Before you dive into this guide, two important things to note:
Today, lots of people want to work less and earn more. Who doesn't?? We've been encouraged to have multiple streams of income. Stocks is one of the many streams of income. More than just a stream it is a popular one. This is a beginner's guide to stocks.
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Stocks are equity in a company or business. Simply put, it's part ownership of a business or a company. So what's the big deal about equity? Let Silicon Valley's superstar founder-investor-philosopher Naval Ravikant speak on that:
Without further ado, let's dive right in.
A stock (also known as equity) is a security that represents the ownership of a fraction of a corporation. This entitles the owner of the stock (shareholder) to a proportion of the corporation's assets and profits equal to how much stock they own.
A simplified explanation would be a pizza, when you and nine of your friends contribute equally to buy a pizza. The pizza arrives, so everyone has a piece of the pizza — say the pizza has 10 parts. That is the same way stocks of a company are viewed.
Five Basics You Should Definitely Know About The Stock Market