We all have our own favourite brands or companies we trust and want to see do well.
What’s vital is that we don’t pigeon-hole ourselves as just consumers. If you truly love a brand or product & think it will still be around in 30+ years’ time, then becoming an owner in the underlying company needs to be a strong consideration.
There’s a place to go to buy small pieces of companies with the aim of making a return. Of course, I’m talking about the stock market. A lot of people seem scared of this place, but why? It’s just a place to buy and sell items of value… like any other market!
The stock market is less about speculation & more about ownership.
Let’s illustrate some examples to get to the point:
Say you love Marvel Comics. By buying shares in Disney (owners of Marvel Comics), you will own your own piece of Marvel & all the other businesses under the Disney umbrella (they have a glorious portfolio). When you go and watch the new Avengers movie, you’ll be contributing to the business you now own.
Another example, you’re a takeaway fanatic and use Just Eat on a regular basis. Just Eat are available on the London Stock Exchange for under £10 per share. why would you not invest in them? they make money from you so why not make money from them.
One more example for good measure, you always shop at Tesco no matter what, other supermarkets just don’t feel right. You collect Clubcard points religiously and know some staff by name at your local store. You have the option to buy Tesco shares and hold them for as long as you wish.
In all three examples above, your spending habits can be used to create revenue for businesses where you have an ownership stake. In essence, your spending can be fuel to power your portfolio ahead.
Some companies pay a dividend which means positive cash flow for stockholders. I have an iPhone and Apple shares. I pay my phone bill and Apple pays me dividends. It’s a most cosy relationship.
I can’t help but drink Ciroc Vodka (in moderation, of course), but I also have shares in Diageo, owners of the Ciroc brand. I buy bottles of the lovely vodka & in return, Diageo pays me dividends twice a year. We’re literally on the same team.
A note on due diligence
Though I stand by my main point; people should buy shares in companies that they trust and believe in. This doesn’t mean we should skip the due diligence required to assess a company’s investment worthiness.
Make sure any stock considered for purchase fits in with your criteria for a quality stock.
A 5-step guide
- Look at your spending habits and reflect on the brands that you think you can’t live without.
- See which companies are publicly traded & look at the overall quality of the business.
- Carry out your due diligence, look at the long-term trend and seek expert opinions.
- Consider buying shares in quality companies, doing so tax-efficiently & with low transaction cost (ISA’s are tax efficient and Freetrade will be launching soon with feeless trading)
- Patiently play the long game and consider new information as it comes in.
Exploring the above will help your transition from a consumer to an owner. Imagine, a whole organisation of people working hard to try and earn you a return on investment whilst you put in no effort at all! this is what you deserve.
It doesn’t pay to be a loyal customer, but it can pay to be a loyal owner. If you really love that brand or company, you can prove it by putting your money into the actual business itself.
Check out my blog for more investing & personal finance insights – https://www.richestmaninlondon.com.
Disclaimer: I am not an investment professional and this is not investment advice. Always do your own research.