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How do people make a living off stocks?


Sophia
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I always wondered this but never fully understood it. 

I see it being a cliche thing in a lot of older movies from the '80s and '90s where people are all down on Wall Street panicking over a crash and stuff. 

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As an individual: Buy dividend paying equities. Overtime you can develop quite a bit of cash flow from the dividends. 

There are people that make their livings doing all kinds of different things with equities. There are a lot of different players that are needed to make a market work and everyone makes sure to get the their cut. 

Be patient buy when things make sense for you to buy them. Never place market orders and always wait for the market to come to you. Go in with a clearly defined plan to help set yourself up with the best chance for success. 

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Aren't there people you can hire to handle this for you and manage your stocks? I would imagine they are not cheap but if you have the money and want to ensure you see gains in the market, it sounds like a smart thing to do.

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Yeah if you do not want to learn how to do the research yourself you can bring a financial advisor onto your team. 

I have worked with a few over the years but what I found is they are just pedaling investments for their brokerage. They may not all be bad but I typically enjoy asking the question if their own money is invested into whatever they are selling me. When they say no I typically see that as a red flag. 

There are plenty of studies that have been done on index funds like SPY and how if you would have just gotten the market exposure things would have been just fine. 

Which is why when I am talking to people about building a new portfolio I try to push them towards a total market fund that just plays the full market. 

I do not understand financial advisor angle to much. It seems the people that use them are just offloading a little bit of work for a percentage of their investments. I have always felt that the onboarding of the financial advisor was so when the markets go bad you can just blame them instead of yourself. Although your financial advisor made suggestions that you chose to take... 

There is a fear about doing things wrong when it comes to money and I really think it just get over complicated in peoples minds. 

No one can see the future and it is almost impossible to know what may be coming. If people did know what was coming we would have way more wealthy people in the world. There are no guarantees in investing. 

As an individual the brokerages are now offering no fee ETFs you can buy into that can get you broad exposure to the markets. Over the long run it seems like the best way to go for people that do not want to study a market. 

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Making money purely off of stocks isn't as straightforward. There are technically three approaches

1. I have enough stocks that I can sell a few every year and live off of that the rest of my life (Retirement savings)

2. My stocks are paying enough dividends per year to survive
3. I day trade stocks to make profit

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