much smaller wealth you can obtain financial freedom.
As always, I await your comments, and, if you liked the article, I also encourage you to share it on forums and social networks.