How to Generate an Ongoing Income From the Stock Market at Minimal Risk

The stock market can be a risky place to invest your money – if you don’t know much about the different products available. By products, I mean stock market activities beyond simply guying and holding stock. ‘Contracts for difference’ (CFDs) and options are just two examples of how a shrewd investor is able to generate ongoing income from shares with minimal capital investment.

Options and CFDs are stock market products which allow you to control a particular stock without actually owning it. Benefits of using these products include:

  • Risk reduction – because your capital outlay is minimal, your exposure to any losses due to price movements is also reduced. Minimum and maximum buy and sell levels can be set, further reducing your exposure to risk.
  • Ongoing income potential – using a strategy based on the selling of options for example, you are paid an income up front by the buyer of the option. This gives you real income in addition to any additional benefits received from owning a stock.
  • Flexibility – by using these products you are maintaining options for yourself in terms of your activities on the stock market. You are not limited by having all your capital tied up in one place, which I wouldn’t recommend anyway.

Options and CFDs aren’t available on all stock markets worldwide, but these days that should not limit investors who are looking for good returns on their investment for minimal risk. With access to foreign markets through the internet and etrading, it is possible to extend your financial investment strategy beyond your geographical limitations.

The key to making money on the stock market is and always will be knowledge. Give yourself the financial education you deserve by teaching yourself about investments and become financially literate. This gap in modern formal education systems can be filled, but only through action on your part to teach yourself.

Having said that, it is important to realize that you are not alone – there are plenty of resources and sources of information out there, both free and at a fee which can help you speed up this process. The winner in this is you – you have the ability, no matter what your background, to give yourself a financial education which has the benefit of improving your life financially, and as a result, in every other capacity as well.