How to start investing in the stock market – The story of Liam

Audio version available: 

Warning: The advice in this lesson is not official financial advice. It is here for educational purposes only. It is recommended that you consult a  professional before making any financial decisions. We are not liable for any financial consequences the reader may experience. 

Once upon a time, there was an 18-year-old called Liam that wanted to get into investing. He was interested in making some money. So, Liam read books like The Quantified Fortune to understand how investing works and the do’s and don’ts of investing. After doing so, he put the information into action. 

Liam started out by figuring out the different types of stock and ways to make money from them. He had two options. Either he could buy the share of a company and wait for the value to increase then sell for a profit, essentially buy low and sell high, or he could invest in a company that pays dividends and grows his money slowly. 

In order to create multiple income streams, Liam tried doing both with his 1,000 dollar budget he had earned from doing chores for the neighbors. Liam invested a portion of his money to IBM, which paid dividends (a portion of its profits) quarterly. 

Then, Liam invested in penny stocks that he believed in. Penny stocks are stocks that are traded for under a dollar or for less than 5 dollars. Most of the time, the companies with penny stock are either going bankrupt or are undiscovered companies with potential. Liam tried finding the hidden gems. 

The Rewards…

After working hard and being patient, he was able to find a “hidden gem” with penny stock and buy a large portion of it. After the company became big, he made a great deal of money. However, he had to work very hard to get there and lose a lot of money before finding the right stock. 

Fortunately, despite losing money at times, his dividends from IBM kept steadily growing his money and giving him more to invest in penny stock. Liam’s strategy is one that can be implemented by almost anyone and one that can truly help you create a better financial future. 

Bonus Tips

You can use a platform like Robinhood to get started. In platforms like Robinhood, after registering and depositing money, you’ll be able to start investing in companies. Also, look out for events that can affect the demand for your investments. For example, once covid hit, it would have been in your best interest to sell retail stock and buy the stock of tech companies like Zoom.

Once you invest in a company, it is also wise to always check the market and constantly analyze your position to decide whether it will be better to sell or buy more of the stock. 

This lesson is from: The Quantified Wealth by Arian Adeli (Purchase on Amazon

Notice: The characters and events mentioned above are fictional 

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