As an entrepreneur, you’re already in a prime position to benefit from the world of stock market investing. First of all, you already know the key concepts involved: risk is a given in the world of business, while profit and loss happen just as much to stock traders as they do to business leaders – but how exactly can getting involved in stock trading help you?
Making cash for projects
The first main reason to invest in the stock market, of course, is to expand the pool of money you have available for investing in your main line of work – your entrepreneurial projects. If you’ve got a significant amount of cash spare, then there’s no use keeping it in your bank account: with interest rates in the UK currently pitifully low at 0.75%, you’re unlikely to make much that way. However, with the stock market enjoying growth of well over 10% some years, it’s reasonable to assume that some return on investment might be possible over the long term. Studying the market closely and reading up on resources that provide learning about value investing vs. growth investing, the right companies to put your investments into, the right time to buy and sell, and many other factors can affect the way you invest and move through the market.
Finding the right stocks to invest in in order to grow your funds is easier said than done though. Researching through the internet and analysing what’s out there is one option: everything you need to know about stocks this week is located on various news sites and blogs, while share traders’ forums may also house some tips on locating the next big stock. It’s also worth working out whether you ought to invest in a group of single stocks, or in a tracker fund that rises and falls in proportion to the whole market. If you’re busy running your companies and need to adopt a hands-off approach, then the latter option might be better.
Angel investing
However, you don’t have to restrict yourself to a mere financial interest in a company – and if you’re eager to use your skills and expertise, then becoming an angel investor could be more suitable. Angel investors are people who provide funding for a start-up in return for equity, but they’re likely to do so on a more informal basis than a more systematic sort of investor – such as a venture capitalist – might.
For an entrepreneur who wants to do more than simply increase their chances of making a significant return on investment, then, becoming an angel investor could be a wise move. It could offer you the chance to use your skills to guide another company towards profit, and benefit financially yourself in the long run from doing so. For someone who likes mentoring and the process of business development, this is the perfect match.
Entrepreneurs have the desire to make profit in their blood. It’s an obvious part of the job, and it’s a mindset that can easily be transplanted to other endeavours and markets. Stock trading is one of them: whether you choose to open up a tracker fund or you’d prefer a more strategic approach by becoming an angel investor in return for equity, you’ve got lots of choice.
