Monday, 6 May 2019

How The Stock Market Investing Actually Works

How The Stock Market Investing Actually Works

When the majority of people go shopping they become broker because when you go out and spend $200 on the newest Nike Gear, your $200 disappears and if you try to sell your Nike Gear, later on, you're not going to get anywhere close to the $200 you spend to buy that gear. In other words, you just lost money

Now, what if I told you there was a way you could get paid to go shopping and this is one of the ways wealthy people love to spend their money

When you invest in the stock market, you are using your money to buy companies instead of buying the products that these companies sell.
That way when these companies make money so do you.

Consider this when the majority of people go shopping they buy things called consumer expenses, going back to our Nike Gear example.

But the things about consumer expenses is that as soon as you buy them your money's gone, Nike isn't going to pay you to wear their shoes, well, unless you're LeBron but for most of us we're paying Nike

That's why it's called a consumer expense these are things that you're buying and they lose value but they don't pay you

Now here at, we take a different approach to shopping, instead of buying things that lose value we buy things that pay us, we called these things investment seeds

  • With investment seeds, you're using your money as a tool that's going to work for you instead of just spending your money on consumer expenses that just eat away your cash
  • So instead of having the consumer mindset of just buying Nike Gear you want to have the investor mindset where you're going to profit when other people buy that Nike Gear

When you are buying a company stock what you're doing is purchasing a small piece of that company called a share, buying that share makes you an owner in the company, so if you buy one share of Nike you just became an owner of Nike 

Being an owner that entitles you to a portion Nikes profit, when they make money you do too, and yeah knowing this information is going to skew how you watch sports a little bit because whether you love or hate LeBron you're going to want him to win because when he wins your Nike lays pocket win too

A stock market is just a place where investors go to buy and sell shares and big companies just like Nike

But How do you actually make that money well that money comes in two ways Through 

  1. Appreciation
  2. Dividends

Appreciation is just when the value of the share you bought goes up, going back to our Nike example which hopefully you're not sick of this Nike example but then again how could you be because no one gets sick of Nike I mean that's what makes it such a great company

Let say you buy Nike at $100 a share and Nike starts doing really well because LeBron keeps winning so more investors come to the market and they start trying to buy those same shares, well, what's going to happen to your shares, they're going to keep rising in value, they're going to get more and more expensive.


The second way you can make money in the stock market is through dividends, Dividend is just money that a company will pay you to be invested in their stock which is pretty awesome because it almost is like you're LeBron being sponsored to invest in Nike

They're going to pay you dividends 4 times a year because you are technically an owner of the company, you have the shares, you get paid, that's how dividends work

Now to be really successful in the stock market the first thing you got to do is to shift from the consumer mindset which the majority of people have, to the investor mindset which the minority of people have

Like I said before a consumer, someone who just buys products the money they spend just goes into the pockets of the businesses 
But an investor is someone who buys investment seeds they make their money work for them by investing in those businesses

I mean really, which side would you rather be on 

The one paying these companies or the one getting paid by these companies
Now a lot of people think you need a ton of money to start investing in a stock market, but that's not true, you can start investing with as little as $100. But are you going to become a millionaire investing a $100 over 2 month? No.

Of course not, but everyone has to start somewhere and the sooner you start the sooner you're going to get the results you're looking for. 

That's how stock market work, hopefully, you learn something from this article

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