I bet you have heard about the stock market before
. It is considered to be one of the best places to invest your money over the long term and it can even lead to a lot of wealth over the short term if you buy the right stocks. So, what exactly is it? And how do you go about buying stocks?
If you are wondering these questions then you will want to start learning about the stock market and how it works. This article will give you a brief intro to it and what the advantages of investing into it are.
Companies are split into millions or billions of different shares called stocks. Anybody can buy a stock and become a partial owner of a company. For instance if you buy McDonald's stock then you would actually own a portion of McDonalds and would make money as the company grows.
Some companies even offer dividend paying stocks which are stocks that will pay you a monthly income each and every month simply by holding onto them. These dividends represent a small portion of the company's earnings. Since you own part of the company it would make sense that you make money as they do.
Now the stock market is simply the place where stocks are bought and sold by people around the world. Anyone can participate in the stock market by opening up a brokerage account and placing orders on specific stocks.
So, why would you want to invest into stocks?
1. Long Term Growth
This is the biggest reason why you should invest into stocks over the long term. They simply outperform all other major asset classes. If you look at how stocks have performed over the long term and compare that to things like CDs, Real Estate, and Bonds, you can see just how great of an investment they have been in the past and how good of an investment they will probably be in the future.
2.Income
Because stocks do offer dividends they can help you obtain some extra passive income. As your money grows over time the amount of income that you receive off of the stock also increases.
There are plenty of professional investors out there who started investing in money when they were young and now that they have been doing it for a while are able to life off of the dividends that are produced by their investments alone.
If you are smart about it the stock market can lead to wealth and passive income and can really be a fantastic place to invest your money.