That’s my secret trick: if you never earn enough money to be able to afford to invest, you lose nothing when the market crashes
if you never earn enough money to be able to afford to invest
That’s a misconception. You can now buy shares in fraction depending on the investment platform. You can put however much money you want. Of course, the fewer shares you buy, the fewer the returns should the stock price increase (and fewer losses if share price goes down).
Being broke is a misconception?
You can still invest $10 in a share price of $100, which means you own one-tenth fraction of a share. Even a broke person have $10 (unless you’re homeless, which is understandable, saying “I’m broke” is most of time a hyperbole and does not mean you only have your clothes on your back).
I’m surprised I’m the only person yet on Lenmy who corrected that you don’t have to be rich to buy shares to invest; usually someone would have done so almost immediately when it comes to this thing. Even a blue collar worker throughout his entire career can be a shareholder with 97 holdings and eventually become rich, like literally.
The problem isn’t actually not being able to invest, it’s not being able to meaningfully invest.
If you have $10, you can throw away. $10 doesn’t mean that much to you. So let’s say you sock it away into a decent stock. Let’s get edgy. Let’s pick something that’s going to double in a year. A year goes by, you have $20. Now you can really afford that carton of eggs.
Investing at poultry levels doesn’t mean anything to you because it’s not enough money to do anything with. You generally need to be socking away 10-30% of your income to get anywhere significant enough to retire.
The argument that you can invest because you can afford to spend $10 is as useless as investing $10.
But if you did your research well and leave the $10 in a stock with huge potential growth in the future, that could triple or even grow to one hundred percent in years if not decades. Of course, if you really need the money, simply don’t invest.
Another person replied to me and mentioned about debt. I hadn’t initially consider it because in my country, debt crisis is not really an issue unlike in the US or elsewhere so I didn’t mean to be callous. If the person have debts and really need every penny and cents count, of course pay them off first before starting to invest; I’m not a financial advisor but that’s the general advise that a qualified person will also make.
My very first comment is a counter to the idea that you have to be extremely rich or an institutional investor to start investing, which has never really been the case. You can start investing with any amount you can afford.
You cannot meaningfully invest without at least a few hundred spare dollars. Expecting a multi-hundred-percent increase is not realistic.
You can treat it like a pension fund or savings account and put however amount every now and then, and let the power of compound interest work. If you read the Wikipedia entry on Ronald Read that I linked, that’s what he did. He also redistributed the gains and dividends to buy more shares on another stock. And he was a gas station attendant and then a janitor who eventually made $8 million by the time he passed away.