Today’s success tip comes from Daniel Kertcher.

In 1998 Daniel became fascinated with the stock market and went on to develop a multi-million dollar trading account. Today, he is a teacher and educator having helped 70,000 people across 22 countries.

How do you think the stock market compares to other investment vehicles such as business or property?

I believe that the stock market is the single greatest business concept in the world today. I approach my trading in the stock market as a business. If you use the analogy of a store - you buy your stock at a wholesale price and sell it on at a retail price - in essence, that is what we are doing in the stock market. We are buying stock at a certain price and selling it on at a (hopefully) higher price. The benefit over other businesses is that we can trade the stock market with $1,000, $100,000, $1 million or more. There is really no limit to what we can do.

What’s more, there are strategies in the stock market which allow us to make profits in rising, falling or even sideways markets! So trading the stock market is a much more versatile investment arena than traditional businesses, or even real estate.

To be successful in a traditional business you have to have a good product, excellent marketing, and a competitive price, while also being a master of many different business skills such as leadership, management and finance - there are a lot of things you need to be good at in order to be successful. All you have to do to be successful in the stock market is spend time becoming educated on how the market works and how to protect your capital, and then start gaining experience. Start investing with a small amount of capital and build that up as you become more confident in your trading.

In the property market you only really make money when the market rises. You need a substantial amount of capital to get into the market, the rental income may not always cover the mortgage, and you may have an ongoing cash shortfall. If you want to sell your property it may take months for the property to settle and for you to gain access to the cash from the sale. In the stock market, you can close out all of your positions and have all of your cash back in as little as two business days! 

What’s more, the commissions and expenses for running property are huge compared to trading similar amounts of money in the stock market. The sale of a property worth $500,000 would cost tens of thousands of dollars in commission, not to mention the stamp duty upon purchase, rates, land taxes and so on. In the stock market, you can buy or sell a parcel of shares worth $500,000 and pay as little as $625.00.

There are advantages and disadvantages in the business and property markets; however I believe the overall advantages of the stock market far outweigh the risks and rewards of business or real estate.
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