I know people who don’t work and only invest in the stock market. They make more than enough to pay their bills and stash a good amount away? How do you do that? How much do you need? How do people make money in the stock market in good and bad market (bull and bear)? I know stocks are cheap right now, but once stocks reach their highs again, how do people make money? Thanks in advance to all whom answer.
In order to make a living you investing in the market, you have to start with a large amount of capital. How large will depend on what your needs are, and how much you need to live the style you want. Example: if you have 1,000,000 and make 10% a year, that’s 100k, but then you must subtract taxes, so you’ll have 60-70k to live on. However this doesn’t give you any margin for error in case of a bad year.
The solution is a mixture of growth stocks and dividend paying stocks. If you invest largely in dividend paying stocks you’ll have a solid income, though sometimes dividends do get cut. Wells Fargo just cut theirs by 85%. Dividends are nice, because you get paid in up or down markets. Most [not all] people who make their living from the market are living off the dividends.
Once a stock reaches a high (I’m not good enough to know when this occurs, but some might be able to.) you can sell that stock and then invest in another one with better prospects.
In every market including this one, there are growth stocks and duds.