| Are you a profitable share investor or trader? | | | | this while you are trading, increasing your capital each |
| Most shares investors and traders would move into | | | | time you do so along the way. |
| shares trading or investing after learning some basic | | | | At the same time, it is wise policy to use other |
| charting, usually moving averages and begin to invest, | | | | people's money as a leverage- to increase the capital |
| either making some money or losing some in the initial | | | | base and to be able to invest more, with the profits |
| stages. This is of course, inadequate and a bad way | | | | paying back the interest incurred by leveraging. |
| for a someone to start off trading in stocks and | | | | Therefore, if you are a share investor or trader, it is |
| shares. | | | | important for you to consider improving your overall |
| Why? | | | | trading plan with these wealth creation principles. |
| A person would want to invest in stocks and shares | | | | Here are the steps to a typical trading plan with |
| because he has good positive cash flow but he is | | | | inbuilt wealth creation principles: |
| assets poor. By trading in stocks and shares, he is | | | | 1. Put up a capital of at least $5,000 |
| seeking a way to increase his wealth by balancing his | | | | 2. Against this $5,000 get a margin loan of $5000 |
| cash position with a realistic amount of assets that | | | | from your stockbroker or bank, so that you now |
| will grow in time to further improve his wealth | | | | have leverage to buy $10,000 worth of shares. |
| position. | | | | 3. Buy good fundamental blue chip shares that |
| My personal observation is that 95% of shares | | | | comprise the stock index. Generally, you can buy the |
| investors and traders do not have some wealth | | | | shares within the top 20 of the stock index. |
| creation principles inbuilt into their trading plans, if they | | | | 4. Commit a regular monthly saving of minimum $500 |
| do have a trading plan at all. | | | | to the trading account, with another $500 coming |
| This may appear harsh, but how many of you | | | | from the margin loan. This is the part of the savings |
| reading this, have ever built in a system of savings | | | | program to boost your capital sum. |
| and leverage into your trading plans for stocks and | | | | 5. Use this additional capital to purchase more stocks |
| shares, while you trade? | | | | within the top 20 stocks comprising the stock index. |
| It is well accepted that to build up personal wealth, | | | | With these basic wealth creation principles of |
| you need to save money- put aside the money until | | | | leverage and savings incorporated into the trading |
| it grows into a huge cashpile, or you continue to do | | | | plan, we will now discuss the stock selection process. |