đTurn $100 into $10,000: The Beginner's Journey in the Share Market
Imagine you could double your money by just holding it in your hand for 10 years. While you canât hold it in your hands for that long, but you can invest it in the share market and keep doubling it every 10 years with an average return of 7-8%. There is no shortcut to wealth, and there is no get-quick-rich scheme. This article is about how can you turn $100 into a remarkable $10,000 with disciplined, informed, and strategic use of the share market. If thatâs something you are interested in then letâs understand what the share market can do for us.
1ď¸âŁ Understanding the Share Market
- What is the share market after all? Letâs understand how it functions.
âWhat is the Share Market?
- The share market, or stock market, is a public entity for the trading of company stock and derivatives at an agreed price. It’s a network of economic transactions, not a physical facility or discrete entity. Itâs the place where companies get listed to sell their shares and where investors can buy and sell these shares.
âHow Does It Work?
- Buying Shares: Investors buy shares of companies, becoming part-owners of the company.
- Share Value Fluctuation: The value of these shares fluctuates based on company performance, market trends, and other economic factors.
- Selling for Profit: Investors aim to sell their shares at a higher price than they bought them for, capitalizing on the share value increase.
"The stock market is a device to transfer money from the impatient to the patient."
2ď¸âŁ Strategies to Grow Your Initial Investment
How exactly we will turn the $100 into a significant sum? The answer is patience, and courage to start investing.
Here are keyways to approach it:
âStart Small but Start Smart
Start small not to make huge returns but to learn and understand the basics. You manage your risk low and start grasping the power of investing one step at a time.
Start with:
- Low-cost Index Funds or ETFs:
- Your money is invested in hundreds of companies, so risks are low
- you get exposure to all the big and small companies with little amount of money
- Expense Ratio (fees) are low, so you get more returns for your investments
- Dividend Reinvestment Plans (DRIPs):
- Reinvest dividends to purchase more shares, compounding your investment over time.
"The market fluctuates, but the trend is always up."
3ď¸âŁ Understand and Harness the Power of Compound Interest
You will see this in all my articles because the compounding is magical. If you want to be successful in any field, then you have to practice repetitions. Those repetitions will compound over time, and you will have mastered any skill. It is the same for your money.
Regular Investments: Invest your money and automate your earnings back into the market to get full advantage of compounding over time. Your $100 wonât become anything unless you reinvest your earnings.
Be Patient and Disciplined
Now comes the hardest part, holding your investments for a long long time. Donât worry about the market fluctuations, you will see your money go down once in a while but if you stick and hold it long enough in the market, eventually your money will be doubled and tripled, and more.
"The most valuable thing you can have in the stock market is patience."
4ď¸âŁPractical Examples to convert $100 into $10000?
One must be practical and patient enough to convert $100 into $10000. Is it possible in the share market? YES, and it would take almost 40 years with an above-average 12% return from the market. (S&P funds have returned almost 13% in the last 10 years link) .
Just invest $100 and forget it I am sure you would enjoy $10000 in return for the money you forgot.Â
5ď¸âŁHow Can you get $10000 starting with $100, in just 6 years?
This is what I would do if I wanted to grow my money from zero again.
- Start investing my money in an index fund (you can start on Fidelity and buy FZROX)
- Start with $100
- Automate my investments every month and keep adding $100 each month.
In just 6 years you will have $10000 with only 10% market return which is lower than average. Much better than 40 years, isnât it?
6ď¸âŁWait! You can be a millionaire starting with just $100.
Here is where compounding with your habits, discipline, and patience can make you a millionaire.
The secret sauce is really simple:
- Start investing sooner
- Put your money in a low-cost index fund (you can pick any one from this list)
- letâs start with $100 (I am sure you can start with a lot more.)
- keep investing $100 more, automatically every month
- Repeat it like a madman for 40 years
- Enjoy your investment of almost a million dollars (with above average 12% return from the share market)
And even if you get a 10% return on your investments, you will have almost $600K.
đConclusion
Earning money from the share market needs an understanding of market principles, a little bit of financial education, and your willingness to start investing today. I am sure most of us pay much more than $100 towards are car payments to make car companies richer but hesitate to invest $100 just because lack of financial education. Pay yourself first, start small. Share market has a proven history of making people millionaires and billionaires. We can too.
I hope this article answers how to make money from share market. Happy investing!
"The journey of a thousand miles begins with a single step."
What's Next: take action today đŻ
- Run your investment growth strategies:Â https://www.calculator.net/investment-calculator.htmlÂ
- Best Index Funds:Â Planning for the Future: A Sneak Peek into the Best Index Funds 2024
