Why the Gap?The more I got into investing, the more I learned about long term investments, and compounded interest. Then I realize a.) there is money to be made that can be passed down to my children b.) it’s not as hard as I thought it would be and finally c.) a lot of us are not aware of all the information that is out here. So in order for us to do for ourselves I want to start share what I believe is a beginners guide to understanding investing. Now remember there are different roads to the same destination. This is what I have learned and what I have done thus far. Below is a broad overview to get you started.
- Buying stocks is buying into that company, it’s important to buy into one that is already making a profit, or projected to make one.
- Investing in publicly traded stocks, such as Johnson & Johnson, Google and McDonald’s is a great way to raise wealth.
- A stock price is the stock quote. This is what you will pay per share. If IBM has a $4.00 stock price and you have a $ 100 budget you can buy 25 shares. You now have 25 shares of IBM.
$4 (share price) divided by $100 = 25 shares
If IBM stock price increases to $12.00 dollars a share. Your 25 shares have now grown to $300 dollars. Congrats you just made $200 dollars profit.
$12 (share price) x 25 shares = $300 dollars
- Penny stocks are a great way to put your toe in the investment pool. A penny stock is a stock that is priced under $ 5 dollars.
For example, I brought a 300 shares at $.16 cents which came to $48 dollars. If the stock price reaches $35 dollars, I have now made $10,550 dollars. If the stock doesn’t do well, I will at the very most only wasted $48 dollars.
- Bitcoin although not a publicly traded stock as of yet ( meaning not sold on NYSE or NASDAQ) can be purchased and researched on Coinbase, Gemini, and Bittrex,
- Be sure to consider, economic climate, recent profits, and customer base in picking a stock to buy.
- You can research a other traditional stocks, in one of these online platforms, Bloomberg, Yahoo Finance and NASDAQ .
- Once you are ready to buy stock, you can open an account with Etrade , Fidelity and Ally . Buyer beware any time that you buy a stock, in any of these platforms, a service charge will be attached. (For example, fidelity charges 4.95 a transaction.)
- If you purchase a stock, and then decide you no longer want it, you can sell the stock. However, the money returned will be what the stock is worth at the time of Sell not at the price that you purchased it. -I personally set price alerts, for price drops and increases. Text messaging in my opinion works best.
- Be informed, and make smart decisions based on your own financial background. There is no crystal ball. Word to the wise, you should only invest what you are willingly to lose.