Buying shares has always been a good investment option since its inception. Although, like every investment opportunity, there is a risk to it. Today, I’m going to share with you how to make money buying/selling shares online as a total newbie and how to manage the risks that come with it.
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But first, we have to learn the generic keywords that are used in this niche market. They are shares, stocks, and equity.
Although they are used in the same context, they are not the same. Here are some key differences between shares, stocks, and equity.
Table of Contents
How To Make Money Buying/Selling Shares Online
Key differences between shares, stocks, and equity
Shares
When the capital of a company is divided into small units, these small units are called shares.
Shares are units of ownership of a specific company. Since they were divided, they each have equal amounts per unit and they can be partly or fully paid up.
Example: You can own 10 Microsoft shares.
Stocks
Stocks are the collection of fully paid-up shares into a single fund. In other words, stocks are portions of ownership of multiple companies. You can have stocks of unequal amounts.
Example: You can own stocks in Microsoft and Tesla.
Equity
Equity is a term for the sum of ownership stake in a company. If a Tesla had 50,000 shares for example, and you have 10,000 of them, you can say that you have a 20% equity, stake in Tesla.
How do shares work?
Here’s how to make money buying/selling shares online. When you buy a share in a company, you become a shareholder meaning that you literally own part of that company, so you will partake in the profits and growth of that company.
The profits you’ll receive are called dividends. But receiving dividends is not the only way to make money buying/selling shares online.
You can trade shares/stocks in the stock market to investors. You could make a fortune by trading stocks. But that depends solely on the market value of the stocks and how much investors are willing to pay for them.
Buying Shares
To buy shares, you need to go through a stockbroker. Gone are the days when you have to walk into a company to start filling out paperwork and going through stressful processes.
There are now online stockbrokers that allow you to buy, sell and trade stocks from the comfort of your own home/office.
The key is to buy with the lowest selling price and sell at a higher price.
Selling Shares
In selling a share, you submit the price you want to sell the share on the stock exchange and the quantity available for sale. Buyers will offer to buy the share at different prices and you can sell to the buyer offering the highest price.
When the lowest selling price meets the highest buying price, a deal is done.
When you do this multiple times and for different shares, then congratulations… You are a stock trader.
Tips on trading stock
- Don’t be emotional: Trading stocks is not for the weak or feeble-minded people. Being emotional gives room for critical mistakes that could cost you a fortune.
- Learn and learn: Before you start trading stock, you need to have in-depth knowledge of the stock exchange. Learning will help you know profitable investments and help you make better buying decisions.
- Don’t invest money you can’t afford to lose: This is the number one rule of investing (Investing 101). However, you should know when to take risks. Analyze the market and think it through before you buy (go long) or sell (go short)
How to start trading stocks online
You can start trading stocks online by creating an account with an online stockbroker or via an app like Chaka
Chaka is a go-to investment platform for African businesses and individuals. Chaka gives you access to trade with over 4000 global assets from the U.K, U.S, Nigeria, and 40+ more countries. It even has access to the New York Stock Exchange (NYSE) which is one of the biggest stock exchanges in the world.
The best part about Chaka which I love personally is the fact that you can actually start trading with a minimum investment of $10 or N1,000.
With Chaka, you can buy shares at affordable prices and hold. Receive dividends on your stocks and trade them if you please.
How can I begin my trading journey on Chaka?
You can start investing on Chaka with 3 easy steps:
- Download the app to create an account.
- Fund your digital wallet.
- Invest in any portfolio of your choice – either foreign or local.
Requirements to start investing:
To invest on Chaka, you will be needing the following:
- Your name, phone number, and email address
- Bank verification number (BVN)
- A valid means of identification
How much can you make trading stocks?
This factor is key when it comes to how to make money buying/selling shares online.
However, the amount of money you make trading stocks depends on how many stocks you own, the value of shares you buy, and the amount of money you are investing.
To help you make better investments, there is a feature in Chaka called SmartInvest.
SmartInvest by Chaka is the easiest way to save and invest in dollars. SmartInvest is the only platform that offers you a dollar mix of US Stocks, International Bonds, Real estate, and Commodities all in one portfolio.
It works in three simple steps:
- You answer a few questions to help their experts understand your goals, timeline, risk profile
- The expert wealth manager recommends a portfolio tailored to your risk profile and goals
- You fund your portfolio and watch your money work!
Final Thoughts
Now that you have key knowledge on how to make money buying/selling shares online, you can easily expand your income and let your money work for you.
That’s all from me on how to make money buying/selling shares online.