Can You Get Rich Quick Investing in Stocks?

Indeed, it is entirely possible to get rich very quick in the stock market, but it's just as easy to lose your fortune just as quickly. There is one thing that comes standard with the richest people in the world: they didn't get rich quick. The infamous Warren Buffett built his fortune on many decades of solid returns year after year; there was no one year where Warren Buffett made all his fortunes.  Most billionaires grew wealth - they didn't gamble it or magically create it. It was done over long years of hard work and above average returns.

Big Returns Mean Big Risk

If there is anything to know about the stock market, it is that greater returns mean greater risk. To get rich quick in the stock market, you must be willing to risk everything on what may amount to a very underdiversified portfolio. People looking to get rich quick usually utilize high leverage to try to generate returns that are simply not normal or achievable over the long term. While using leverage to get rich quick sounds like a great idea, when you generate losses, they'll be twice as deep. Leverage is a complete no-no for the long term investor, but instead left to the risky speculator or day trader.

Stock Options Should Be Used Responsibly

Stock options are also known for making investors incredibly rich quickly, but they should be used properly and not as a tool for unlimited leverage. Stock options are the right to buy stock at a certain price sometime in the future. It's like placing a down payment on a home to buy it next year. After buying the contract with your down payment, you'll be able to buy the home in the future, but you probably wouldn't want to buy it for $100,000 when the market says its only worth $80,000. You  would not put down a 10% deposit on 10 different homes, instead of simply purchasing one home, so why should you do it with stock? Stock options should be used to limit downturns or as a way to hedge losses in case your trade goes the other way. Never try to leverage up your stock options because the losses are far greater than imaginable. Stock options often rise and fall 50-200% on a daily basis. It's a dangerous game that long term investors have no business risking, unless used responsibly.

Buy and Hold to be Rich in the End

Buying and holding for the long term is often what works best for investors because it provides the greatest return with the most minimum amount of risk. Good businesses grow and will continue to grow over a period of decades. As these companies grow, so should their stock prices. Being smart and well positioned in the stock market will allow you to grow rich, though generally not quickly.  However, we would all rather know we'll be rich when it comes to retirement than to gamble on becoming rich today and losing it all tomorrow.