I know you are probably wondering, how did she make such an amount within a year? How I made $35000 in the stock market was simple.
It was exactly two years ago when my husband pitched the idea of investing to me. At the time, I had no interest, because of the fear of losing money just like many people. He started investing years before, and after months of convincing and reading several books, I was ready to take on the challenge.
401K
I have multiple investment accounts. One of the easiest ways you can start investing is through your employer’s 401k plan. Now, you may ask, what is a 401k? I will explain to you shortly, but before that, let me get into how I made $35,000 in the stock market within a year.
For starters, I made sure to learn about my employer’s 401k plan. I also understood the maximum amount I can contribute towards my 401k in a year (the maximum is $19,500 in 2020) and, if you are 50 years or older, the maximum for 2020 is $26,000. What does all of this mean? So let’s say you make $60,000 per year, you are allowed by the IRS to contribute $19,500 towards your 401k with no questions asked.
A 401K is a retirement account sponsored by employers. It provides a tax-break on money an employee set aside for retirement. The two types of 401K plans are ROTH and traditional 401K. The main difference is either you owe Uncle Sam money now or later. (read more here)
With 401K, your employer typically matches dollar for dollar or 50 cents per dollar. For every dollar you contribute, you receive a dollar or 50 cents from your employer. Some employers may match up to 6% (varies) of your contribution. I took advantage of this and maximized the amount I contributed, and it resulted in a high yield return. Find out from your HR person about your employer’s match. The match from your employer is free money folks! So take advantage.
MUTUAL FUNDS
Besides the 401k, I also invested in mutual funds. Mutual funds are investment accounts typically managed by a professional. A mutual fund is one of the easiest and least stressful ways to invest. Before I pick, I check for the fees to make sure that it makes financial sense. So how, did I do it? Every month, I had a specific amount that went directly to my mutual fund account at Charles Schwab.
How I Made $35000 in the Stock Market-INDIVIDUAL STOCKS
Lastly, I also invested in individual stocks. Now, those are riskier compare to the 401k plan from your employer and mutual funds. I use an app (Robinhood) to do all the trading. For that year, I researched the companies I was interested in and got started. The first stock I purchased on the app was Tesla. I am currently making three times the purchased price. The price per share was up five times the purchased price. Due to the coronavirus, the stock market has taken a hit. Do not let that keep you away from investing. Remember, you are investing in the future. So do not let today’s outcome affect your future.
If you want me to help you to start investing, subscribe and fill out the contact form below to let me know your interest and I will be happy to provide a quick 15-minute session to explain the beginner’s basics. If you think someone else can benefit from this post, please share it with them.
Until next time!
Disclaimer: I am not a financial advisor. These are my own opinions and the way I invest.
Wow. That is so awesome. Thanks for sharing all these tips! Very useful information!
You are very generous with your time. I’d love to take you up on your offer but right now i”m staying out of the stocks for a bit. I may come back to you though (thank you!)