How to Be a Stay-at-Home Investor

It’s the life everyone dreams of – being a stay at home investor, the kind who makes gobs of money sitting in front of a computer for a few hours a day while enjoying his or her life in other ways. The good news is that it definitely is possible to become a stay at home investor. The bad news is that it won’t be easy and the odds that you’ll have the fabled four hour workweek are slim to none. Here’s what you need to know:

Investing Is a Job, Like Any Other Job

The first thing that you need to understand about being a stay at home investor is that it’s a job, much like any other one. You still have to put in the work just as you would if you were working for someone else. One of the two big differences is that there is no boss to tell you that things need to get done. You need to self motivate so that you get things done yourself. The other one is that you’ll be investing your own money into what is essentially a business which you run from home, which can be rewarding for some, but risky for others.

Start with the Fundamentals

If you’re still with us and you haven’t been scared off yet by the idea of being a stay at home investor, then you’ll want to start by doing your homework. If you know nothing about investing, start by learning more about it. Consider using one of the many stock market games available online to learn more about how to invest in stocks so that you don’t risk your own money until you have a feel for things. The way you should go about investing is to follow three simple rules which are the fundamentals of investing:

Follow the News

Even though you don’t make any kind of a physical product with your business, your business is likely to involve investing in companies that do make physical products or intellectual products (i.e. software, movies, etc.). Therefore, it’s important to follow the news so that you know what’s going on with the companies you invest in. Don’t forget that stocks go up or down because the public believes that the company has the potential to make money. Therefore, you need to read everything there is to know about companies that you want to invest in. Consider setting up a Google News alert to keep abreast of the news.

Read the P/E reports

Every publicly traded company is required to provide something called a profits and earnings estimate report. This is basically internal information that the company provides in which they say how much they earned over the past 3 months and over the past year, sometimes longer along with how much of that money was profit. You need to review the P/E reports for the companies you want to invest in if you plan to be a successful stay at home investor. Take the time to read corporate history. Check out the minutes from the most recent meetings of the board of directors, which is also publicly available to ensure that you know what’s going on with the company. Don’t just assume that they know what they’re doing. It’s your money on the line and as such, you need to know how it’s being used.

Check the Ratings

Finally, no stay at home investor can do without checking the ratings from companies which rate publicly traded corporations. You’ll want to read reports from companies like Moody’s Investing, Motley Fool and Standard and Poor. These companies provide professional ratings of public corporations based on reading the reports which are publicly available and make recommendations based on that information of which companies to buy, hold (i.e. keep it if you already own it) or sell.

Look for Unusual Ideas

Another great way to be a stay at home investor is to look at unusual places to invest your money. Consider for example some mineral investments and Forex investments. These are unusual places to invest your money, however, they often pay off handsomely, allowing you to earn very good returns, assuming you have the ability to stomach the risks involved.

Keep a Sense of Humor

Remember that as a stay at home investor, you are not just your own boss. You are also responsible for your own success or failure. Therefore, it’s important to keep a sense of humor about yourself and to realize that things can and do go wrong. If you can laugh at your problems, pick yourself up and move on from them, then you are more likely to ultimately find yourself succeeding at investing than you might otherwise be if you were to insist that every failure means the world is coming to an end.

Get Out and Talk to People

Finally, being a stay at home investor can often be a very lonely experience. It’s important to get out and talk to other human beings once in a while so that you don’t end up going stir crazy. Be sure to discuss your investments with colleagues and friends and seek their advice as well. Often, you’ll find that others, who are not professional investors, can have unique insights into the market which you may otherwise not consider.

Bottom Line

Being a stay at home investor involves risks and will mean losing some money at times. There is simply no way around it – every investor loses some money some times. The key is to diversify and have enough money in enough places to ride out storms in the investment markets while keeping your wits about you and realizing that these ups and down are just normal parts of being a stay at home investor.