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. 🙂