How to make money on investments: tips + ways

How to make money on investments?

The dream of every working person is to make a profit without many hours of daily work. And this desire is quite real. To become an investor, it is enough to immerse yourself in the world of the stock market and learn to feel profitable niches for investments.

Passive income is a direct path to financial independence. With a competent approach, it can become not only a pleasant addition to the main income, but also fully provide you in a few years. Let's figure out how to make money on investments, where to start studying the stock market and whether there is a win-win scheme for increasing money.

Why invest in securities?

Even 5 years ago, bank deposits were a source of passive income for a working person. But their effectiveness is small, they justified themselves only as a way to save money. And even profitable interest (by past standards) would not have brought as much profit as novice investors are now receiving.

However, this method has a low level of risk: in the event of a bank failure, depositors can return up to 1.4 million. No one will compensate for losses when working on the stock market. But this is not a reason to refuse to study and interact with financial instruments (securities).

The easiest way for a novice investor to get the first income is to buy securities and, after waiting for an increase in value, sell them. For example, if you invested 10 thousand 🪙 in the purchase of shares, then for a year of operation the minimum profit will be 20 thousand 🪙 (3-4% of investments per week). You only need Internet access, 15 minutes a day to study news from the world of finance and investment, free money.

How to make money on investments – Basic financial instruments

Let's look at a few important concepts:

1. Shares are securities that testify to the ownership of their owner to a share in the company. By buying them, the investor becomes a share owner (albeit a small part). They fix the right of a person to receive dividends (part of the profits of a joint-stock company).
2. A bond is an IOU issued for money invested in a company (or state), giving the right to receive a certain income in the future (small percentages of its face value).
3. A bill of exchange is a written monetary obligation of the borrower to the person to whom this paper was issued. A stable financial instrument that brings a small but guaranteed profit. Direct purchase of bills is not possible, only through the purchase of shares of ETF FXTB (short-term US government bonds).
4. Shares are securities that give the right to own shares in several companies.

Shares are the shares of a mutual investment fund, a portfolio that combines the money of different investors.

Where to start investing?

You need to make money on investments by making transactions for the purchase and sale of financial documents on a specialized trading platform – the stock exchange. It allows you to remotely invest in securities, track the dynamics of the value and sell them at the market price.

Now the platform exists online, for access you will need a smartphone or laptop and an open individual investment account. Between the investor and the stock market there is an intermediary ̶ a broker, bank or investment company. They provide individuals with access to financial transactions.

Attention! Investing through the stock exchange is safer and easier than doing over-the-counter trading. The on-site system is controlled by the federal authorities, so violations by companies and investors are unacceptable. This means that an individual is protected from transactions with fraudsters, from the risk of losing the money invested.

How to make money on investments – What to invest in?

The main Russian exchanges are St. Petersburg and Moscow. The Capital Stock Exchange allows you to sell and buy securities, currencies, precious metals, options, food products, futures.

Options are a financial instrument that gives the buyer the right to purchase or sell an asset at any time at a predetermined price. Unlike futures, it obliges only the seller to fulfill the conditions.

Futures is the same instrument, but obliges both parties (buyer, seller) to buy and sell an asset at a previously agreed price.

The St. Petersburg Stock Exchange provides access to market transactions with raw materials (products of oil refining, woodworking industry, agriculture) and futures.

Securities are issued to the stock market by issuers. They can be enterprises, the state or its separate subjects. Such an operation allows you to attract a lot of money for the development of projects with income for the investor.

Where to start and is it possible for a beginner to earn money?

It is realistic to achieve an impressive result and earn money on investments in the first year. It is only necessary to correctly approach the issue. Start with a definition:

1. Attachment size. A novice investor at the training stage should not invest more than 100 thousand 🪙 10 thousand ̶ optimal money to study the system of stock exchanges and learn how to invest. Theoretically, you can start with 1000🪙 if a banking organization acts as a broker. They charge low transaction fees (for example, Tinkoff charges 0.025-0.3% per transaction). Accordingly, the rate of return is high.
2. Type of trade: independent or intermediary. Depending on the amount of investment and the desire to explore the chosen niche, you can invest yourself or conclude an agreement with professionals. But the final decision on transactions remains with the owner. In cooperation with mutual funds, the investor receives income, but cannot independently dispose of the assets.

More about brokers and mutual funds

To make money on investments yourself, it will take time to study the financial instrument, analyze statistics and the economic situation. A daily review of stock reports, the state of companies and price dynamics is the main work of the investor, which directly affects his income. If you don't want to go into details, you should conclude an agreement with a professional who will conduct transactions for you. The risk is lower, the probability of profit is high.

Important! Cooperation with brokers assumes that the owner of the securities voices the decisions, and the broker implements them. Work with trustees is built according to the same scheme, but they sell, buy shares without notifying the investor. Cooperation with mutual funds will help relieve oneself of responsibility for decisions on financial transactions.

A mutual fund or mutual fund is a portfolio that pools money from different investors to buy bonds and stocks together. Simply put, you invest the amount, and professionals manage it.

What are mutual funds?

To start working with a mutual investment fund, an investor must acquire a share in it. The share is subject to purchase, sale and pledge. Manages the money collected from all participants of the fund, the management company. Decisions about transactions made within the portfolio remain behind it.

When creating mutual funds, the niche in which they will invest is determined in advance: bonds, stocks, antiques, foreign currency. To get more profit, directions are combined. In funds organized for professional investors, high risk, income; for unqualified investors, the risk and return are lower.

Mutual funds are also divided into:

• open (sale and purchase of shares is available on any day of the year);
• interval (operations with shares are available 3-4 times a year);
• closed (purchase only in the year of foundation, sale ̶ in the year of dissolution).

For an investor who is not ready to invest a lot of money, open mutual funds are suitable. You can invest at least 1000 🪙 for a period of 1 year.

How to make money on investments – Competent strategy

The strategy determines your behavior on the stock exchange: what you buy and sell, whether you are ready to take risks, which affects your final decision. It is necessary both for independent work and for cooperation with a trusted person.

The three main questions that make up an investment strategy are:

1. Where (in what assets) to invest money?
2. For how long (one year, 5 years)?
3. What is the maximum acceptable loss percentage?

Example: assets ̶ shares of many large companies (Gazprom, Sberbank, Tinkoff). Investment term ̶ 2 years. The amount of loss ̶ 25%. If the share price has fallen to 25% or more, then the assets are immediately sold (despite the fact that 2 years have not yet passed).

Similarly, the strategy is discussed with a broker or trustee. Pre-setting limits reduces the risk of losing profits while maintaining the original investment amount.

Important! Before choosing the type of assets, study investment forecasts, read the opinions of traders and brokers. Look at the dynamics of stock prices of various companies over several years.

Broker choice: Tinkoff Investments

How to make money in Tinkoff Investments? Simple enough. The company supports a novice investor by providing access to a free course "How to Invest". It includes 9 lectures, tests and a final exam. It discusses the basic concepts, the amount of taxation, the rules of work on the stock exchange and the principles of risk reduction.

You need to start investing by opening an investment account. The client needs a debit card: if it is available, the documents are signed online, if not, the card is delivered by the employees of the organization.

Tinkoff offers a low percentage of commission for financial transactions (sale of shares, bonds): 0.025-0.3%. Commission for replenishment, account maintenance is not charged. There is no minimum investment amount, when you activate the Investment Bank function, small deductions are automatically transferred from the card to your account, investing money in Tinkoff Capital portfolios.

What to buy?

How to make money in Tinkoff Investments without experience? Explore the electronic edition of Tinkoff Magazine, where professional traders share their forecasts and the situation on the investment market. They clearly show the dynamics of prices for the shares of many large foreign companies.

The platform also provides a free assistant ̶ a robot advisor. The program is approved by the Central Bank of the Russian Federation and works on the basis of the client's entered data. It is necessary to answer 6 questions, indicating the desired investment amount, and the system will collect an individual investment portfolio. A great way to get started in this niche.

You can start investing in ready-made portfolios that provide a guaranteed income. Cost from 30 thousand 🪙, full payback in a year.

Attention! It is more difficult for a non-professional investor to make a profit. To increase income, buy securities of both many and foreign enterprises.

Which stocks are the most profitable?

Tinkoff Investments analysts regularly publish statistics with graphs and tables for several years. A novice investor will have a hard time at first, but such reports help to increase profitability and decide on a further plan of action.

According to the report for 6 months of 2021, a high percentage of growth was recorded in the stocks:

• Severstal ̶ 22.65% yield;
• "Crocs Inc" ̶ 54.67% yield;
• Detsky Mir ̶ 9.58% yield;
• Sberbank ̶ 9.21% yield;
• "Bank of America Corp" ̶ 18.36% yield;

Profitable bonds: "PIK-Corporation issue 2" ̶ 8.4% yield for 40 months; "QIWI issue 1" ̶ 8.88% yield for 26 months.

Growth leaders among many enterprises over several years (according to RBC media holding): Beluga (+179.6%), TCS Group (+87.9%); YATEK (128.1%), Varyoganneftegaz (95.2%). A sharp, inexplicable rise in prices occurred on the shares of Kazanorgsintez, where the yield exceeded 50%.

Attention! The data is informative and does not guarantee future profits.

Broker choice: VTB Investments

How to make money on VTB Investments? The algorithm is similar to the Tinkoff broker; a mobile application has also been developed for the user in which transactions are made.

You can invest yourself, or use the services of an experienced trader, analysts and a robot advisor. Financial transactions take place on two platforms: St. Petersburg and Moscow stock exchanges. The assistant robot will optionally collect an individual portfolio based on the amount of money invested, the goals of the client.

Like Tinkoff, VTB provides analysis of the current economic situation, investment forecasts from professional traders. Tables, statistics, graphs – everything that will help reduce risk and increase income.

Brokerage commission for financial transactions ̶ 0.05%, 0.01% of the exchange itself. Maintaining and maintaining an account is free of charge. The bank's customers are provided with a preferential foreign exchange rate.

Where to start investing?

To make money on investments in VTB, you need to open a brokerage account: at the bank office (only a passport is required), on the VTB Online website or in the VTB My Investments application. You can also become a bank client online by filling out an application and providing personal data.

Transactions are conducted through a mobile application. It allows you to sell, buy securities, collect a portfolio or buy a ready-made one. But you can invest in it from 50 thousand 🪙. Commission for withdrawing money (up to 300 thousand🪙 per month) is not charged.

For qualified investors, the broker provides access to the over-the-counter foreign market. The largest foreign enterprises and various financial instruments are represented there. Those who have 10 million 🪙 on their account have the opportunity to use the services of a personal adviser (240-300 thousand per year). It is guaranteed to increase the client's income, reducing the possible risk.

How to make money on investments and how much can you earn?

Income in this niche is not limited and directly depends on the amount of investment. What matters is not how much money you spent in the beginning, but how much you invest in the process of investing. Start with simple financial instruments, buy profitable (stable) stocks.

It is impossible to calculate the exact profit, since the indicator depends both on the actions of the investor and on the price dynamics on the stock exchange. But after 2-3 months you are guaranteed to receive 2-4 thousand 🪙 and 15-20 thousand after a year of investment.

To achieve a passive income of 50-60 thousand 🪙, it is necessary to replenish the portfolio with securities, and invest (reinvest) the earned money in new assets. You need to be patient, because the work of an investor is not a lottery, but the result of a well-thought-out strategy.

A simple example will help you understand how much you can earn on stocks. 10 Sberbank shares purchased at a price of 302.27 🪙 with an income of 42.97% per year will bring the owner 1300 🪙 (with stable dynamics).

Scam projects in network business

The term "scam" in business is interpreted as a project of scammers, swindlers. Companies fall under this category when they violate the payment schedule, do not fulfill their obligations to investors, employees, partners.

In the circle of investors, “scam" is a financial pyramid, an investment hype project. Such a business exists only at the expense of the investments of others, because they do not have their own goods. They are characterized by a rapid rise (in the first 2 years), ending in bankruptcy. Haven't existed for over 5 years.

The task of the managers of such projects is to attract an investor, using the matrix type of marketing as a way to promote. When the inflow of income stops, the firm is closed.

How to understand that the project has problems:

• malfunctions of the official website;
• company representatives report technical problems (complicating the process of withdrawing money);
• deposits are frozen, money is transferred to the reserve fund.

If there are signs of "scam" on the face, you need to immediately withdraw income from the project.

Beginning investor mistakes

Don't buy assets with borrowed money. You should have free money at your disposal, taking into account the existing "airbag" and deferred capital for contingencies. You must be sure that you can lose investments without hurting your budget.

Self-investing requires thorough preparation. Get trained, get acquainted with useful literature:

• John Murphy "Visual Investor";
• William Bernstein "The Investor Manifesto";
• Benjamin Graham "The Intelligent Investor";
• John Rothchild, The Peter Lynch Method. Strategy and tactics of an individual investor.

Don't be intimidated by stock price growth dynamics (especially with a long-term perspective of 2-3 years). This is a standard situation for stock exchanges. Set your own loss limit and focus on its percentage.

Attention! Do not believe the promises of a high percentage of income. 400-500% – unnatural growth rates.

Useful materials for getting the first income from investment

You should start investing in the exchange after completing the training and familiarizing yourself with the basic material.

Books: Philip Fisher Common Stocks and Extraordinary Earnings; Adam Smith "Gambling"; William F. Sharp "Investments"; Vladimir Savenok "Your money should work."

Courses: "Path of the Investor" Moscow Exchange; "Azbuka finance" Lectorium; "Stocks and Bonds" Khan Academy; VTB School of Investors; "Investments for beginners" Finarium; "Financial Instruments for a Private Investor" Coursera; "Investments 101" BCS; "Easy start" Opening Broker.

YouTube channels: "Alt-Invest" (lecture course); "Money doesn't sleep"; "Masha invests"; "Notes of a Millionaire"; "Financial independence"; "Millionaire from Trueshcheb"; "InvestFuture"; "Dmitry Solodin"; "Trader Evgeny Chernykh"; "Bad Investor"

Telegram channels: "Blog of a lazy investor"; "Economy"; "Thesis"; "Income"; "Financial Advisor"; "Lemon for tea"; Tinkoff Journal.

You can start earning on investments from 1000 🪙, and withdraw profit in the amount of 20-30 thousand 🪙 in a year. Do not be afraid of trading on stock exchanges, because there is enough useful material to learn how to work with securities. And it doesn’t matter how much the first deposit was, the main thing is to gradually replenish the brokerage account and reinvest the profit received in the first year into new assets.