People receive little information on stock market investment in our consumer culture in which we live which gives precise and continual information on how to consume and spend. Both consuming and investing involve expenditure of some type. The difference is that consuming implies assets you purchase going up in smoke. It is the instant gratification that we hear of.
Investing also involves expenditure, but the intention is asset building for the future, or wealth creation. Too often investing in the stock market can feel closer to consuming than asset building.
If you are interested in creating the freedom and peace of mind that financial wealth can provide, the answer is to accumulate assets that will provide a return in the future.
This means the cash you spend today comes back over future years. You are setting yourself up positively rather than negatively.
A tried and true manner of investing is the stock market. If the stock market is treated in a consumer-like institution, the investment will be made in the hope the price per share will increase, and so offer a good rate of return. This may or may not happen, it relies on speculation of the direction the stock market is going to move to be able to profit.
A more serious investment strategy will be to accumulate a portfolio of stocks. Rather than passively waiting for the share price to move up or down, the astute investor can choose to use share renting to provide a stream of income.
The stream of income the seller receives is the premium for the share renting. The time waiting for share price movement is not wasted. The time is used to receive a continual and dependable investment return. In particular, if the underlying price per share decreases, the share rental premium continues. This means the investor will have positive cash flow precisely at the time the stock market is down.
The investor can use this cash to purchase more shares, upon which another batch of share rentals can be sold.
While other stock buyers are passively waiting for the price per share to make them wealthy or broke, the savvy investor is receiving a stream of income regardless of natural stock market fluctuations.
These little differences in attitude and process can make the difference between failure and success.
A financially independent future is surely possible. You can be comfortably positioned for the carefree and secure life that is the dream of most people.
The best advice I can give as to the key to successful investing on the stock market is education. Investing in stock market lessons to fully understand how the stock market works before investing in the stock market is highly recommended. The cost of a good education is small compared to the potential gains and also the potential losses of not understanding what you are doing.
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