Build Wealth

There is a long list of different ways you can make some money in the stock market. Appreciation can be extremely powerful, however it is not the only thing to look for. So, how can you make money from a stock that you own? What are the 4 best ways to get money from your long term investments?

1. Dividends

Dividend paying stocks give off a great income that can definately add up after many years of holding it. When a company wants to share their earnings with their stock holders they can issue a dividends and pay each holder a percentage of their earnings.

A lot of money managers think of this as one of the most powerful ways of making money from a stock. This is because it pays out money over and over again and can really add up. However dividends are not the only way to make money off of a stock that you already own.

2. Capital Appreciation

This is the method that can be the most powerful and therefore is the most popular. The idea is you buy a stock it goes up and you sell it for a profit. Appreciation can be very powerful and picking the right stock can make or break an investor. This makes the overall company very important. Getting into a strong company can be profitable, while getting into a weak company can completely destroy an investor.

3. Covered Calls

Covered call writing is another way of profiting in the stock market. If you sell a covered call you are selling someone else the right to buy the stock from you at a certain price on or before a certain date.

The only problem with this strategy is that it could potentially force a person to sell their stock early. But it is still a powerful strategy none the less.

4. Selling puts

The last strategy is called selling put options. It gives an investor the ability to get paid to get into a stock. By selling a put you are letting someone else sell you a stock at a certain price sometime in the near future.

If you do not mind getting into a stock put selling can help you start off right by paying you before you even get in.