Stock Investing by Alvin Williams by Alvin Williams - Read Online

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Stock Investing - Alvin Williams

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About the Author

My name is Alvin Williams and I am a professional trader and investor. I have always wanted to understand the language of money and to grasp the tactics that rich people use to accumulate wealth. At first, I thought that they were just lucky. However, after reading Rich Dad Poor Dad by Robert Kiyosaki, I was forced to change my mind. There is a reason why riches keep getting richer and poor people tend to stay broke for their entire life. I dedicated my life to finding this reason and to share it with others.

After attending seminars all over the world, a friend of mine asked Alvin why don't you write a book about it? I really think other people could benefit from what you know. At first, I was a bit sceptical. I mean, why should others seek advice from me, when there are hundreds of other gurus around? However, after reasoning on it for a while, I came to the conclusion that I had something different: I actually did invest myself. You see, it is so easy to find books and videos by authors that claim to have made millions of dollars, as if it was the simplest thing in the world. I do not even try to claim to have earned so much money. I mean, do not get me wrong, I have made several hundred thousands dollars in my life, but I have yet to come close to the two comma club. Why am I saying this to you? Because I believe in honesty and building trust. After all, I have started writing book as a hobby and I do not need my customers' money to survive. This is what gave me the confidence to stand up and speak my truth: I hope you appreciate it.

Enough of me, now. It is time to get down to business and start learning!


Congratulations on downloading Investing for Beginners and thank you for doing so.

The following chapters will discuss what investing is and how you can get the most out of your money by letting it work for you. When it comes to making an investment, there are a lot of things to consider and this book wants to get into details about every aspect needed to take conscious and smart investing decisions.

This book will provide you with 30 valuable lessons, given by the best investors in the market. Not only that, though. It will also give you a complete overview of the most famous investing opportunities and an in-depth list of the 15 mistakes every beginner makes and how to avoid them.

The goal of the book is to speed up your education and save you time and money along the way.

Before getting started, it is important to note something about mindset. This, as the other books in the series, do not offer get rich quick solutions, since they do not exists. Especially when you are beginning your journey in investing, it is fundamental to focus on learning and acquiring new information, rather than just chasing money. With the right knowledge, results will come much faster and you will be amazed by what you can accomplish, even with a small capital. The book wants to give you the tools you need to get started and share with you some of the golden nuggets that made other people wealthy. If you study this material carefully and start applying it, you will lay out the foundation for prosperity and wealth.

There are plenty of books on this subject on the market, thanks again for choosing this one! Every effort was made to ensure it is full of as much useful information as possible, please enjoy!

Chapter 1: Investing or Saving?

Very often the concepts of saving and investing are confused, as well as that of saver and investor. However, there are substantial differences that need to be understood, before diving deeper into the subject of money.

In this first chapter we will explain what saving and investing are, analyzing which choice is more convenient today.

Saving means taking out a portion of income received, that you deliberately choose not to consume immediately, but to store in a bank account for the future. Saving often results in the tranquillity guaranteed by the availability of resources to deal with unexpected situations.

Savings can then be allocated to investment, and this is the main analogy between the two concepts. The investment may be of the economic type (such as the purchase of a car or a company machinery), or of the financial type (such as the purchase of a security or mutual fund with the objective to see capital grow over time). However, unlike savings, in the case of investing, the achievement of the desired objective is not certain (for example, a stock may lose value), so the result can be negative, compromising the amounts saved.

Which is better?

If the question that arises is whether it is better to save or invest, the answer is probably both. The choice depends on your financial situation and your personal goals.

Savings can be used to invest, but can also be used in other ways. In fact, the money saved can also be deposited in the bank to reduce risks (theft). But this, unlike what many think, is a wrong and unprofitable choice: money, in fact, tends to lose purchasing power over time due to inflation. In other words, if you save 100 Dollars today, in 20 years you will be able to get less out of that money than today. This is why saving money is, often, the wrong choice if you want to get wealthy.

Assuming an average increase in the cost of living around 2% and a saved sum of 5,000 Dollars, in five years this sum will fall to real 4,500 Dollars, that is 10% less (excluding banking taxes!). Obviously, you can keep the savings at home (under the classic mattress!), But with all the risks that come with it.

What is the difference between investing and saving?

Let's repeat it once again to get it better. Saving means to put money aside little by little in order to accumulate a certain sum. Usually you save for a certain goal, like going on vacation, buying a car or for emergencies that could happen.

Instead, investing means taking a part of the money to make it grow, buying tools that can increase its value like shares, houses, funds or ETFs.

Who should save?

Obviously everyone should try to save a part of their money. The rule is to have away on your bank account at least the necessary to survive for three months and cover the main expenses (such as food and rent). This will offer air pocket, in case of inconvenient and unexpected situations.

Saving is therefore a rule and as every good rule has its exceptions. You can in fact stop putting aside the money when:

you have too much debt and you are trying to pay it off;

the family has priority and could not go on in case of unfortunate events to one of its members.

Even when you have set aside enough for emergencies, you do not have to stop saving. The goal of everyone should be to put aside at least 10% of their salary every month, perhaps starting from 5% and gradually scaling up. To make things easier, you can save money by thinking of any objective, like having enough money for a great honey moon or to get a new car.

Having a goal is essential, so you know what you're saving for. Every reach person has financial goals, so it is a good habit to pick up.

When is the time to invest?

Like when you save money, you need to have a goal to when and how invest your savings. In this case, it is important to know what your short, medium and long-term goals are.

With short term we mean goals for the next 3 years;

With medium term, things are planned for the next 3-10 years

The long-term goals are those for which you will not need the money back for at least 10 years or more

For short-term objectives, you usually invest through deposit accounts, which allow you to get a minimum return in a short amount of time. However, this has been a bit shrinking in the last period (deposit rates are at the lowest). For the medium-long term objectives it is instead advisable to invest in the market, to avoid the reduction in value that inflation produces on still money. The market guarantees usually higher returns than deposit accounts over longer periods and having a well-constructed portfolio helps