Everyone who invests in the stock market invests in the dream of becoming a millionaire someday. So that, they can do whatever they love to do, not what they need to.
Those who say money has no relation to happiness should remember”Money is not everything, make sure you earn a lot before speaking such nonsense”, Warren Buffet advised. Money may not buy happiness but it gives you freedom of time that can be utilized to bring happiness in life.
In this blog, I will cover step-by-step boring, yet simple ways to become a millionaire in the stock market. I have poured the knowledge of great investors who creates massive wealth from the stock market.
Reading this blog will definitely help you know the mindset of investors like Warren Buffet, Peter Lynch, and Rakesh Jhunjunwala.
Why invest in the Indian stock market?
The biggest reason you should start investing in the Indian stock market is the stellar returns given by the number of companies to its shareholder. As India is the fastest developing country with a major population being young so, the possibility of extraordinary growth in the future is very high.
According to the report of the statista, India is the youngest country in the world. Our median age is 28 years while China has a median age of 38 years and 48 years in Japan. The future prospects for the next 20 years of India are very positive.
Massive wealth creation of many investors
The obvious question must be coming to your mind, does anyone become rich by holding stocks? The answer to this question is an absolute yes. Top Investors like Rakesh Jhunjhunwala, Vijay Kedia, and hundreds of others have become millionaires in the Indian stock market.
Until now, I hope I have at least convinced you that becoming a millionaire by investing in the stock market is a doable thing and is not any get-rich-quick scheme. So, without further ado let’s get started.
The Boring Way To Become Stock Market Millionaire
1. Start Early
If you are at a young age then you are in the best phase of your life. As liabilities are very low, one can invest most of the earnings in the stock market. Youngsters should invest a minimum of 50% of their earnings in the stock market.
While adults can invest 20% of their money. One can create wealth from the stock market in two ways. You can invest more money for a lesser time or invest for a longer time period of 40 years. Investing a little portion of earnings for the long term is a suitable option for most people.
2. Don’t fall into the trap of earning quick money
As we have discussed earlier investing in the stock market is not any get-rich-quick scheme. Whoever promises high returns in a short period of time is none but a scam.
Similarly, many people have a special attraction to penny stocks. Just because they are available at cheap prices and give a feeling of holding many stocks doesn’t mean you will earn huge money on them. One should give preference to quality rather than quantity.
3. Long-term investing: The sure-shot way to become a stock market millionaire
Investing for the long term greatly reduces the risk of losing money. Be it Warren Buffet or any great investors they all become great because they have continued to hold good stocks for years and decades.
Buffet bought Coca-Cola in the ’90s and after 30 years coke is still present in his portfolio. The majority of Warren Buffet’s wealth has come after crossing his 60th birthday.
Today Buffet is a household name just because he is a great investor for more than 70 years. In cricket, Rahul Dravid was known as a wall of the Indian team because he used to protect his wicket for a long time and won India many times.
” Rule no 1 is never lose money, Rule no 2 is never forget rule no 1″-Warren Buffet
His thoughts best depict how he prioritizes the protection of his capital over making extraordinary returns.
4. Always put some money aside as an Emergency Fund
It is very important to have an Emergency Fund. The stock market is a volatile market any odd situation can affect your standard of living. Daily life expenses should not depend upon the money you earn through the stock market.
5. Caution: Never try to time the market as it is injurious to wealth.
Never try to time the market as you and I can’t. Many investors continuously try to time the market to get more returns than the market average. Instead of reading the news like why the stock market is up or down today, rather one should focus on the fundamentals of the company until the company is growing year by year.
People like Rakesh Jhunjunwala, and Vijay Kedia had not sold their shares before the stock market crash of 2020. Neither Rakesh Jhunjunwala nor Vijay Kedia could predict that crash, so who we are?
6. Say no to debt
When you buy things in debt then you are buying things that you can’t afford. Warren buffet’s mighty advice sums it all up, “If you buy things, you do not need, soon you will have to sell things you need.”
Many people buy stocks on leverage money and think they will earn more returns than their interest. As the stock market is a volatile place consistent returns are not guaranteed. So, one should try to stay away from taking leverage as much as possible.
Becoming a millionaire in a stock market is not hard. Investing for the long term can make you millions of rupees in the stock market. It wasn’t your decision to be born into a poor family but it is your choice to become a millionaire and the stock market can help you in this journey. Happy Investing!