So, you want to make money.

While you can build your capital in multiple ways, from building a business to progressing along your career, leveraging the stock market is an excellent passive way of growing money.

For entrepreneurs, this couldn’t be more true.

Just like building a business, thriving in the stock market requires a good base of knowledge, some strategic risk-taking, and a fair bit of capital.

But be warned. It’s actually quite difficult to live off the profit you make in the stock market. In fact, in many cases, it’s hard to profit at all.

Research has shown that 90% of stock market investors fail to turn a profit one year after investing in the stock market.

Clearly, there’s a learning curve you’ll need to go through to excel in the stock market industry.

However, with the right mindset and the right actions, it’s more than possible to make money and even get rich through the stock market.

Here’s what you need to know if you’re considering building wealth through the stock market as a business owner.

1. The Best Time to Start Investing is Now

Spending time in the market is much more realistic than timing the market.

Unless you’re already a savvy stock market analyst who’s proficient in various fundamental and technical analysis techniques, there’s no better way to start your investment journey than by getting at least some portion of your capital in.

Furthermore, spending more time in the market allows you to gain compound interest through dividend streams.

So don’t dawdle and wait for the “right opportunity”. This can come and pass before you know it. But instead, try to put a little stake in the market through a stock you trust. Get familiar with the process of putting in money and tracking its growth.

By doing this, you can get acquainted with the process and jumpstart your growth exponentially—which is pivotal for first-timers in the stock market.

2. Diversification is Key

As the old adage goes, don’t put all your eggs in one basket. And this philosophy can’t be any more true in the stock investment world.

To put a figure on things, there are over 2,200 securities listed on the Australian Stock Exchange and tens of thousands more listed on global exchanges around the world, including the NYSE, Euronext, and various Asian stock exchanges.

Holding a stake across multiple exchanges helps keep your portfolio balanced and prepared against sudden global economic shifts.

Furthermore, it also allows you to access stock opportunities that may be found in trending economies that can turn into major players in the upcoming years.

Besides investing in foreign investments, consider also investing in different industries and sectors within a single exchange.

If you’re proud to support the growth of local green energy companies in Australia, for instance, consider trading stocks like the one here to have a stake in it.

There are 77 different industries in the ASX, so do your part and research these sectors that are established and/or up-and-coming, such as technology, healthcare, and finance.

3. Create Long-Term Goals 

Like being an entrepreneur, you should have financial objectives that you intend to reach during a set timeframe.

Your goal shouldn’t be as vague as merely “get rich”–it should be specific, measurable, achievable, relevant, and time-bound, SMART for short.

To create a suitable goal, it’s important to know why you want to invest in the first place. Do you want to slowly build and compound your wealth? Or are you more interested in taking an aggressive approach?

Regardless of the case, you should try to formulate an investment strategy that matches your overarching goals.

For example, you can structure your investment approach to ensure that you have an adequate safety net when you reach retirement age. This would entail a more consistent and slow-growth approach.

Alternatively, you can structure your investment approach to be more aggressive and potentially reach a quick pathway to growth, which inherently may come with its fair share of manageable risks.

As previously mentioned, the approach is individual to you, your goals, and your financial circumstances.

But if you want to build wealth through the stock market, you need to know your own reason for it and build a strategy around it—wealth can mean totally different things for different people, after all.

4. Consistently Invest

Building wealth in the stock market isn’t the equivalent of putting a dollar into a cryptocurrency in the early 2010s and expecting to strike gold a decade later.

It requires a calculated and consistent approach, one that should be constantly curated on a monthly, if not weekly, basis.

Monthly assessments of your stock portfolio’s performance are important to ensure that it’s going in the direction you intend it to go.

In other words, you need to discipline yourself and instil a habit of consistently allocating a portion of your income to the stock market to truly make an impact on your wealth over time.

For instance, you can allocate a set percentage of your monthly income entirely to stocks. This process is known as dollar-cost averaging, which is a great way to slowly build your stock portfolio through consistent schedules.

If you want to automate the process, you can also request your bank to set up a monthly transfer of a set amount of your income to a separate bank account, which you can then later take out to allocate into stock market funds.

5. Learn Fundamental and Technical Analysis

At some point, you’ll want to know how to individually identify high-performing stocks. You can do this by combining two key methods in your stock assessment strategy: fundamental analysis and technical analysis.

Fundamental analysis (FA) involves evaluating a company’s economic indicators and profitability. This includes its market position, competitive advantages, management team, and other future growth prospects.

Technical analysis (TA), on the other hand, relies solely on the stock chart movements and the information derived from the chart. Techniques like relative stock index (RSI), money flow index (MFI), and moving cost average are examples of types of technical analysis.

This includes analysing various technical indicators, stock price movements, and volume differences of the stock or fund to determine its future growth potential.

Employing both of these habits in your overarching stock investment strategy can help you find the best stock. The initial phases of this strategy will feel like a trial-and-error as far as effectiveness goes, but once you get the hang of it, it can (figuratively) pay dividends.

6. Set Stop Loss

One of the worst things that can happen when stock investing is having your stock value dip amidst a massive sell-off. If you have no safeguards in place, this can cause your stock portfolio’s value to plummet, causing you to lose immense stock value.

If you don’t want to bear the brunt of this, then it’s highly urged that you set a stop loss. Just like how most business people set up a different identity for their business as a non-negotiable to avoid personal liability, you should also do something similar to your stock investment—in other words, set a limit order.

One of about 10% of the buy price would do for most businesses, but make adjustments accordingly to fit your needs.

As a final word, always do your own thorough research and make informed decisions that suit your individual circumstances.

Good luck in your investment journey!