This episode kicks off a 4-part investing series sponsored by Motley Fool. Throughout this series, we’re going to talk about how investing can positively impact your financial situation, how to determine if you’re a long-term or short-term investor, tips for picking the right companies, and tools and resources you can use to research stock picks. Whether you want to earn more money, get out of debt, save for a vacation, or build generational wealth, investing in the stock market can improve your financial outlook and in this episode we explore how.
Ways Investing in the Stock Market Improves Your Finances
Table of Contents
In this episode, we chat about:
- Why investing is important
- Reasons to start investing in the stock market
- Benefits of stock trading
About Our Sponsor
Motley Fool Stock Advisor is a subscription service where members get (2) new stock picks sent directly to their inbox every month.
Motley Fool has been providing trusted investment recommendations for over 28 years and the proof is in the returns; beating the market by almost 5x. So if you’re ready to take aim at those financial goals, visit www.fool.com/TTC to get started.
1. Supplement Your Income
Learning how to trade is a valuable skill that you will have for the rest of your life. You can pass this skill down to your family or teach others.
Earlier last year my dad led a family meeting where he taught us about different aspects of the stock market. This gave us the confidence to start doing our own research and picking assets that align with our long-term financial goals.
Since I lean more towards long-term investing, I reinvest dividends to purchase even more shares, which helps build my portfolio faster.
What are dividends? Dividends are small distributions of a company’s profits paid out to shareholders. Not all companies offer this perk. Think of a dividend as a thank you card with some cash in it. When a company is doing well, they may say thank you by sharing a cash bonus with all those who invested in their stock. Most dividends are paid quarterly but some are paid monthly or annually.
However, not all companies offer dividends. Those that do not offer dividends typically reinvest their profits back into the company.
Read Next: Earn Passive Income Dividend Investing
2. Retire Early
Who said that you have to retire at 65 years old?
In episode 73, Jessica from The Fioneers introduced us to the Coast FI – the point where you no longer need to save any more money to have a comfortable traditional retirement.
This is possible through investing. Unfortunately, you cannot save your way to building wealth. It’ll take way too much time and we have things like inflation working against us.
3. Build Generational Wealth
How would your life have been different if you inherited a fully paid off family home or $100,000?
Perhaps I wouldn’t have accumulated $60,000 of student loan debt or maybe I would have already purchased my first rental property.
If you want to pass down generational wealth to your loved ones, investing in the stock market can help you earn more long-term – it gives future generations a head start.
Listen to Episode 31 where Acquania Escarne shares how she’s leveraging real estate to build generational wealth and ways you can intentionally leave a legacy behind for your family.
Trade and Travel (investing course): Learn how to supplement your income by trading in the stock market with Teri Ijeoma.
Broke Millennial Takes On Investing (book): Tackling topics ranging from common investing terminology to how to handle your anxiety to retirement savings and even how to actually buy and sell a stock, this hands-on guide will help any investment newbie become a confident player in the market.
You’re a Wealth Heiress! Now Think and Act Like One (book): Learn how to live your life to the fullest by creating spending priorities, discovering the secret of cycles, and tapping into the power of compounding.
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Danielle Desir Corbett paid off $63,000 of student loan debt in 4 years, bought a house at 27, and has traveled to 27 countries, including her favorites, Iceland, China, and Bermuda. Go here to learn Danielle’s incredible story, from struggling financially and in debt to finding creative ways to earn more and live on her terms. Listen to The Thought Card Podcast, where Danielle shares how you can creatively travel more and build wealth regardless of your current financial situation. Reach out to Danielle by contacting: thethoughtcard (at) gmail (dot) com.