Can stocks make you rich? - Financial Panther

The stock market offers appealing opportunities to build wealth, so if you’ve heard about all those people becoming millionaires from engaging in this market, you may want to give it a try, too. While it’s true that you can earn money from stocks, remember that with great potential reward comes significant risk as well, and you could lose some – or all- your funds, especially if you’re dabbling in short-term strategies or aggressive ones.

Many traders and investors end up losing money because they succumb to FOMO, or they end up being overconfident. If you don’t want to be part of that category, you need to keep your expectations straight and understand right from the beginning that the stock market doesn’t involve any get-rich-quick scheme, and a detailed strategy is required if you want to generate a profit from it.

Why getting rich from stocks is possible

The stock market offers tremendous opportunities for wealth-building, and with the right skills and mindset, you can embark on a path towards financial prosperity. While the market is known for its inherent volatility, stocks are still among one of the best paths to riches. However, you need to cultivate patience, as the secret to thriving in this market is to accumulate market returns over a longer period.

The stock market is irrational in the short term, but stocks of good companies tend to increase in value in time if the company keeps doing good business and earns well. The stock market moves in cycles: after a bull market, a bear market follows; however, good stocks tend to survive despite the market conditions, and their value continues to appreciate. Among the good stocks, some perform exceptionally well, which is why they are often known as market winners and spotting them early enough can set you up for success in your trading journey.

One of the best parts about the stock market is that you don’t need any qualifications to get started with it. You can begin anytime you want with whatever amount of money you want and grow from there. While it’s true that some brokers require a specific amount before allowing you to open a brokerage account, many give you the possibility to do so even with $0.0 – but you need to commit to depositing something monthly. Take the time to research and you will undoubtedly find a broker that meets your needs.

Tips to help you make money from stocks

We’ve mentioned earlier that getting started with stocks is easy, but that doesn’t mean everyone will become a millionaire by participating in this market. Some people make costly mistakes, and they end up facing massive losses. If you choose to invest in stocks, here are some things that can make your journey easier:

Understand how the market works

You cannot invest in a market that you don’t understand, so the first step is obviously to take the time to grasp the ins and outs of stocks. While you may find the stories of people getting rich from stocks very alluring, the reality is that only a few people become overnight millionaires off of a lucky stock choice. Rather than believing that will happen to you, learn everything you can about the stock market.

Understand what happens when buying a share, how the stock prices are determined, how to read chart patterns, and so on. If needed, collaborate with a financial advisor to help you make sense of this market, and remember to stay focused on your goals when trading stocks. Let the market work for you, and remember to keep calm during down periods.

Budget for investing

Budgeting your income is very powerful when it comes to investing, because it allows you to increase the amount of money you can allocate to stocks. Consider looking for areas in your life where you can reduce your spending – no matter the amount you already allocate to stock investing, cutting back on other spending could mean investing even more, which would give you more opportunities to profit.

The good news is that you don’t even have to save that much—just $5 a day would make a world of difference, as it amounts to $1825 yearly. If you have a hard time organizing your finances, consider getting the support of an expert.

Diversify your portfolio

Whether you become an active or a passive investor, minimizing risk should be your top priority, and diversification can help you achieve that. Simply put, it represents a strategy where you include a wide variety of assets in your portfolio, with the rationale behind it being that if one asset performs badly, those that perform well will neutralize the negative effect.

If you are an active investor, a good rule of thumb is to avoid choosing stocks that are closely linked to one another because they will respond similarly to market forces, and you can face catastrophic losses when the market has a poor performance. Don’t opt for stocks in the same sector or offering the same kind of services and consider including other types of assets in your portfolio as well, such as REITs, bonds, and commodities, to name a few.

Stay committed to investing in the long run

You may be tempted to dump your money into the stock market and think you’re done, but if you really want to build long-term wealth, you must continue adding money to the market. Make budgeting a habit and build the discipline to trade patiently and strategically.

Keeping a long-term perspective will help you avoid falling into the trap of trading emotionally, which is one of the reasons why many traders end up losing all of their money. Remember: getting rich requires patience, as it won’t just invest and wake up a billionaire the next day. If you adopt the right mindset and stay committed to your trades, you will likely profit from the stock market over time.

Trading stocks is an alternative to investing, but does it make you rich as well?

Trading tends to be psychologically demanding, and it requires a lot of time. While investing means that you don’t always have to look at your positions often, trading requires you to monitor them daily, given that you enter and exit positions more regularly. But that doesn’t mean you cannot get rich by trading stocks: you definitely can, but it may take more time than passive investing, for instance.

However, active trending often provides much greater profit potential compared to typical investing, so as long as you can take the risks, it may be right for you. As a beginner, swing trading is the best way to get started, allowing you to see if trading is for you before you step up your game to a more advanced strategy such as algorithmic trading.

The bottom line

Getting started with stocks can be a very rewarding experience, but it can also have dire consequences if you don’t avoid the common pitfalls that many investors and traders experience. So, make sure to have a plan in place that works for you, and remember to stick to it through good and bad times alike.

This post may contain affiliate links. Financial Panther has partnered with AwardWallet and CardRatings for our coverage of credit card products. Financial Panther, AwardWallet, and CardRatings may receive a commission from card issuers. Some or all of the card offers that appear on the website are from advertisers. Compensation may impact on how and where card products appear on the site. The site does not include all card companies, or all available card offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

More Recommended Ebike/Scooters

Check out these other ebikes and scooters I've reviewed:

Urban Arrow Ebike – Last year, I made one of the largest purchases I’ve ever made – I bought a $9,000 electric cargo bike from Urban Arrow. In my Urban Arrow review, I will discuss what it is and why I decided to buy this bike, as well as discuss how impactful a bike like this can be on your journey to financial independence.
Troxus Explorer Step-Thru Ebike – The Troxus Explorer Step-Thru is a fat-tire ebike that I’ve had the pleasure of riding for a while now. It has amazing power, great looks, and awesome range. If you’re looking for a great fat-tire ebike that offers a lot for the price, the Troxus Explorer Step-Thru is definitely one for you to consider. Check out my Troxus Explorer Step-Thru Review.
Hovsco HovBeta Ebike – The HovBeta is a folding ebike with great specs and a lot of interesting features, and importantly, it’s sold at a good price point. I’ve had a blast commuting with it and using it to do deliveries with DoorDash, Uber Eats, and Grubhub. Check out my Hovsco HovBeta Ebike Review.
Vanpowers Manidae Ebike – The Vanpowers Manidae is a fat tire ebike that I’ve been riding as my primary winter commuting bike and have also been using it to do food delivery with apps like DoorDash, Uber Eats, and Grubhub. After clocking in a decent number of miles with this ebike, I wanted to write a post sharing what my experience with the Vanpowers Manidae ebike has been like. Check out my Vanpowers Manidae Review.
Sohamo S3 Step-Thru Folding EBike Review – A Great Value Folding Ebike – The Sohamo S3 Step-Thru Folding Ebike is an entry-level folding ebike that offers a lot of value for the price point. I’ve been riding the Sohamo S3 for a while now, putting the bike through its paces, and I have to say, this bike has exceeded all of my expectations. Check out my Sohamo Review.
KBO Flip Ebike – The KBO Flip is an excellent bike. I’ve had a great time riding it and think it’s a versatile bike that can be used for a lot of purposes and can fit a variety of lifestyles. It’s worked out great for me as a general commuter bike and as a food delivery bike. Check out my KBO Flip Review.
Hiboy P7 Commuter Ebike – The Hiboy P7 is an excellent electric commuter bike that’s offered at an affordable price point. The range and speed of this bike are both very good, so you won’t have any trouble getting anywhere you need to go with it. As a food delivery vehicle, this is also good – with how much range it offers, you’ll be able to work all day on a single charge. Check out my Hiboy P7 Commuter Electric Bike Review.
Himiway Escape Ebike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
Espin Sport Ebike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
Varla Falcon Scooter – The Varla Falcon is an excellent scooter that offers a good amount of power at a lower price point compared to more powerful scooters. It’s not exactly an entry-level scooter, nor is it a high-powered scooter. I think it fits somewhere in-between those two categories – an intermediate scooter if I had to give it a category. Check out my Varla Falcon Review.
Hiboy S2 Scooter – The Hiboy S2 is an excellent entry-level commuter scooter that's perfect for someone looking to save some money in transportation costs and improve their commute. Check out my Hiboy S2 Review.
Hiboy S2R Scooter – The Hiboy S2R is one of the more interesting electric scooters I’ve been able to test out. It’s not a high-powered scooter, but for an everyday transport option, it’s very useful, especially given some of the unique features that it has. Indeed, for the price, the Hiboy S2R might be the best value scooter I’ve used. Check out my Hiboy S2R Review.
Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.

More Recommended Investing App Bonuses

For additional investing app bonuses, be sure to check out the ones below:

M1 Finance ($100) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with just $10 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
Webull (20 free stock shares) – Webull's current promotion gives you 20 free shares valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free shares using Webull.
Moomoo (15 free stocks) – Moomoo is a free investing app currently offering 2 different referral bonuses if you open an account using a referral link. Read my Moomoo referral bonus guide for more information.
Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.

More Recommended Bank Account Bonuses

If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.

Upgrade ($200) – Upgrade is a free checking account that’s currently offering a $200 referral bonus if you open an account and complete a direct deposit. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Here’s a post I wrote with more details: Upgrade $200 Referral Bonus – Step By Step Directions.
Ally Bank ($100) – Of all the banks out there, Ally is, without a doubt, my favorite. At the moment, Ally is offering $100 to customers who open an eligible Ally account and meet the requirements. Here are the step-by-step directions to earn your Ally Bank referral bonus.
Fairwinds Credit Union ($175) – Fairwinds Credit Union is offering a referral bonus for users that sign up using a referral link. Fairwinds has no fees or minimum balance, so this is a particularly easy bonus to earn. Since this is a smaller credit union, my gut instinct tells me this offer won’t be around long, so if you’re in a position to meet the bonus requirements, grab this bonus before it’s gone. Here is my step-by-step guide on how to earn your Fairwinds Credit Union bonus.
Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
US Bank Business ($900) – This is a fairly easy bank bonus to earn, since there are no direct deposit requirements. In addition, you can open the Silver Business Checking account, which comes with no monthly fees. Check out how to earn this big bonus here.
GO2Bank ($50) - GO2Bank is an easy bank bonus that I recommend people take advantage of if they have an easy way of meeting the direct deposit requirement. I like that it’s easy to open the account and that the bonus pays out quickly. Check out my step-by-step guide on how to earn your GO2Bank $50 referral bonus.
Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link. Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
Varo ($25) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $25 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.

Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.

Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.

Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:

SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
5% Savings Accounts. I'm currently getting 5.24% interest on my savings through a company called Raisin. Opening a Raisin account takes minutes to complete, it's free, and all of your funds are FDIC-insured. I explain how it works, why I'm now using it to store my emergency fund and any other cash savings I have, and why I recommend everyone check it out in this review.
US Bank Business. US Bank is currently offering new business customers a $900 signup bonus after opening a new account and meeting certain requirements.
M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account.
Empower. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.

Feel free to send Kevin a message here.