Investing in the stock market
When investing in stocks, you're essentially buying a piece, or "share," of a company. This allows you to participate in the company's success (or failure) as the price of the stock, which reflects the company's value, rises or falls.
Let's imagine you're interested in technology and believe that a particular tech company, let's say Apple, is doing some exciting things that will increase its value in the future. So, you decide to buy Apple's stock.
You would need to set up a brokerage account, which is like a bank account but is designed for buying and investing in securities like stocks. Through this brokerage account, you can purchase shares in Apple. The cost of the shares would depend on Apple's current stock price. For example, if Apple's stock price is $150 and you want to buy 10 shares, you would need $1,500.
Once you own the shares, they might increase in value if Apple does well. For example, if the stock price goes up to $200 per share, your 10 shares would now be worth $2,000 — an increase of $500 from what you initially paid.
If Apple pays dividends, you'll receive a small amount of money for each share you own. Dividends are a portion of the company's profits distributed to shareholders, and they can provide a steady stream of income in addition to any money you make from selling the stock for more than you bought it.
Keep in mind that stocks can also decrease in value. If Apple were to have a rough year and its stock price drops to $100 per share, your 10 shares would now be worth $1,000 — a decrease of $500 from your initial investment.
Investing in stocks involves a degree of risk, but with careful research and thoughtful decision-making, it can be a fruitful way to grow your wealth.