Ok, Career Goddess.
I know you have questions. I’m about to release answers that will upgrade your Stock Market smarts.
Ready? Let’s go!
What is the stock market?
It’s a grocery store. Seriously. Hear me out.
When you walk into Whole Foods, Trader Joe’s, Jewel, Kroger, Hy-Vee, Safeway, or wherever you go for your food needs, you buy things that you think you’ll like – either from experience, recommendation, or research. Oh, how I love my apple cider vinegar! It’s an excellent facial toner and fat burner. I’ve done my research so I know how I can benefit and grow by investing my money in this product.
There’s an entire store of products to choose from. You get to buy while the vendors at the store get to sell. It’s a one-stop shop where sellers and buyers can come together to get what they want.
And the stock market is too! Instead of exchanging grocery items, the stock market is a place where stocks and bonds can be bought and sold (traded).
What is a stock?
Stock is a piece of ownership in a company. Since you have ownership in the company, you can claim some of the company’s assets and earnings. So if the company is really successful one year, the value of your stock will grow. This means more money for you!
Do I have to drive my car to the stock market to buy and sell stocks?
You have to go to a stock exchange to buy and sell stocks. But you don’t need your car to get there (you can save your gas money!).
There are stock exchanges that contain a network of computers that allow you to trade electronically.
Some major stock exchanges include:
- New York Stock Exchange
- London Stock Exchange
You can go to Yahoo Finance. Put in the ticker symbol for a company and all the company information will come up. You’ll even see which stock exchange the stock can be traded on.
How do I get access to the stock exchange?
You have to open a brokerage account! Just like you open a savings account to save money, you have to open a brokerage account to trade stock.
Need more details on how this process works? Join me at the next “How to Invest in the Stock Market (with less than $100!)” webinar.
How the heck do I make money in the stock market?
Here is one way: you can make money when you buy shares of stock and the price per share goes us!
Here’s how it works.
Let’s say I buy Apple stock.
In order to buy the stock, I must be aware of the purchase price. There are many ways to get the price, but for now, I’m going to use Yahoo Finance.
Note: the price of stock changes every second!
As of October 4th, the stock price for Apple is $154.48. If you don’t have much money to invest with, that price is pretty steep. So I’ll do another example (on the webinar) using a stock that has a lower pricce. For our example, we are going to round the stock price to $150.00 per share. Good?
You can buy as many shares as you want. So, I’ll buy 10 shares of Apple stock. How much will it cost me?
Let’s do the math: $150 X 10 = $1500. So I bought 10 shares of stock for $1500.
Let’s say some big event happens on March 30 that causes the price of Apple stock to go up to $200.00 per share.
If the price of the stock goes up, your money goes up to!
Let’s do the math: $200 (new stock price) X 10 (you bought 10 shares of stock in October)= $2000. The value of your stock is worth $2000.
How much money did you make?
$2000 (market price for 10 shares) – $1500 (how much you bought the stock for) = $500.
You just made $500 from your investment!
Note: Before you sell stock, just make sure you understand the tax implications. You do have to record short-term capital gains if you sell your stock in less than a year. But that’s a topic for another day.
Now, do you know how you can make money in the stock market?
Still have questions? Join the next “How to Invest in the Stock Market (with less than $100!)” webinar!