Investment Academy #1 – Why Buy Stocks?

  • 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.

  1. 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.
  2. 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.

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