How can you get rich investing in stocks?
Did you know that the rich did not become rich by working hard? No, the rich have become rich by managing their money smartly! The expression work smart, not hard is therefore certainly applicable! But how can you become rich by investing in shares? We will discuss the different ways and see how realistic it is.
Can you get rich investing in stocks?
It is certainly possible to become rich with shares. Well-known investors such as Warren Buffett and Benjamin Graham have made their fortunes with it. The good news is that you can become rich even with a small amount of money.
However, this is completely theoretical and certainly not easy. You need to invest a lot of time as well as money if you want to achieve good results in the short term. Alternatively, you can choose the slow method, but then you need a lot of patience. We will discuss the different methods in this article.
Before you read on, it is important to remember this: YES you can become rich with investing and NO there are no guarantees. You can also lose a lot of money with investing, especially if you have no idea what you are doing and jump in at the deep end without practising.
How can you get rich with active stock trading?
The first way in which you can invest in shares is by day trading. Day trading is the very active trading of shares. You can use technical levels and the latest news to quickly buy and sell shares. The aim of active trading is to achieve a high return in the short term.
This way of trading takes a lot of time: if you apply the principles well, in theory you can make a lot of money with this way of trading. However, only a fraction of investors succeed in making money in the long term by actively speculating on share prices.
Do you think you can become rich by actively trading shares on the stock exchange? Try day trading with a demo first, without any risk. That way you can find out if this way of trading suits you. Use the button below to open a demo account immediately:
Getting rich by buying shares
A strategy that works better for most people is to buy shares and hold them for a longer period. If you select stocks wisely, you can certainly become rich with them.
For example, if you had invested $1,000 in Apple in 2000, it would have grown to $160,000 in 20 years! More recently, you could have invested $1000 in Tesla. If you had done this in 2010, your assets would now be worth $231,270! As you can see, you can certainly become rich by buying shares: it is important, however, to select the right shares.
If you choose the wrong stock, you could easily lose your entire investment. Therefore, spend enough time researching the company you are considering investing in. Does the company have a good vision of the future? In that case, it can certainly be interesting to add the shares to your portfolio.
Especially when you invest smaller amounts, it is advisable to do this at a broker where you do not pay fixed commissions. Are you curious about the best brokers you can invest with against low fees? Then take a look at our comparison of brokers:
The lazy way to get rich with shares
Don’t feel like keeping an active eye on the stock markets? Well, I have good news for you! If you start early enough, you can also become rich with equity investments without having to spend much time on them yourself. You can do this by investing in an index fund or ETF.
An index fund or ETF follows a basket of shares and does not try to beat the market. When you reinvest the return you make over and over again, you will receive a positive return on that as well. The average return on shares is between 6 and 8 percent on an annual basis, which can be quite significant.
If you invest $1000 per month of your salary at an average return of 8%, it will take you a little less than 27 years to become a millionaire. If the market is a bit of a breeze, then investing in shares is a great way to become rich. If you invest just $200, it will take you 46 years. As long as you have enough patience and discipline, you can certainly become rich with investing in shares.
The trick is to deposit a fixed amount every month. In this way, you take the average return with you and are not faced with any nasty surprises. Remember that past results are no guarantee for the future.
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Are there any guarantees?
Absolutely not! Investing is about taking risks and seizing opportunities. You can lose (part of) your initial investment. Are you afraid and can’t bear the thought of losing money? Then forget the dream of becoming rich and choose a “safe job” and a savings account.
Are you willing to take the risk with the dream of becoming rich one day? Then invest with money you can absolutely afford to lose and get going. People who take action get further in life than those who do nothing.
Research always shows that shares are the easiest way to become rich. Elon Musk and Jeff Bezos did not become rich through their salaries as CEOs, no, they became rich through owning many shares in companies that became increasingly valuable.
No one has ever become rich by selling their time. Time is a limited resource, and you cannot scale your income. Even if your skills are of unknown value, there is a limit to your income. This limit (theoretically) does not exist on equity investments. That is why I invest a large part of my income every month in shares.
Make a good plan
If you want to become rich with stock investments, it is important to draw up a good plan. First, carefully examine how much money is coming in each month: you need sufficient cash flow to be able to invest each month. Is there nothing left over on the bottom line? Then there is no point in starting to invest. It is then important to first reduce your expenses or increase your income.
If there is money left over, then you can decide what amount you can and want to invest comfortably each month. Research what investment products exist and write a clear plan. When will you buy what for which amount? By making these kinds of decisions at a calm moment, you avoid making emotional decisions that reduce your return when the stock market is not doing so well.
Is 100, 200, 500 or 1,000 a month enough to become rich?
Are you wondering if you can become a millionaire with a certain amount of money by investing in stocks? We’ll be happy to help you on your way! With our tool, you can immediately calculate how long it will take to become rich with your stock investments:
The investering zal waard zijn:
Groei van investering over tijd
Investeringsbalans in jaar
If you would start one year later with investing you would have less than if you would start today.
Everyone has a different definition of rich, of course. Consider how much is enough for you and see how much you can set aside. That way, you can determine whether your goals are realistic. A tip of the hat: if you have to achieve a 20% return every year to reach your goal, it’s not going to work.
Avoid these mistakes if you want to get rich with shares
It is important to avoid hypes as much as possible. Sure, you can get lucky by buying a stock at the right time. But you can also be wrong and lose a large part of your investment. You can do what you feel like, but if you want to increase your chances of becoming rich, it is wise to focus on more stable investments.
It is therefore important to ignore the advice of others as much as possible. Your postman, mother or distant second cousin are not the best people to ask for advice. Investigate whether the person giving you “advice” has become rich through investing. If not, you have no good reason to listen to them.
In addition, never start investing before you have sufficient knowledge. Only invest in investment products that you understand sufficiently and first practise how everything works. You don’t jump into a swimming pool if you can’t swim, unless you really want to drown.
Try to keep your emotions out of it as much as possible: emotions are often a bad advisor. Emotions tell you to sell your shares when the stock market crashes, while that can be a good moment to buy more.
Finally, do not put too much emphasis on getting rich quick with shares. It is better to increase your chances of becoming rich than to hope for a miracle. That is why we go to church on Sunday.
Forget these myths about getting rich with investing
- I cannot invest: You may not be able to invest now, but investing is a skill that you can learn (perhaps with a lot of effort). Do you want to make an effort to become rich or do you prefer to stay poor all your life?
- You do it better yourself: are you a brilliant investor? Then this may certainly be true. For 90% or more of all people, it might be better to call in a professional.
- The rich are lucky: this may be true for that one lottery winner. You don’t get rich overnight; it takes a lot of perseverance.
- You have to time the market: with the principle of compound interest, you do not have to time the market; simply invest a fixed amount every month.
- I am too stupid: many famous and rich entrepreneurs never finished university. Putting money into an index fund every month is no more difficult than shopping.
- It is too uncertain: the only thing that is certain is that if you do not invest, you will never get rich with a job.
Is working for a boss smart?
Many people have been brought up with the idea that getting a degree followed by a job is the way to a rich and happy life, but is it really? Who enjoys going to work on a Monday? Is it really fun to do exactly what the boss wants you to do? Is it fun to be able to go on holiday only when the boss gives you permission?
I don’t know what your answers to these questions are, but mine are certain! However, many people cling to their permanent jobs because they say they have security. But how much security do you really have? How long would you survive without your job? Because make no mistake, as an employee, you are replaceable and in these economically turbulent times the chance of dismissal is certainly present.
Especially due to uncertainty
Ultimately, you can find more security in what we call uncertainty. Without taking risks, you achieve nothing in life. It is the people who are afraid to take risks who end up being hit hardest. The only way to potential wealth is by taking risks. You will fall, but the person who gets back up most often survives.
Losing as a skill
If you want to become rich without effort, you will have to learn to lose. The way successful people deal with loss is very different from the way poor people deal with loss. Many people fail at stock trading because they keep losing positions open (I’m afraid to lose, maybe the price will rise), and close profitable positions too quickly (imagine losing my profit).
To become successful, you have to do exactly the opposite. You cut off losing positions and keep profitable positions open until the direction has clearly changed. By applying this strategy effectively, you will increase your chances of success in stock trading.