Invest in Stocks or Invest in Business?
First of all thank you dear readers. I am happy if I see my visitors increasing each time. It’s worth all the effort in writing articles on a specific niche. I happen to stumble on a blog that talks about which one is better - to invest in stocks or invest in a business?
Investing in stocks and starting a business are both risky. You both have to educate and equip yourself with the right skills. You also have to watch both of them. Stock value goes up and down depending on the market sentiment. In business, the same nature applies. You have to watch its operations or else it will fail.
Let’s try to discuss each of these two types of investments:
If you are a stock investor, you just need to know what stocks are doing good. You have to watch the news and monitor your stock picks. When doing your stock trading, you basically need to either call your stock broker (if you are trading offline) or access the internet (if you are trading online). Basically, the physical involvement is not too much. But the disadvantage here is that you don’t have much control on the stock prices because the market dictates it. You cannot command the market if you want to either buy or sell a stock at a specific price. So if for example, another great depression hits the world economy, then you cannot do anything about it. All stock values will definitely fall down.
For those who are newbie in the stock market, you might want to learn about how stock market works.
On the other hand, if you are about to start a business, you need to be more physically involved in it. First of all, you have to do a feasibility study or business plan. Next is to choose your location. As soon as the business is up and running, you have to involve yourself on its day-to-day operations. You have to physically deal with your clients and customers especially if you are still on the start-up stage. You have to monitor your employees and their performance. You have to comply with certain regulations. However, as compared to stocks, you definitely have much control over your investment in business. You can fire your employees and replace them if they are underperforming. You can lower down your prices and produce quality products and services to attract more customers. You can be agressive with your marketing efforts to increase sales and revenue.
So if you were to invest considering you both possess the right skills and capital in both business and stocks, which one you would choose? Based on Robert Kiyosaki’s cashflow quadrant, the question here lies on whether you are an investor or a big business owner. Let me hear your opinions. 
To get articles, you can subscribe using your favorite RSS feed reader or have them delivered directly to your email address.
What To Read Next
Tagged with: Business • invest • stocks
Filed under: Entrepreneurship • Investments
Like this post? Subscribe to my RSS feed and get loads more!
6 comments
Hi, this is just my opinion. It is true that you don’t have control over the stock price, and you can’t do anything if the stock price go up or down. But you do have control over what stock to buy and not to buy. I think instead of shy away from stock market because wanting to avoid risk, one shoud do lots of homework before investing in shares if you really want to invest in stock.
Well, I do read RK before, his advice sounds like this: if you have tonnes of money, you can generate your passive income through your portfolio which is the stocks you own. If you don’t have much capital, u might want to start from being a business owner then subsequently switch to be come an investor.
[Reply]
Tyrone Reply:
August 30th, 2009 at 9:46 pm
Hi Zen, thanks for your insights. Assuming all things are equal, you both have the capital and the skills in both stocks and business, which do you prefer?
The question points out more into which type of investment are you most interested in. An investment in which you can control but you need physical hard work (business) or an investment which you don’t have full control but it does not involve too much physical work (stocks)?
[Reply]
I prefer investing in stocks..as it won’t require too much of my time and effort. Plus I don’t have to worry about permits, location, employees and the like
I just wish I could start soon.
[Reply]
I totally agree that one must do their research and use common sense. I am in the midst of doing that with Mentor Capital (MNTR). I was turned on to this company after reading about their 20% interest in Quantum Immunologics, a bio-tech company, on Breast Cancer Investing (dot com). So far it’s looking like a good investment.
[Reply]
I agree with the idea that one must do his due diligence before engaging in any investment. I do prefer stocks and also want to be a business owner soon. With regard to stocks, after all the studies and research; One must also create its own strategy and come up with a sound plan for his investments. This will determine weather his investments will actually profit or not. Stock Investment is a guessing game but I don’t prefer guessing too much. One must know his investment for long term and short term depending on the goal an investor has. This will determine his strategy and the strategy will make or break the investor. As Rich Dad Said, It’s not the investment that is risky but it is the investor. We must lessen or sometimes eliminate “RISK” when investing.
[Reply]
Either way, you need to equip yourself with the necessary knowledge and understanding of the market you’re into. Since I am just starting, I think I would start with stock market since it doesn’t physically require my presence and I don’t have to face many processes such as acquiring business permit, hiring people, etc that I am sure I have to deal when putting up a new business.
[Reply]