How you can go and learn to demystify the process of earning passive income without even having any money.
Does not it look weird to you? Or you might be thinking this is another hoax.
But, don’t be in a hurry in concluding this until you scroll below and learn what I am going to tell you about investing and earning without any money or with very little money.
This is no hoax. This is not another story of a king and queen with a malice servant. This is real. People make money and sometimes they make so serious amount of money that you or I could only imagine.
So. I am not going to disturb you anymore and would like to jump straight to the point.
How can we earn money and become rich if we have no money to invest.
Let me give you a simple example of one of the ace investors of India Mr. Rakesh Jhunjhunawal. He is filthy rich. If you look at his numbers you must not believe. He got all his money investing in stocks. He has been investing in stocks since 1984. And all he had when he started was only five thousand rupees (equivalent to 67 dollars of today’s Money).
I think compounding has a special love for him. He is blessed by compounding. If Einstein would be here, he would have got his phrase of compounding proven by this guy.
And here is the real deal.
Can you imagine how much CAGR (compounded annual growth rate) he has gotten on his investments since he started investing money?
It is 63%. I doubt anyone has ever achieved more than or equal of it in the long run. This is phenomenal returns from equity investment. Warren Buffet is not even close it.
With this CAGR, Your money is nearly doubling every passing year. And if it continues he would soon become the richest person of the world leaving far behind Geroge Soro, Carl Icahn, Warren Buffet, or any profound investor of modern times.
But, is it true? Is such CAGR possible to achieve when the equity markets have witnessed multiple crashes and depressions?
This is another untold story.
During this period, the stock market has also witnessed several crises and scams. But, nothing could downgrade the morale and confidence of this ace investor. He has always confidence in all his investments and many of his holdings are more than 10 years old.
Where do all those things point to you? Is investing in stock is a matter of luck and only those who’re lucky get rich here?
Probably not. If it is a matter of luck then nobody can be lucky every time. You can’t earn and become rich in the stock market if you think you’re lucky. It can only be in your favor once or twice but not throughout your investing career.
So what does it mean?
Does he know something about investing that we all don’t know? Or he is a real genius and follows some strict rules of investing which we know but don’t use.
This could be true that Mr. Jhunjhunalwal follows his own sets of investing rules that keeps him ahead of many investors.
What are those rules?
Is he a disciple of Graham Dodd school of thought?
Or he follows his value investing rule?
Whether he follows someone or not, is not a question of importance. But, what makes him ahead of all the investors and winning year by year.
He also invests his own money. Whatever the money he has accumulated through markets is completely his own or taken on debt. So, whatever rules he follows for investing they are truly great.
The mentor of Rakesh Jhunjhunwala is also a market veteran who has amassed a sizable corpus from the market and is currently running avenue supermarket successfully. He is no other than Radha Krishan Damani.
His current net worth is more than 10 billion dollars and that makes him 2nd richest person of India and 67th in the world.
These legends have started from the market in complete obscurity and now if anyone does not know both of them then they don’t know the market.
However, earning money from the market is not easy and always we are stopped by a horrific statement” Investing in the stock market is gambling, you would lose all of your money, home and peace”.
We can’t judge the statement because it is neither true nor false. We can have situations where the statement fits correctly and in some instances, it is completely wrong. We can compare it with the above example.
If you don’t know anything about the market and start putting your hard-earned money on businesses you don’t understand, then you’re going to end up poorer.
But, if you know the market, study the business, figure out what is in your favor and what can go wrong then you can have a good start.
Studying the balance sheets, income statement, profit and loss statements, director reports, auditor reports can help you understand the business closely. But, if you don’t how to evaluate a business, you must not invest your money because you may lose it all.
Peter Lynch, one of the fund managers of the once the largest mutual fund advocates for investing in businesses you know about. It is great advice.
Before investing your money in any of such stocks, you must ask yourself a couple of questions;
- Do you understand the business?
- How does the business make money?
- How is management? Is it competent enough and can handle and invest your money better than you can do it?
- Is the business recession-proof? Or it can grow in any condition?
- Who is the competitor? How can it compete with its peers?
- Is the business doing well?
These are some basic things that can help you in making a better decision in investing and protecting your money from an unprecedented fall.
Graham and Dodd talked about investing in a business that is selling below its intrinsic value. If you find such businesses and buys them at the right price the chances are your investment would flourish.
You have several resources where you can study and hone your investing skills. You can be better over time.
Investing is a boring profession but this is highly rewarding for those who can practice patience.
And there is no shortage of real-life stories where patient investors have made killing in investing in markets.
They followed buy and hold strategy for good stocks that looked them promising. They studied their financials, wait for a good price, and bought and hold until they got good returns on their investments.
They have also realized losses on some of their investments. But, they immediately took the right decision and got rid of bad investments.
Their timely exist from fading stocks not only saved them money but also helped them get more of their money in investing in other flourishing stocks.
The horror stories of stock market losses belong to speculation and trading. People have lost their fortune in trading stocks. But, there have been legends that have made a corpus in trading and speculating. And they lost it all too in a very short time.
We can’t forget Jesse Livermore when we talk about trading and speculation and making a lot of money and losing it all.
When everyone was losing money in the 1929 stock market crash which is also called the great depression, Jesse Livermore was becoming richer and richer. It is said he earned over 100 million dollars in that crash. But, he lost it all in the coming years. Speculation does not work and if it works it works for a while.
Trading and speculation do not seem to be a reliable way to earn income while sitting at home. You may lose your sleep if you get heavy losses. And there are huge chances of losing your principal value in trading of stocks.
There are many ways to earn income while you stay at home and do what matters you most. Now you don’t need to follow that same routine of 9-5 jobs and coming home depressed, frustrated, and dull.
You can learn and improve your skills in any field you like. There are several ways you can use your spare time and become more productive and skilled.
If you could use that time properly and improve your skills you can open paths to passive income and financial freedom.
However, it is not always easy to use your time properly because you are habitual to the office environment, and learning something at home has never been in your routine. You need to develop habits that could replace your bad habits of watching TV, reading novels, or any time-consuming activities.
The reason we don’t come out of comfort zone is our habits which make us slave of the circumstances. We hate the job. But more than hating that job, we hate ourselves, and the work that could help us get rid of this rat race.
We keep on working like that wasting our time and doing activities that psychologically make us poorer and incapable of taking initiatives.
We’re only who is responsible for our good or bad lives.
So get up and work for your freedom now.