Wealthiest individuals don’t necessarily stash billions in bank accounts – instead, they own shares in successful companies and amass fortunes through ownership of stocks. Elon Musk became one such example due to the rapid increase in Tesla stock price; others such as Mark Zuckerberg from Facebook, Jeff Bezos from Amazon, Bill Gates from Microsoft and Warren Buffett from Berkshire Hathaway also possess substantial wealth due to stock ownership.
However, even those not associated with Tesla’s founding, such as individual investors, became millionaires by purchasing shares when they were relatively cheap – this shows the incredible power of stock markets as an infrastructure through which both individuals and corporations buy and sell shares.
What Are Shares, and Why Should They Matter
As soon as you purchase shares in any company, you become part of their ownership structure and receive dividends and any increases in value of those shares – something such as Tesla illustrates: one share cost about $17 in 2010, yet now stands at over $319 (as of June 13, 2025)! Buying Tesla stock could make you quite wealthy over time!
In this article, I’ll outline how to invest in the South African and Zimbabwe stock markets while offering tips to minimise your investment risks.
How To Invest In the South African Stock Market
South Africa provides several user-friendly platforms for buying and selling shares, the easiest of which is EasyEquities, which I highly recommend as the first step for beginners. EasyEquities stands out as it features user-friendliness as well as reasonable fees; here is how you can start:
Steps for Starting to Invest on EasyEquities:
1. Register on EasyEquities:
South African citizens will find that completing registration should take no more than 20 minutes; you will require both a valid bank account and, optionally, an individual Tax Number to register successfully.
For foreign investors, registration remains possible but will require sending FICA documentation via email. This includes two forms of ID, such as a passport or a driver’s license, as well as bank information and tax numbers.
2. Starting Trading: You can get started investing with as little as R10 on the Johannesburg Stock Exchange (JSE), making it ideal for novice investors looking for their start in investing. Furthermore, fractional shares make this an even better platform to begin investing with!
EasyEquities gives access to an expansive variety of shares, making it simple and straightforward for investors to diversify their portfolio by participating in some of South Africa’s most promising businesses.
Investing in the Zimbabwe Stock Exchange (ZSE)
Zimbabwe Stock Exchange (ZSE) has consistently outshone other stock exchanges across Africa in terms of performance over recent years, leading the continent in 2020 as the number one performer. Investing in Zimbabwe could be among the smartest decisions, particularly given its hyperinflationary environment; here’s how you can invest:
Steps for Beginning Investment on the ZSE:
1. Register on ZSE Direct or C-Trade:
Zimbabwe residents may access ZSE Direct through its Android app; for those outside Zimbabwe, C-Trade may provide an effective alternative (with mobile applications available both for Android and iOS devices).
2. Receive Your Central Securities Depository Number: After signing up, you will be issued a Central Securities Depository (CSD) number, which allows for trading to commence. Once this has occurred, trading can commence immediately.
3. Fund Your Trading Account:
You have two funding options when funding your trading account on the ZSE: bank deposits or Ecocash payments. Be mindful that trading takes place using Zimbabwe Dollars with minimum transaction amounts available per transaction.
4. Utilise Training Materials: The ZSE offers helpful educational material regarding the ZSE Direct platform and general stock market trading basics; visit zsetraining.co.zw for resources.
Minimising Risk when Investing in the Stock Market
Investment can be lucrative but also risky; most average investors often lack an understanding of which stocks to purchase at which times. There are strategies available that can reduce this risk easily:
1. Diversify Your Portfolio: Don’t put all your eggs in one basket. Diversifying allows you to spread the risk by investing in multiple companies; three to seven stocks is ideal.
2. Dollar-Cost Averaging: This strategy involves purchasing shares at regular intervals – weekly or monthly purchases can help minimize risk associated with investing a lump sum at once and take advantage of market fluctuations to gain maximum returns.
3. Choose Unit Trusts, ETFs or Index Funds
As a beginner to investing, I suggest considering investing in Exchange Traded Funds (ETFs), unit trusts or index funds as they’re professionally run to make decisions for you without you needing to manage every stock purchase and sale yourself. While they tend to be safer options, I still recommend actively creating your portfolio of stocks yourself!
4. Do Your Own Research: Aim to use common sense when selecting stocks; look for companies that are performing well currently but also show potential for continued expansion over the long term. Don’t blindly follow what everyone else says–make informed decisions using independent research instead.
Conclusion: Why the Stock Market Can Help Build Wealth
Investing in the stock market can be one of the best strategies to create long-term wealth. While investing is not an overnight success story, with time and patience, your investments could grow significantly over time – even when prices dip, there’s often an opportunity to buy additional shares at reduced cost!
Before investing, take time to gain knowledge and become educated on the process. As co-owner of a company, you are eligible for an equal share in its profits; your investments could appreciate over time as part of an endowment portfolio that provides significant wealth accumulation over time.
Stock market investment provides the chance for financial expansion. So if you are thinking about entering it for the first time, be mindful to do your homework, start small and commit long term.
