- Owning stock means owning a piece of a company.
- Invested funds are working for you 24/7.
- Invested money can grow much faster than cash in a savings account.
Ever wanted to own part of a great business? That’s exactly what happens when you purchase stock. You’re buying a part of that company. As a part owner, you’re entitled to a share of the profits and assets of that business.
You profit from owning stock in one of two ways.
- The company can decide to return money to their shareholders via dividends. This is cash that is paid to you on a regular basis for being a shareholder.
- The business grows and the price per share increases. Once you decide to sell your shares, you pocket the returns.
While money kept in a savings account gets eaten away by inflation, invested money is working for you 24/7. Unlike a bank account, your original outlay can multiply many times over if you invest in the right companies.
On average, the stock market has returned around 10% annually since 1974 (without factoring in inflation). That easily beats the 0.5% you’ll get by keeping your money in a savings account.
Thank you for reading and hope you learned something new.
In case you want to learn more things about investment check more articles from our Investment Academy.