For the average person, making money in the stock market is all about buying low and selling high. They think by doing that, they earn the right to call themselves investors. Well, I would disagree with that - they could be more properly called traders.
Sure, traders make serious money in financial markets - how many millionaires have been made in the stock market in the last bull season? I won't even dare to count. The thing is, these traders also put their money at risk by jumping at one stock after another, without real concern for whether the stock is valuable or not. PRICE is the most important thing for traders.
Normal fluctuations in price allow these traders to take profit anytime. The rewards sometimes outweigh the risk, but risk is very volatile as well - what is high risk for some, may be low-risk for others, and vice-versa. This difference in perspective has the potential to overturn the market.
So, why be a trader? The risks involved, not to mention the stress, are very much draining. The daily bustle of trading stocks also takes a toll on the mind and the body.
Investors, on the other hand, are very much relaxed, since they don't have to worry about normal price fluctuations. They don't panic when prices go down, since they know the actual value of whatever stock they are involved with. The only downside of being an investor is that you have to wait a long time to see results, depending on if you are in a rapid-growth industry or a mature, stable industry.
There is, however, a way to negate the time requirement. You can opt to create your own corporation, go public, and be the selling stockholder. This is how the biggest fortunes in the world has been made - Bill Gates sold his shares in Microsoft Corporation, Warren Buffet sold his shares of Berkshire Hathaway, George Soros sold shares in his Quantum Fund. So now you might be seeing ju
Having a business, therefore, is a necessary first step in being a real investor. It could be any business in any industry, as long as it is legal and profitable.
Once you have established this business, establish another using part of the profits of the first. It never hurts to have more than one business. When you have around four profitable businesses, you can incorporate. You can actually incorporate earlier if you wish so. The tax advantages are great.
After which you continue to grow the businesses until you feel confident to go public. Then you can coordinate with the SEC regarding your IPO.
When you're done with the IPO, start the process all over again. The more companies you have, the more capital gains you can enjoy in the future. It is in your hands.
If you believe you can start a business, go do it! IF not yet, go work at a business that you would like to replicate in the future, and get a feel for how it operates. When you're familiar enough, start your own business.
Remember, the world always rewards the most productive people. So go and be productive and don't waste any more time working for someone else than necessary. The more free time you have, the more opportunities you will be able to spot. It's a simple cycle of wealth.
Raymond de Asis is an entrepreneur and sales and marketing professional, currently working on his organization Mastermind 2012.Learn more about making money at his Mastermind 2012 Blog.
