Why Stock Investing is a Traveler’s Dream Job – And How You Can Learn to Work Part-Time
The market used to be men in suits, shelves of ledgers, newspaper, yelling into the phone to buy or sell. It was a very elite club. Luckily the internet came along, and with it online trading platforms, news websites, streaming stock quotes and a host of other great tools for stock traders of all levels. The club today is much bigger – and you’re invited!
Most people view the stock market as this mysterious risky machine where you put in your money and cross your fingers that it all doesn’t evaporate before your eyes. Especially these days with all the hubbub about the financial crisis, sup-prime loans, Fanny Mae and Freddie Mac, Madoff, and all kinds of other bad press that has plagued the financial industry the past couple years. Even today I heard an ad on CNBC radio telling people “you’ll lose you’re hard earned money in the stock market! Instead buy our product X and we can promise steady returns for the rest of your life!” There has been a lot of doom and gloom rhetoric going around, but it’s really not that scary. Contrary to popular belief, most people can learn what makes the market tick, and more importantly, how to make money from it.
I’ll begin with the preface that I am in no way an expert in the way of the equity market. In fact, I’m probably in the bottom 25% of traders in terms of knowledge. Still, I have managed to make money from it, and so can you. I opened my E-trade account with $1,000 at 21 years old in March of 2010 after watching the market for about 6 months and making “trades” on paper to see how I did (risk-free) as time progressed. I’ve learned quite a bit since then and want everyone to know that the stock market is not only for the financial elite and the wealthy.
If you’re interested in trading in the stock market and have no prior experience (like me), I have a few suggestions:
- Read “How to Make Money in Stocks” by William J. O’Neil. Then re-read it a few months later. You’ll discover and rediscover some powerful insights you may have forgotten or missed the first time. Rinse and repeat as necessary. If you really have no background knowledge read Jason Kelly’s “The Neatest Little Guide to Stock Market Investing” first. It offers a great crash course in easy to understand language.
- Learn the terms. Journalists and commentators use a number of intimidating terms that are really not that complicated once you understand them. The world of market commentary opens up when you get a grasp of the vocabulary.
- Watch the market and stay up on the news. There’s no better way to see how events affect the market than watching it happen in real-time. CNBC news is pretty good, including the obnoxious but wise Jim Cramer of Mad Money. Other independent websites like The Motley Fool have quite a bit of interesting news that may not be on more mainstream CNBC or thestreet.com. Look around, there is a lot of good information out there if you spend a little time searching.
- Make fake trades. See how you’ll do without risking any of your hard-earned cash by recording trades either on paper or through free web services like Yahoo! Finance.
- Read another book on stocks. There are quite a few good ones out there. O’Neil’s is a little more old-school, based more chart trends and technical analysis, so find another one that takes a different approach. Or better yet, one that totally refutes technical analysis. Make your own opinion on the opposing arguments.
- Open an account with E-trade, Scottrade, or any of the other online brokers (read reviews first to see what fits your needs) and go! The best way to learn is through action. Once you feel you’re ready it only takes a few days to open an account and transfer money into it. Most sites offer around 100 free trades for the first 90 days, so be sure to take advantage of promotions.
I won’t offer too much advice other than how to learn, but don’t get over-confident, don’t be a gambler, and don’t get greedy. There’s a reason the phrase “bulls make money, bears make money, but pigs get slaughtered” is so popular among traders – it’s true. Also, be careful not to over-trade when you first get started. It’s tempting and easy – especially with the free trades – but $9.99 commission fees will eat you alive if you’re trading like crazy when the 90 days/100 trades run out.
Why the Stock Market is Awesome for Traveling
Internet cafes are great places to catch up on stock news
If you’ve got some cash saved up and you’re using some of it to travel, let the rest earn money for you! If you’re comfortable with investing and have enough internet time to keep up on the current financial news, keep some of the money you don’t need in your bank account invested in a mutual fund or equities. It’s a great way to earn money while you’re running around spending money. Just the past few weeks I’ve made around $400 with the extra $4,000 I don’t need immediate access to. Enough to cover my 5 day vacation in Dahab, Egypt plus some. Again, don’t forget that you can lose money just as easily as you make it. Whenever you’re trading think about your own risk appetite and what percent of you’re funds you can stand to lose.
Have any tips of your own for beginning traders? Share your thoughts and leave a comment below!