Lux Investing

How do you invest in stocks (Literally) and how does it make you money?

How does anyone invest and how does it make you money? Since you own part of the company does the money come in like a pay check or... I don't know!!! Please tell me how.

Public Comments

1. Open a brokerage account at Zecco. It depends on the company. If you have shares of Coca-Cola then you sell water. If you have shares of Ford then you sell cars. Yes, the money is like a paycheck. Except you only get one each quarter or every year. They are called dividends. Unlike a job you cannot be fired from your own company. Once you buy a share in that company then you will get your dividends until you die or until the company closes. In fact, after you are dead you can pass those shares to your children and they will get the same checks until they are dead. As you can imagine some wealthy families have been doing exactly that for centuries.
2. Investing can be done through any broker. Scottrade, Etrade and TD Ameritrade are good choices. Stocks have two forms of return, dividends and capital gains. Dividends are paid to you each quarter by the company. This is just receiving a check from the company. Capital gains are the difference in the price of the stock when you sell it from when you bought it. Dividends are great, but the real value of investing comes in capital gains and in order to realize this value you must eventually sell the shares.