Investing in the stock markets is a viable way to build wealth

by - August 22, 2016

Growing up in Soweto, I knew nothing at all about shares and financial markets and the economy. It wasn’t something that my family had exposure to and the investment world was outside of our frame of reference. I also wasn’t curious enough about finances and I had to learn on my own.

I learned that if you want to create wealth, you have to invest in the stock market. Sure, you could start a billion-rand company, invent something awesome or win the lottery. Even if you hit a jackpot in one of those three ideas, you still need your money to work for you and not just sit in your bank account doing nothing. And that's where investing comes in. When you invest, your money it is planted in areas where it can really grow and flourish. The beauty of investing lies in compounding. Compounding means your money is generating more money by earning interest on interest. So that means your money grows at a faster rate than with a simple interest.

As women, we are finally gaining financial footing, so let us also build our wealth. Our fear of investing is holding us back. And if investing looks complicated it is because we don't take the time to understand how it works. But thanks to technology today, anyone can learn and start investing in listed companies and make money in the process. If you take the time, you can get a wealth of knowledge from various sources. The important thing is to start.

I found the best way I learned was by asking questions. There are a lot of knowledgeable people around and on social media too. And I also learned by having practice runs with demo trading platforms. Almost every bank has one. I did pretend investing for about 6-8 months before I entered with real money. I’m not sure how much it helped, but I am Ok with it now. This was great because it helped me to deal with the possibility of losing money and  how to deal with the loss. I'm still learning and growing.

And no matter how much you educate yourself, eventually you just have to jump in and start doing it. When I started investing, I read a lot on investing websites. I used companies like Satrix which makes it really easy to invest on the stock market. All you need to do is put in R300/month or a once off lump sum of R1000 into one of their products to get started. They also have really cheap prices and you don't need anyone to do this for you. They do all the work for you.

One of the most common answers I receive when I ask a woman why she keeps all her money in a checking or savings account is, “I’m afraid of losing money.”

I understand the fear.  But if you are not investing you are losing money.  The old days of putting your money in a savings account and watching it grow is over. Yes, time and compounding work magic, but when you are starting with an interest rate between zero and 2 percent, you can’t expect much. And if the interest rate paid to you is less than the rate of inflation, you are losing money over time due to inflation. Unlike saving, investing offers you the opportunity of keeping up with inflation.

Maybe you want to invest but you feel that you don't have enough money. That is understandable. It really doesn’t make sense to start putting money away if you can’t even meet your basic needs. However, I'm a firm believer in the mantra "every little bit helps", and that changing your daily habits can yield huge benefits for your financial health in the long run. I started investing with only R300 and grew that over time.

So, think of investing like drops of water in a bucket. Drops of water, like small changes, accumulate over time and eventually the bucket will overflow. And so that is what happens when you invest. Over time, your wealth will add up.

So this is my advice: instead of making Christian Louboutin or Louis Vuitton rich, make yourself rich. Get the knowledge and use it to create wealth for yourself. And when you are rich, buy Louboutin and Vuitton's entire factories. And while you are at it, buy them too! 😋 That's how you do life nowadays. You don't just buy the product, you buy the entire firm! #bosslady101

And creating wealth is achievable. There are many options out to help you make money with your money. You just need to look for them and if you don't know ask. If you start today you will have more options and flexibility with your finances and retirement will be a breeze. Investing regularly over time gives you control over your destiny -- unlike hoping to wake up one day as the heir to a vast fortune. That's just a pipe dream. So since you know that this is not going to happen anytime soon, just start.

Note: Investing in the stock market can be risky so consult with a financial professional who understands your personal financial situation.

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