Capital or Price Appreciation

Since I already discussed the first way of earning from Stock Market, in this post you will learn the second one. It is called "Capital or Price Appreciation".

Traders, not investors, know this very well. They buy shares at a lower price of a certain company and once it went high, they will sell it immediately. That's how they gain or profit from stock trading.

When It Comes to Your Finances, Everything Should Be Automatic

I would like to share with you the knowledge I got from David Bach's book entitled "The Automatic Millionaire". I learned that in order for us to be rich and have millions in our retirement years, the only thing we should do is to make our cash flow automatic. What I mean by this is before you get your salary from your bank account, it should automatically transfer a certain amount that you set once into your other account that is made for that purpose. In that way, you will never get a chance to withdraw or feel guilt to spend all your money because you've already saved money in the first place. That principle is called "Pay Yourself First".

Invest Your Hard Earned Money In Mutual Fund

Don't have time to explore and invest in the stock market? Then, a mutual fund is another option when you want to grow your extra money. But let me define what mutual fund is. Basically, it is a type of investment wherein you and other investors pool or put their money together to be invested by a professional fund manager into different financial securities such as stocks, bonds, or money market instruments. In order to profit from it, you should invest your hard-earned money every month for 5-10 years. Why did I say that is because there is no safe investment. So in order to cut losses you should acquire more NAV or Net Asset Value (equivalent to number of shares in stocks) regardless if you bought it higher or lower because at the end of your investing (let's say your target year to withdraw your money is on the 5th year) is still based on what will be the price of your NAV at that time multiply by the number of shares you've accumulated. It's the same as stock market. The higher the price of a share, the fewer you can buy and the lower the price, the more you buy. Think of that concept at all times. Or you can read a definition of it from this site:

"The value of a share of the mutual fund, called the Net Asset Value (NAV), is calculated daily based on the fund’s total value divided by the total number of outstanding shares."

A Valuable Lesson I Learned From My Younger Sister

First of all, I don't intend to prolong this post so I will tell you a lesson which I learned from my younger sister. And that is the consistency of stock investing. I would like to tell you that I was the one who influenced her to invest her money in the stock market due to the possibility of earning profits is high. But you know what, if you ask me how much money she has there compared to mine, she has already exceeded what I already invested. Why? Because I did not place my money there in a monthly basis and was not consistent at all. She as if slapped me on the face and showed me what I should do in the first place.

Walk the Talk

Some people are good in expressing themselves esp. when they feel the spotlight on them. What I mean is they love talking about something and be heard by their friends. They want to be perceived as an expert or someone who knows what he/she is talking about. There's nothing wrong about that as long as we personally experience what we shared or really do what we preach. It's easy to teach and give orders but are we really acting on it. If we don't, then we have no rights to stand in front of others speaking with a bulging chest as if we know it whole-heartedly.