You are already halfway through towards financial freedom when you get the question “How to make money in stocks.”
Why do I say that?
Most people are lazy to research how to get more of the idle money they have. All they do is put it in the savings account or mainly in the fixed deposits.
Such people are most likely to be in trouble in the coming future due to inflation. Inflation is nothing but an increase in the price of goods and services and a decrease in the value of money.
A classic example of inflation would be the increase in petrol prices over the years. In April 2010, the price was ₹48, and in July 2021, it nearly doubled to ₹108.
You cannot beat inflation if you keep your money in savings or fixed deposits because of the mere returns they provide. Hence investing in stocks would be one of the best things to do.
Investing in stocks can be one of the most rewarding options; you can earn in 1000s or even in lakhs daily.
In this article, you will learn Top 2 ways to make money in stocks.
- Investing:
- Lumpsum Investment: Invest a lump sum amount in stocks for a long period of time and create wealth with the compounding effect.
- Monthly Investment: Invest regularly in mutual funds every month via SIPs and achieve your long-term goals like building a house, buying a car, etc.
- Trading:
- Intraday Trading: Trade daily and earn from thousand to a lakh.
- Positional Trading: Take trade and hold for a couple of days, weeks to months.
Content:
- How to earn money from Share Market – Lumpsum Investment
- How to make money in the stock market – Monthly Investment
- How to earn money in the stock market daily?
- Quick Summary
- FAQ(Frequently Asked Questions)
First, let’s learn how to earn money from the share market in the long term.
How to earn money from Share Market – Lumpsum Investment
One of the most well-known ways of investing for the long term has been through equities/shares. So what are shares?
Shares are the financial instruments issued by listed companies to the general public. When you buy a share of a company, you actually buy a part of ownership in the company proportional to the value of shares.
Owning shares will entitle you the voting rights, profit-sharing, and also the risks associated with them. Shares can be bought and sold on stock exchanges through stockbrokers. Shares carry the highest amount of risk.
Equities are considered to be highly risky but are also famous for giving great returns. Some of the best companies have yielded more than 20% CAGR in the last 10 years.
So if you invested 12 lakhs 10 years ago in a company that yielded 20% CAGR, your money’s growth table would look something like this:
| Year/Month | Value |
| 0 | 1200000 |
| 1 | 1440000 |
| 2 | 1728000 |
| 3 | 2073600 |
| 4 | 2488320 |
| 5 | 2985984 |
| 6 | 3583180 |
| 7 | 4299816 |
| 8 | 5159780 |
| 9 | 6191736 |
| 10 | 7430083 |
That’s a staggering return of 62.3 lakhs (7430083-1200000). Learn everything about Equities Here.
Next, we will learn about how to make money in the stock market by investing every month.
How to make money in the stock market – Monthly Investment
You can invest a small sum of money every month and earn huge profits in the long term via Mutual Funds. So what are Mutual Funds?
Mutual Funds are the financial instruments created and managed by Asset management companies (AMCs). AMCs create mutual funds by collecting money from a large number of investors. This pool of money will be invested in multiple securities like equities, bonds, etc.
Investing money in multiple securities will be done by professional fund managers with maximum diligence to achieve the highest possible returns. Every mutual fund has a different objective like long-term growth, short-term growth, tax savings, etc.
Mutual funds carry less risk due to the diversification of funds in multiple securities.
Let’s say you start investing ₹ 5000 in mutual funds every month starting today for the next 10 years. Here’s how the profits would look like:
| Investment | Time Period | Rate of Interest | Total Investment | Investment Value in 10 years | Profit |
| 5000/month | 10 Years | 8% p.a. | 6 lakhs | 9.06 lakhs | 3.06 lakhs |
Some mutual funds have given over 15% annual returns over the years.
Now that you have learned about 2 most important ways of investing for the long term let’s know how to invest and make money daily.
How to earn money in the stock market daily?
Intraday Trading
I have been active across many online stock market communities, and I usually come across this question: How to earn 1000 rs per day from the share market?
Well, you can earn 1000 rs to 1 lakh rs per day in the share market via intraday trading. So what is Intraday Trading?
Intraday Trading is quite a debated topic amongst the experts in the Stock Market. Some argue it to be highly lucrative, while most of them call it highly risky. Some have even called it a gamble.
Intraday Trading or Day Trading is the process of buying and selling financial instruments on the same day. Intraday trading has a fixed timing, if you do not close your positions within that time, the positions will be automatically closed by the broker. Usually, the timing of Intraday trading will be from 9:15 am to 3:15 pm.
Earning a daily share market profit of ₹ 1000 each isn’t as easy as it sounds, to be a successful intraday trader, you need to be willing to do the following things:
- Learn the Fundamental Analysis & Technical analysis of stocks.
- Monitor the markets every single day.
- Keep up with the News religiously.
- Have a trading strategy that works.
- Discipline of a soldier, etc.
You can learn intraday trading by reading our Intraday Trading for Beginners Guide. The guide covers:
- Meaning, advantages, and risks of Intraday Trading.
- Top Intraday Trading Strategies that work.
- Technical Indicators to find the right opportunities.
- How to find the right stocks to trade.
- How to do Intraday Trading? (How much risk should you take on every trade, what should be stop loss etc.)
Positional Trading
It is a trading style where you buy shares with the intention of holding them for a couple of days, weeks to months, or sometimes years. Usually, positional traders are trend followers; they find a stock that is entering a certain trend and keep invested in it until the trend is exhausted.
Except for stocks, Intraday & Positional trading can be done in Futures & Options contracts. Learn everything about Futures & Options here.
Quick Summary
- The answer to your question, how to make money in the share market is via two most important ways:
- Investing: If you want to invest for long periods of time, you can choose to invest in stocks or mutual funds. Investing in mutual funds is less risky than investing in stocks.
- Trading: If you wish to make money daily, you can do intraday trading. On the other hand, if you want to trade for a slightly higher time frame, you can choose Positional Trading.
- The risk level of these investment types can be categorized into:
- Long term investments via Equities/Shares – VERY HIGH RISK
- Monthly investment via Mutual Funds – MEDIUM RISK
- Intraday & Positional Trading – HIGH RISK
FAQ(Frequently Asked Questions)
There are certain steps to be followed if you are a beginner and want to earn money from the stock market.
- Find out what type of investment suits you best. (Long Term, Short Term or Intraday)
- Do not blindly follow the trends in the stock market, do your research.
- Do not simply focus on the lowest and highest prices.
- Be disciplined with your investment habits.
- Remember investment is always done on the surplus money left with us.
- Set your goals for the investment.
- Never take emotional decisions while investing.
Yes, you may invest Rs.1000 in the share market. It is advised that you do your research and select the best possible stocks to invest in. You could either take one stock for the whole amount or multiple stocks in the same amount, depends on your choices.
Earning money from stocks, easy or not can be subjective. If you have a clear understanding of the stock market and you have patience and discipline, then things might get simpler. It requires dedication and thorough analysis to be able to make money from stocks.
Of course, there is no upper limit on intraday trading until the stocks you select have that volume and you have the capital to do so. Remember Intraday trading requires close monitoring and thorough research.
