Investing your landscaping profits in the stock market.

If you have gotten to the stage where your landscaping business is making more money than your expenses and you are able to start putting money away, have you thought about investing it? Sure you can take what ever money you have left over and buy more landscaping equipment, but is that going to give you the return on investment that stocks could offer? In this discussion from the Gopher Lawn Care Business Forum, we hear from multiple landscapers who have taken their business profits and made even more money from investing in the stock market.

One lawn care business owner wrote “I have always told people, never invest money in the stock market you can’t walk away from. If you are new and sometimes even a seasoned investor and watch your stock by the hour, you will drive yourself insane. I always invested and then checked in every once in the while, I still follow company activity but you will lose money if you are trigger happy.

To all that are reading this, I will offer the same advice I offered my son who is final year in college for his certified financial advisor degree.

  • Set up a bank account that you will not touch.
  • When it reaches $1,000, leave the money there but start a spreadsheet in Excel.
  • In this spreadsheet start buying and or selling stocks, make sure you record trade/brokerage fees and see how you do.

He did start this around the age of 16, he started into the stock market buying and selling about 18 months ago, his rate of return for last year was 27.6%, just finished his tax return.

Not everyone is going to be able to do this, he does a tremendous amount of research and some of it through his studies. I have been shocked at some of the stocks he has found in their early stages that took off.

Anyhow play with play money to educate yourself then talk to a professional financial planner and go from there.”

A second lawn care business owner added “I am not a stock wizard, I am a landscaper for gods sake but I have been very successful at that and now I have been interested in how the other half lives.

I have done my research and have slowly over time been trying to educate myself and bought your typical mainstream stocks. I have mostly taken a beating on them and the gains are small because they go for a higher share price so you can not buy as many.

I started getting into the pennystocks a couple years ago and have found that when I lose, it equates to nothing and the gains are quite nice compared to the investment. I learned a lot more from these stocks than I did from buying the majors and they are far more affordable to lose.

Pennystocks are a semi long haul stock but in most cases you don’t want to keep them long term.

For example:

  • I picked this one stock that was in a small company with new ways to create ethynol and I bought the stock at $.07 cents per share.
  • I dumped $210.00 in 3,000 shares and over the course of 3 years. I have seen it drop a couple pennies and rise a few until it got up to .46 cents per share and I dumped it for about $1,380.00 with a $1,170.00 profit.

What I like about this type of stock is they are cheap and affordable to where you can buy a few thousand shares for nothing and if you lose it only equates to a loss of having a bad habit such as smoking for a month.

Every month I buy about $300.00 worth of these types of stock in all areas with what boils down to fun money each month.
In fact it started with the original stock I bought and sold. I took that $1,380.00 I got back and bought a few thousand shares each of 6 small stocks like I originally did and then one of the six rose to like 10 times what I paid and I dumped that money back into even more individual stocks with a few thousand shares each. Now I have about 50 different stocks and if they were to have modest returns, I would have a good deal of money if I sold them off. Certainly not enough to retire or buy a house

but probably close to about $60,000 and it all started from the $210.00 stock I bought.

Guys like us don’t have the disposable cash like others do and if you invest in a stock you need to have at least a couple thousand shares to make a splash and a stock going for say $4.00 per share you would need $8,000 and plus order fees to obtain a couple thousand shares.

Most of the people I work for are wealthy and when they sometimes want to look beyond that I am a landscaper and we actually have a real conversation about finances they generally reinforce what I already know and I am slowly finding out.

That is how the rich get richer by doing their research and invest in these little up and coming technologies that go literally for pennies a share and spread it out over a ton of different stocks.

None of them by themselves are gonna make you rich but if you have say 50 stocks with an average net gain of $1000 to $1500 each it all adds up to a nice sum.

I am sure I have not said anything most of you don’t already know, I just figured I would add my two cents from my experiences but at the same time I would be the first to say I won’t be quitting my day job anytime soon.

I would probably say some of the pro’s of investing in penny stocks are low investment amount, low risk because they can be bought cheap.

Some of the cons I guess would be being you are buying something for pennies on the dollar. It does take time to grow and patience is a major factor which I would gather from my short time doing it holds true for any stock big or small.

I find it is a safe bet for small guys like us who don’t have as much disposable income as a wealthier investor and it really gives you a insight to not only how the stock market works but how all stocks essentially start from the bottom.
Obviously there are some stocks that start pretty high in the beginning like how a facebook did but in the end, how many shares is a guy like you or me gonna buy when they are going for $35.00 per share. I find from the stocks that I had success with, the lion share of the money I made was due to they went so cheap I was able to by 2, 3 even 5 thousand shares to start with that cost next to nothing. By doing so all you need is the stock to go up 20 to 30 cents and being you have say 5,000 shares it translates into a nice little return.”

A third added “I think penny stock investing is a horrible idea. I have invested in penny stocks but only a small investment just to speculate. I would never recommend anyone to invest all or most of their capital on these types of stocks.

First of all they are penny stocks for a reason. They are so thinly traded compared to a blue chip company which means a much higher bid ask spread. So for some penny stocks you may need a 10% or more gain just to break even and that is before transaction costs. This is higher than the average stock market historical performance of around 9%.

You run the risk of losing your entire investment because these companies are very weak in terms of financial strength. They usually aren’t well capitalized and often are very start up type companies.

There is risk of other investors exploiting the thinly traded nature of the stock and distorting the market by inflating the share price and the selling when price rises. This is called a pump and dump scam. People will buy stock and make up lies about company to get other people to buy. When stock price goes up they dump their shares and the stock plummets because of artificial demand.

Sure you may get lucky and find that biotech company that has a drug approved by FDA and price skyrockets but I can assure you 9 times out of 10 you are investing in duds.

Just my two cents. I work in the industry and have a finance degree do I know a few things about investing. I personally buy strong companies that have been around forever. I’m not trying to get rich overnight and plan to slowly build capital base.”

Read more about Lawn Care Business Bidding Tips, Upsells, And Disasters To Avoid. Learn how to improve your bidding process with this lawn care business book and be prepared before hand by knowing what you should be looking out for before a problem occurs.ā€¯

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