The idea behind this piece is to share thoughts on what stock market is. Well then, I thought why not use the principal of inversion and explain what stock market is not. It is easier to explain what it is not and helps me use the simplicity principle.
Let’s dive in:
Not a get quick rick scheme: In no way is the stock market a place to get rich quick. If anyone tells you otherwise do yourself a favor and avoid listening to that person. Just hammer it in your mind that if it were so easy everyone would become rich overnight. Think about why the person is sharing the tip with you if it really works & is easy. It takes a lot of patience, courage, knowing yourself and hard work to build wealth. Above all it takes time.
It is like watching the seeds you sow grow into a plant and bear fruits. The road is bumpy and time consuming. It will test you every now and then. It is akin to building a house where you have to lay a foundation (investing philosophy), lay brick by brick (additional capital & reinvestment of profits) and cement (patience to hold).
Not akin to Gambling: Investing is far from gambling because it is the house that always wins in gambling unlike investing. You don’t blindly put your money in companies as you do in gambling betting on numbers. You have to have some process and conviction to bet big. No, X told me to invest in this company and he is my friend I trust him doesn’t work.
Your money is your responsibility because both upside and downside would affect you and your family only.
Not a place to get yourself some entertainment: I feel so excited I have invested 50,000 in XYZ script. I am so happy my stock moved 10% today. I had spare 50,000 let me invest in penny stocks what the worse that could happen. If this your thought process before investing please donate the money give back to the society at least it will have some utility.
It is better to go gambling if entertainment is all that you want and it is okay as long as you only take a small portion that you can afford to lose for gambling.
Ps: I was having a hard time thinking about a topic to write on. Spent entire week but couldn’t come up with anything. I got this idea while I was out on a run. So a pro tip if you’re finding it difficult to get ideas or work go out in the nature run or walk or simply stare at the sky you might stumble upon something.