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A lot of people think the stock market is too confusing and complex for them to even try investing. They know that others have made a lot of money in the stock market, but they tend to think that those results are only for the very wealthy or the very financially savvy. The truth is that you don’t have to be rich and you don’t have to be a financial wizard to make money in the stock market. You just need to save and invest wisely, and you need to have the right tools at your disposal.
Consider the case of Apple, the computer company turned personal electronics giant that is in seemingly everyone’s home now. If you had purchased stock in Apple back when the company was still selling its boxy computers, you’d have a lot of money now (depending on how much stock you bought). But you didn’t have to get in during those early days to make a nice profit from the stock. You just have to use the right resources. For example, monitoring NASDAQ:AAPL online or reading industry news stories on Apple can give you important insights into how the company and its stock is performing so you know when the best times to buy and sell are.
Educating yourself and utilizing the right resources will help you make the right investing choices. Here are a few things you can do to save enough to make those investments:
Set Up Automatic Drafts
You already have automatic drafts coming out of your paycheck, such as for your health insurance or your payroll taxes. Chances are, you don’t even notice that money missing. Sure, we’d all like to have a bigger paycheck, but not a lot of people look at those deductions and think about what they would do if they weren’t being taken out.
You can set up automatic drafts so that you are always saving, as well. You will have to set it up with your bank so that a certain amount is taken out of your checking account and moved into your savings account each month or every couple of weeks. You may set it up so that the draft is made on the day you receive your paycheck. Even a little bit will go a long way when you are consistent about saving. You’ll have a lot of money before you even know it.
Meet with a Financial Advisor
There may be a lot of fat in your budget that you don’t even realize is there. A financial advisor can help you go through every line of what you’re spending to help you identify areas where you can cut back. You may learn that you spent $1,000 on eating out last month, or you may find out that you are paying way too much for your car insurance. Your advisor can help you find savings on services and help you nail down a budget so that you get your personal spending under control.
You can then channel a portion of what you save into your investing. Again, even a little bit can go a long way over time.
When your stocks rise, you may feel compelled to sell them and do something nice, like go on a great vacation. Instead, use any profits from sales or dividends to re-invest in new stocks. You’ll grow your portfolio more quickly and reap substantial gains over time. That’s just how Warren Buffet went from being a budding entrepreneur to the billionaire that he is today!
Investing in the stock market isn’t just about getting rich. Over time, and with enough gains, investing can help you build some measure of financial security, which can give your family peace of mind and help you be prepared for unexpected needs that arise. Even small gains can help you do the things you can’t do now, like take that dream vacation you’ve been planning or buy the house you really want.
Just make sure you are using reputable online sources or broker to get your information or make your investments. Always keep your identity and your finances safe online so that you reap only the benefits of investing.
14 thoughts on “How to Save and Invest More in the Stock Market”
Most of my investing has been done automatically for the past year using Loyal3 and Fidelity. Easy and Stress Free!
The Dividend Mogul recently posted…Week 10: Loyal3 & Robinhood – Recent Buys (SDIV & MSFT)
Curious what you think of Loyal3? I’m eyeing them as a potential broker for upcoming investments?
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FYI, I just set up my sister–in–law with Loyal3. She has been watching what I have been doing with my own DGI portfolio and wanted in. She has very little to invest each month which is why I suggested Loyal3 to her. It was very, very easy to set up as well as create monthly automatic investments. For now, till she is ready to invest more cash, it’s set up to buy three dividend paying companies each month as $10 a pop. She is younger than I am and I think it is a great way for her to slowly build up a portfolio over time.
Thanks for sharing you personal experience. I really like Loyal3 for any investing newbie that does not have a lot of cash. With no commissions, low dollar amount minimum buys it’s easy for anyone to set up and automate an investing experience thereby slowly building up a portfolio of income producing assets over time. If Loyal3 was around when I first started I would have set up shop there. Thank you for commenting.
Yep, setting up the automation and deep dive your finances to find unlocked money you can save to invest is key. Staying on top of your budget, drilling down expenses and automation truly works wonders : )
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I think the bottom line for any saving or investing scheme is to have a plan. It may be sticking to a budget or automating your saving but whatever you do you must first have a plan of action and then execute. I always liked the concept of automation as it frees you from having to manually think about taking any action. As always, I appreciate your comment.
Great post, and I agree.
I love the concept of automatic savings. A little bit over time adds up to a lot. I’d take it even one step further and suggest that in addition to savings, there should be automatic investing. That way, the money comes out of the account and gets deposited in an investment account, which also can be then automatically invested. This will depend on the type of investing you want to do.
The stock market can be intimidating at first because there are so many different asset classes to choose from and different ways to invest with each asset classes. Choice is a good thing but sometimes too many choices can be daunting. Nowadays, with the advent of the internet, there are many free tools available to help beginner investors succeed. Free research is also available. I suggest that a new investor take the time to learn, but don’t wait forever to start. Start small, learn, invest, and grow.
Well said. The reality is that these days there is no excuse for anyone to not invest in the stock market. While automating savings is a good thing, I do agree with you that automating investing is just as important. I think we like to complicate things in our lives and sometimes fall into a trap of investing in things we do not fully understand. As you stated, there are a lot of investing choices out there but I think one can make a great case for sticking with the simple, understandable companies out there as as starting point. When you think about it all you have to do is open your medicine cabinet, pantry or fridge and see what items are already in your possession and consider those companies first. What you’ll find is a nice list of solid long term dividend paying companies like KO, PEP, PG, KMB, CL, CLX, JNJ, ABT, HRL, UL and many, many more. As always, I appreciate your comment.
This is a very similar concept to Acorns app that takes out money everytime you make a purchase. It’s good thinking because it really is money that you don’t see “missing” as you say but rather being put to another use.
If you have trouble saving, then setting up a system where you automate the practice becomes quite useful. Acorns reminds me of the practice of emptying your pockets each day of change and putting it in a jar. After a while, penny by penny you end up with a pretty substantial amount. Thank you for stopping by and commenting.
Every time I see a story which talks about the power of reinvested dividends I get excited. They keep me focused on being frugal and using all those savings to increase my stock holdings.
Other than my automatic retirement contributions, I manually put money aside for investing. It works for me, but I am apparently gifted in the willpower department.
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The more you feed the dividend growth beast the better off you’ll be long term. Like you, I also get excited reading about personal stories from the DGI community as well as about general methods for saving and investing. Do whatever works, right? Thank you for sharing your thoughts.
Hi, I’ve just stumbled across your blog for the first time, it’s great how you share everything. I don’t currently own any shares in listed companies but hope to in the future. What you say about “investing can help you build some measure of financial security” seems incredibly appealing!
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Whether you seek true financial independence or at the very least some measure of financial security, it usually comes down to being able to save adequately along with the ability to create a passive income stream. By doing those things you can relieve some of the potential financial stress that may come up in the future. Thank you for commenting.