Is it possible to make a living out of the stock exchange?

Sly21C

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I am thinking of investing all of my money on the JSE and hopefully make a living out of it. Is that far fetched or is it very much possible?
What do you guys think, I'm just not happy with my job anymore as a structural draughtsman.
 

Bondizzo

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cool idea, I know its possible if you know what you doing, maybe start with a little amount like R10k and play around with that to learn the ropes
 

Ecco

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First up, the stock market has risks associated to it, just be aware of that.

Second you need a huge capital to start with if you intend making enough money to live off from month to month, without having any other source of income. Eg, if you buy 100 shares at R2 a share you gonna spend, R200. If the price moves up to R2.50 a share (25% growth, which is rare in one month),and you sell at the end of the month, you would only have made R50 profit, and you would need to reinvest the R200 to buy some more shares, so that hopefully you can make so more money for the next month. (i have also not included brokerage fees, so you come out with less then R50)

Mostly investing in the stock market is a long term investment, and does not yield results in the short term.

In short, no you wont be able to make a living of just trading unless you have plenty initial capital. You still need another job/ another source of income.
 
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Devill

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also be aware of the fact that if you wanted to get a loan any where it is going t be hard because of the low stability/high risk that goes with playing the stock exchange.

Ps yes it is possible (stockbrokers) :D
 

Deenem

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You make money on the stock exchange in two ways:

1. Capital Growth, that's basically when the price of shares increase. Mostly people use capital growth for long term investments, not for income. Captial Growth on shares varies wildly and you can triple (or lose) your investment in a matter of days, so it's risky.

2. Dividend income. This is when companies pay out a cash dividend every 6 or 12 months for each share that you own. People looking for an income (like you) would invest in shares paying dividends to ensure a steady income, but for this you need large capital to start with. If you're lucky you can get about 10% income on your capital per year.

If you want to do this for a long time your stratgey will consist of investing enough of your money in divdend paying shares to ensure you have enough income to pay the bills and investing the rest in capital growth shares to make sure inflation doesn't catch up with you.

EDIT: Just be aware that stockbrokers are just salesmen, they make their money by charging commission for selling your shares for you. They usually don't make their money by owning shares of their own (although I assume most of the do)
 
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Ecco

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also be aware of the fact that if you wanted to get a loan any where it is going t be hard because of the low stability/high risk that goes with playing the stock exchange.

Ps yes it is possible (stockbrokers) :D

Stockbrokers have huge piles of capital - goes back to my first point. Stockbrokers also make money from charging you brokerage.
 

Ecco

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You make money on the stock exchange in two ways:

1. Capital Growth, that's basically when the price of shares increase. Mostly people use capital growth for long term investments, not for income. Captial Growth on shares varies wildly and you can triple (or lose) your investment in a matter of days, so it's risky.

2. Dividend income. This is when companies pay out a cash dividend every 6 or 12 months for each share that you own. People looking for an income (like you) would invest in shares paying dividends to ensure a steady income, but for this you need large capital to start with. If you're lucky you can get about 10% income on your capital per year.

If you want to do this for a long time your stratgey will consist of investing enough of your money in divdend paying shares to ensure you have enough income to pay the bills and investing the rest in capital growth shares to make sure inflation doesn't catch up with you.

Dividends are normally quite small.
 

Just_Ice

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You can, but its extremely difficult and risky!!! And you need big bucks to do it!
Its easier and safer to just find a job...
 

DJ...

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It isnt possible for the average Joe as the initial capital outlay requirements are so high and it becomes a somewhat illiquid asset! Your money is tied up as capital growth is usually the major objective although it is possible to become a full on trader looking for short term arbitrage opportunities. If you dont know much about the market then I would not suggest this route!

You would need a huge portfolio for the dividend payouts to subsidize a monthly income.

Simple answer is no, however you could invest wisely and retire sooner than you think ;)

Besides, arent draughtsmen in short supply in SA? Surely this is quite a lucrative industry to be involved in? Quality is better than quantity and investing all your money in the stock market is not a wise move unless you know how to hedge your portfolio correctly.
 

Ou grote

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I am thinking of investing all of my money on the JSE and hopefully make a living out of it. Is that far fetched or is it very much possible?
What do you guys think, I'm just not happy with my job anymore as a structural draughtsman.

Warren Buffet did ok.

Start by googling him.
 
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