While we have all heard of the stock market, only some know about it in enough detail to invest. With an array of options to choose from and scare stories of people losing thousands, it can be easy to dismiss the stock market, but you could be losing out. We take a look at ten ways to earn money from the stock market, each with its risks and rewards:

Dividend Investing

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Companies sometimes distribute a portion of their profits to shareholders through dividends. You can earn a regular income stream by investing in companies with consistent dividend payouts. This option is preferred for people seeking regular payouts during retirement. 

Options Trading

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This strategy is becoming one of the most popular over the last several years and for good reason. Futures and Options (F&O) are investment derivatives in the stock market. They allow investors to speculate on the future price movements of an underlying asset (like stocks, commodities, or indices) without directly owning the asset itself. Options trading is deployed by most traders these days as it can act as income generating strategy and has the potential for massive gains within a quick window of time. That being said, it can be risky if you do not know what you are doing. It’s also essential to choose the right options trading platform in the market as picking the wrong one could cost more money and/or be overly complicated for your skillset. Public.com is one of the best options brokers around for a new trader as it has the lowest fees and a intuitive design that makes it easy. Its app is easy to use and has features so that options traders can focus on what’s most important: Finding new options and trade opportunities.

Capital Appreciation

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Capital appreciation stocks are the driving force behind many investment strategies focused on long-term growth. This strategy focuses on buying stocks, expecting their price to increase. You will need to monitor your stocks in the market and sell them when you feel they are at an optimum price.  You capture the capital appreciation when you sell these stocks at a profit.  The main advantage is the possibility of substantial returns if the company’s stock price soars. However, having a broad portfolio of stocks is advisable rather than putting all your eggs in one basket. 

Real Estate Investment Trusts (REITs)

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REITs are a unique investment option that allows you to invest in real estate without directly buying, managing, or maintaining properties. REIT companies own or finance income-producing real estate and must pay out most of their taxable income to shareholders as dividends, making them an attractive option for income-oriented investors. This type of investment is easy to access and adds diversity to your portfolio. Along with dividend income, some REITs may experience capital appreciation, where the value of the REIT shares increases over time.

Peer-to-Peer (P2P) Lending

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Peer-to-peer lending offers an alternative way to invest money and earn a return. Under these schemes, lending platforms connect borrowers and lenders directly. You can invest in loans to individuals or businesses and earn interest. However, P2P lending comes with the risk of borrower default, which is off-putting for cautious investors. 

High-Yield Savings Accounts (HYSA)

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While not technically part of the stock market, some high-yield savings accounts offer interest rates that are more competitive than traditional savings accounts. This can be a good option for those seeking a safe and steady return on their money. You can use a HYSA as soon as you earn money and gradually increase the amount you save as your salary grows. 

Bond Investing

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Bonds are loans issued by companies or governments that offer a fixed interest rate payout over a set period. A bond’s maturity rate is when the issuer must repay you the principal amount you invested. Bonds can have varying maturities, ranging from a few months to several decades. Bonds are generally considered less risky than stocks but offer lower potential returns.

Interest-Paying Stock Market Accounts

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Interest-paying stock market accounts aren’t a specific investment product but a feature some brokerage accounts offer. These accounts allow you to earn interest on your uninvested cash balance held in the account. These accounts offer an excellent way to earn a small return on your uninvested money and are considered low-risk compared to other investments. 

Short-Term Trading (Day Trading or Swing Trading)

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Short-term Trading, also known as “Day Trading” or “Swing Trading,”  involves actively buying and selling stocks within a short timeframe. Generally, this process potentially captures small profits on frequent trades, so more effort is required for this option. This is an activity that some people are comfortable with, but short-term Trading is a hazardous strategy that requires significant skill and experience. Some financial companies can help you with short-term Trading for a small fee, which is something to consider if you’re unsure precisely what you’re doing. 

Invest in Dividend-Paying ETFs (Exchange-Traded Funds)

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Dividend-paying ETFs distribute a portion of the dividends they receive from the underlying companies they hold. This provides a regular income stream, benefiting retirees or those seeking additional income. ETFs generally have lower expense ratios than actively managed mutual funds, potentially boosting overall returns.