Easy Tips On How And Why Young Adults Should Buy Shares

This article is written for the average person that knows a little to nothing about investing but would love to know how to buy shares using Easy Equities, an easy and convenient South African investing platform that eliminates the long process of investing. 

Many of us are consumers, and so we have to think like a consumer with the knowledge of an investor seating in a trading room. 

Investing in shares has never been this easy. Hence, we should try and buy shares from companies that create habits; meaning, buying from companies we constantly use on a daily basis. For instance, buying a stake from your internet dealer, cigarettes company, Colgate, or SAB, to name a few. 

Remember, Successful Journals is not a financial advisor, we are not here to sell you a get rich quick scheme, this is solely for educational purposes. 

Before we get into it, let us first differentiate what Equity/Share and what an ETFs are in investing.  

Equity is stocks or shares you buy from a company, it means you are a partial owner of assets or can be a partial owner of a single company. 

An ETF is Exchange-Traded Funds that are also traded on stock exchanges, however, it is a collection of companies. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold throughout the day on stock exchanges while mutual funds are bought and sold based on their price at the day’s end.

Below are a couple of tips on why you should invest, how to open an investment account, how much money you can begin with and some investing hacks. We hope you enjoy the read. 

WHY YOU SHOULD INVEST

  • To make money

The first and most obvious reason to invest is to make your money work for you. If you are given a tip on how to make money and retire young, wouldn’t you take it? Of course, you would because nobody wants to work until they are 65, right?!

  • To become a partial owner of a business

When you buy shares from a listed company, you own that amount you bought from the company. So if you bought two shares, you own 2% of the company. Or, if you bought 0,002 of a company, you own 0,002 of the company. Imagine owning 55% or more shares from a JSE-listed company, that would mean you are the owner of that company. 

  • Generational wealth

We live in South Africa, a country with a volatile economy, however, it is constantly on a rise. Buying shares means you are on a path that will assist in creating generational wealth for you, your family, and your kids. Financial freedom.

HOW TO OPEN AN ACCOUNT AND START INVESTING

Go to www.easyequities.co.za and sign up. You can download the app on your iPhone, Android phone, or desktop. Or you can use it as a tab on your screen.  

  • Register your account

When you sign up the platform will require the following documents; a copy of your ID, proof of address and a copy of your bank statement. They need these documents to verify that you are a human and for tax returns. 

  • Login to your new account

Once you are done registering, create your login details, add your banking details and the required information. Don’t worry, EasyEquities will not take your money without your consent.

FIVE THINGS TO CONSIDER BEFORE BUYING SHARES 

Now that you are done with the required information, you should receive a confirmation email to welcome you to the platform. Before you start investing, here are a few tips to help you get around the industry. 

  • Know your risk appetite 

When it comes to investing, risk management is important. Risk management determines a successful investor from an amateur. Use the money that you are willing to lose, at the expense of getting a profit. So, no matter what happens, you are covered. 

  • Figure out how far you want to take your investment

Decide whether you want to become a short, medium, or long term investor. You can buy shares today and sell them today, but where is the fun in that? We want to buy shares in order to make a profit. You can keep your shares from today to a week, month, months, years, five years, 10 years, or 20 years and more. It all depends on the goal you are trying to achieve or what you plan on doing with the profits – whether it’s for that latest iPhone or your kid’s university fees. 

  • Find a platform

There are many platforms to buy shares on, such as eToro, FNB, Standard Bank, IQ Broker, etc. However, for the sole purpose of this article, we have chosen EasyEquities, because it is easy and convenient to use for us. With EasyEquities, you don’t need a broker, you eliminate the middleman. 

  • DIY or Choose A Broker

Again, with EasyEquities, you can do it all by yourself. The good part is, they have a built-in researched graph that is constantly updated every day to show you how a company and its share price are doing in the market. 

  • Profits and dividends

Before investing in a company or ETF, know what you want to receive from the investment. For instance, Sasol’s share price dropped dismally earlier this year. Some people were skeptical. Those that bought are seating with shares that skyrocketed later in the year. And now, they have an option to sell it at a higher price rate than they initially bought it – profits. Invest in a company that yields good dividends, meaning; buy shares from a company that you have analysed will do well in a short or long term period depending on your investment goal. 

Before buying a share from a company, do research on how they have been doing in the market. It is sometimes good to buy a company’s share price when it is low and then selling it when it is high. 

On EasyEquities, when you click on a company you want to invest in, a graph of the company’s share price pops out with analysis from the past week, months, and years.

Remember, use the money you have budgeted for investments, the money you are willing to risk. Don’t use your salary and expect to make a profit by the end of the month, you will go hungry. Investing is a long-term game, with good returns. SJ

Successful Journals is a digital wealth magazine, business talk show and media consulting agency. It is a platform for aspiring entrepreneurs and future billionaires. 

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