Warren Buffet is a different case. He sold insurance (for decades!), and had to put the premiums somewhere. Eventually he had so much money he could influence the market. {He must have also guessed well, and paid out less than expected in claims. [theses odds are computed by actuaries.]
When you own enough of one stock (usually 5%) you get a paid position on the board of directors - and so make money that way (and get insider trader information - but no one will admit that). Then you get invited to be on other board-of directors and make more money.
"The rich get richer, and the poor get poorer."
The people that become billionaires srtared their own companies that gree large enough, fast enough than when they were ready to put the company on the public stock market, they kept millions of shares to themselves that have basically zero cost and when the public starts buying the stock, the value per share is established. Going into the future, some companies have stock splits so a stock at $100 a share that the founder owns 100million shares in, becomes 200 million shares @ $50 a stock and could go back up to $100 agin - some companies have split their stock several times. Apple traded under $10 a share before Steve Jobs came back and wen up to $700/share before their recent 7-for-1 stock split
Stocks pay two ways. Stock price appreciation and yield. You can manipulate options to increase the yield. If you do research you can locate stocks that will appreciate in price somewhat better than the market. If you study by reading a book or two or a whole lot of them. You will slowly grasp the various terms about economics. Daily go to the library and read the Investor's Business Daily, the Wall Street Journal and weekly Barrons. It takes time and effort... problem is, too many people don't want to put in the time to learn the terms and figure out the various indicators that make a good stock. Consider PEG ratios and Earnings growth.
When you buy shares of stock, you are then one of the owners of a company.
As a company earns money, it becomes more valuable and this value is reflected in the price of its shares on the open market. You can collect this increase in value when you sell your shares for more than you paid for them.
The company’s board of directors makes the major company decisions and decides what to do with its net earnings.
?Some or all of the earnings may be given directly to the shareholders and this is called a dividend. They just mail you a check or send the money to your brokerage account. This makes the price of the stock decrease by the same amount as the dividend, so you have the same value in the total of stock and dividends.
?Some or all of the earnings may be re-invested in the company so it can grow, open new stores or make repairs. When this is done, the earnings money is used up but the company is more valuable by that same amount.
The per share price, having increased because of the earnings, retain that increase when the earnings are re-invested in the company.
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There are several ways people make money in the stock market. the first I they buy a stock and hold on to it for a long period of time and hope the stock price goes up. They actually make money then when they sell that stock. The second way they make money is they buy a stock the provides dividends quarterly. Dividends are generally small cash payouts from the company for each share of stock that you own. A third way to make money is to be what is called a day trader. Here you buy and sell shares of stock on a daily basis (trading many times a day) and you hope to make money on the small changes in prices.
Buy low Sell high Earn a dividend in between.
Get real. People rarely "become billionaires" from investing in stocks.
se..?high
I see people have become billionaires investing in stocks but how do they get the money? If they put the money into a stock aren't they supposed to sit and let it grow? If they want their money does that mean they have to sell the stock? I'm very confused as to how this works. Please explain in detail
