A stock is a certificate that proves that you own a fraction of a company or a corporation. It proves that you have bought a part of that company and that you pay a certain percentage of the company, whether it is salary for their employees, expansion projects, buildings, loans and etc. Once you own a stock, you are referred to as a stockholder or a shareholder. To put it simply, a stock is the representation of how much you own of a company. And with every bit of stock you own, gives you a little bit of voting power. The more you own, the more you have to say about what the company will be doing and what it must do so that your money is not wasted and grows. With that said why should you invest in stocks and become a stockholder?
Investing in company or corporation provides you a whole lot of benefits and will more likely help you in the long run, as long as you invest in a good company that will not waste your money. Did you know that investing in a company gives you much more profit than investing and depositing to your bank account? When you deposit to your bank account, it grows by a measly 1% a year. I know that’s not much but, you say that you earn from exactly doing nothing, right? Actually, you’re not earning. Each year the value of money depreciates by 2-3%, which means that you are not profiting and you’re money is also losing its value. But, when you invest in a company with good overall standing, your money is sure to grow by 4% a year. So, even with the 2% depreciating value of money every year, your money will still grow by 2%.
So, do you really earn money from this? Well, eventually, you will. When you invest, you are taking a risk. You are risking your money for an outcome that cannot be fully predicted. Remember why I said many times in this article that when you invest in a good company your money will not be wasted? This is why. The world market is a very unstable and volatile market. It can go up in a day, and go down the next day. You will never know what will happen. Even in minor markets, things like this happen. The outcome can almost be never predicted. But, you can help yourself avoid being a victim of failed investments. Before investing, do your research. If a company is new, then do a background check on who is running the company or organization. Who are the people behind it? Are they reliable and hard-working? The next step would be fighting for your money. Buying a share or stock in a company gives you the right to speak up and appear in meetings and give them a piece of your mind. Tell them what you think. Do not let them decide on their own because they are still using your money, and your money is important to them.
I do hope that you learned something about stocks and investing in them.