If you’ve ever wondered why you should invest in the stock market, this comprehensive guide will provide the answers. We’ll dive into the benefits of stock investing, from ownership and dividends to the magic of compound interest. Let’s explore how platforms like Whale can help you navigate the market and achieve your financial goals.
There are usually three ways to profit from the stock market;
When you invest in the stock market, you become a shareholder in a company, entitled to a portion of its profits and assets. Your invested funds work for you even while you sleep, and as the business grows, your stock increases in value over time. Diversifying your investments across different companies can also help reduce your risk.
Dividends are a distribution of a company’s earnings to its shareholders, typically paid out quarterly. With average dividend yields for stocks ranging from 2-3%, dividends provide a steady stream of income for investors. Over time, they can contribute significantly to your overall returns.
The stock market has an average annual return of 10% since 1974, outpacing inflation, savings accounts, treasury bonds, and most real estate investments. With consistent returns, a $10,000 investment today could grow to $452,592 in 40 years. Platforms like Whale aim to achieve a 20% yearly return over a 5-year period, making these numbers even more attainable.
Compound interest is the process of earning interest on your investment, reinvesting that money, and earning interest on the new total. This snowball effect can lead to significant gains over time, making it a long-term investor’s best friend. The longer you invest in the stock market, the more profit you can make.
Even if you don’t have a large initial capital, you can still invest in the stock market by starting small. For example, investing $100 monthly for 20 years would result in a total deposit of $48,000 and a total return of $550,000. The key is to start early and let compound interest work its magic.
Understanding why to invest in the stock market is crucial for achieving financial success. By leveraging the power of dividends, stock value appreciation, and compound interest, you can grow your wealth and secure your financial future. With the help of platforms like Whale, you can navigate the market with confidence and ease.
The best thing you can do for yourself is to start investing early and let compound interest work its magic! Let Whale take you to your dreams. Here is a quick summary;
A dividend is a distribution of a company's earnings to its shareholders. Dividends are typically paid out quarterly, though some companies choose to pay them out more or less often. They can be issued as cash payments, as shares of stock, or as other property. The average dividend yield for stocks ranges from 2-3%
When you buy stock shares, your investment value increases over time. You can sell the shares for a higher price than you paid and collect profits.
The stock market return has averaged around 10% annually since 1974. This type of return beast inflation, savings account interest, treasury bonds, and most real estate investments.
Let's put it this way; with an average of 10% yearly returns, $10.000 invested today can turn into $452,592 in 40 years.
Even better, if you keep investing $100 on top of the $10.000 initial capital every month, the total return will be $1M in 40 years.
Whale aims 20% yearly return over at least a 5-year period, as long as you stick with Whale alerts and be consistent, these numbers are easily achievable.
Compound interest is when you earn interest on your investment. Then you reinvest that money and earn interest on the new total. This is the easiest way to make money over time because your money is working for you and snowballing over time. Hence compound interest is the best friend of long-term investors.
This also means the longer you wait, the more profit you make. Therefore investing in the stock market is not so much about your starting capital but more about how long you stay in the markets.
Even if you don't have the capital to start off right away, what you can do is start small. Let's crunch some numbers to see starting small can take you;
Let's say you start investing $100 monthly; over the next 20 years, your total deposit will be $48.000. However, your total return will be $550.000!