‘Entrepreneur’ is the latest buzzword in the business world refers to a person working for himself/herself with the aim to make a profit. However, the definition can be a bit vague but the core point remains the same: Creating something profitable. As long as you fit in this criterion, you’re an entrepreneur! Therefore, being an entrepreneur is much more than being a businessman, innovator or creator. In fact, we believe stock investing is also a form of entrepreneurship as both involve analysis of business models, products & services, markets, and competitors before you make an investment decision. When someone plans to start his/her own company, have to do the same analysis to give shape to his/her ideas.
Some people will find it a bit vague as in stock investing; we invest in companies that already laid the groundwork of their businesses while in entrepreneurship you start with ‘Zero’. Despite, there are a lot of similarities in stock investing and entrepreneurship.
Similarities in Stock Investing and Entrepreneurship
Here, we’re going to discuss the different aspects that show the similarities in stock investing and entrepreneurship:
- Business Understanding: Whether to create a profitable business on your own or invest in the stock of a company, you will require doing the thorough analysis of the markets, understanding of the business model, who are competitors, and strength and weakness against those competitors, etc. Some people might argue that in stock investing, we invest in someone else’s company while in entrepreneurship, we invest in our own. That’s fair! But, as you know that stock considered as part ownership in a company so if you’re investing in a company’s stock that means you’re a part-owner of that company.
- Risk-taking: Entrepreneurs and stock investors are recognized for taking a risk in pursuit of starting a new business and investments respectively. An entrepreneur takes a leap of faith in creating a profitable business similar to an investor who uses his money to invest in stocks of companies in believing that the company will perform well in future and the value of owned shares will increase with the companies’ growth. If the investor picked the wrong company, it is very likely that he/she would end up losing money similar to entrepreneurship where capital could be wiped out in a wrong business idea.
- Goals: Entrepreneurship is all about committing to your goals and staying on the track of achieving it. Similar to entrepreneurship, the stock investing is all about sticking to your investment goals despite the short-term fluctuations, in order to achieve your financial goals. In both journeys, you will see your plans falling apart but an entrepreneur or investor is one who doesn’t give up and continue walking down the path to achieve certain goals.
Apart from this, there are a lot of other minor similarities in stock investing and entrepreneurship. In fact, we can say that investing in stocks is also a form of entrepreneurship.
Why Stock Investing is Better than Entrepreneurship?
Entrepreneurs take on frightening challenges, develop innovate products, and services with the idea to change the world. However, to achieve something this big would require a large sum of money. By any chance, the business idea fails, all your money will be wiped out in mere days or months. Meanwhile, stock investing would require comparatively less money than entrepreneurship. Besides, in entrepreneurship, you will be bound by your venture and its success or failure but in stock investing you can simply buy stocks of companies that already laid its groundwork.
Moreover, stock investing provides the benefit of sorting out your mistakes, in case you choose the wrong business idea. As for entrepreneurs, it is a quite complicated task. But, in stock investing you can invest in as many as business ideas you can remember and diversify your investment portfolio to mitigate risk and boost the return potential. However, it is not possible in entrepreneurship since you’ll be focused on creating a profitable business. If things go sideways, you may end up a large portion of your capital in the failure of a single venture.
Sometimes, your decisions affect the ones surrounding you. Many working-class individuals aspired to become entrepreneurs and chase their dreams. They quit their full-time jobs to pursue their dreams. Because of this family suffers most and go through a lot of hardships. This is a risky ride where your actions are affecting the people around you. On top of that quitting job to pursue your dreams is already extremely risky especially when there are people who depend upon you for financial support.
In stock investing, you can continue without quitting your full-time job and still pursue your goals without any hardship.
Note: All information & data provided in this article is for the educational purpose as well as to give general information for investment reasons, not to provide any professional advice or service. Views & opinions are not biased against the company and do not affect any official policy or any other agency, an organization within the content.