What is a stock and why should you invest in it?

A share is a certificate that proves you own a fraction of a company or corporation. It shows that you have bought a part of that company and that you pay a certain percentage of the company, be it the salary of your employees, expansion projects, buildings, loans, etc. Once you own a share, you are known as a stockholder or shareholder. In a nutshell, a stock is the representation of how much you own of a company. And with each piece of stock you own, it gives you a little bit of voting power. The more you own, the more you have a say in what the company will do and what you need to do so your money doesn’t go to waste and grows. That said, why should you invest in stocks and become a shareholder?

Investing in a business or corporation gives you a lot of benefits and is more likely to help you in the long run, as long as you invest in a good business that doesn’t waste your money. Did you know that investing in a company gives you much more profit than investing and depositing in your bank account? When you deposit into your bank account, it grows a measly 1% a year. I know it’s not much, but you say you earn exactly by doing nothing, right? Actually, you’re not winning. Every year, the value of money depreciates by 2-3%, which means you’re not making a profit and your money is also losing its value. But, when you invest in a company with a good overall reputation, your money is sure to grow 4% a year. So even with 2% depreciation in the value of money each year, your money will still grow by 2%.

So do you really make money on this? Well, eventually you will. When you invest, you take risks. You are risking your money for an outcome that cannot be fully predicted. Do you remember why I said many times in this article that when you invest in a good company your money is not wasted? This is why. The world market is a very unstable and volatile market. You can go up one day and down the next day. You will never know what will happen. Even in minor markets, things like this happen. The outcome can hardly ever be predicted. But you can help yourself avoid falling victim to failed investments. Before you invest, do your research. If a business is new, run a background check on who runs the business or organization. Who are the people behind this? Are they reliable and hardworking? The next step would be to fight for your money. Buying a stock or share in a company gives you the right to speak and appear at meetings and give them an opinion. Tell them what you think. Don’t let them decide for themselves because they are still using your money and your money is important to them.

I hope you have learned something about stocks and investing in them.