Query by John H: How can you make funds by investing in stocks?
I do not actually comprehend how stocks function and I was just questioning if you can get cash investing. Just the fundamentals of how significantly income you invest and how much you get back.
Answer by rah1420
If you buy 100 shares of stock at $ 1/share (investing $ 100, plus brokers charges) and the stock goes to $ two/share, you can sell all 100 shares for $ two a share and make…. close to $ 100.
You spent probably $ 105 or so to buy it ($ five commission)
You spent an additional $ five to sell it (so your total amount out of pocket was $ 110)
but you received $ 200 from the sale, so you created $ 90 on it.
If you hold it, the organization could problem dividends – which signifies they pay every single shareholder a small bit per share. If you get a $ .ten/share dividend, you’d make an extra $ 10 on the stock. (Note that these are all created up numbers.)
It also doesn’t speak to any taxes you’ll owe. Things can get difficult around tax time if you sold stock in that year – it took me about 15 hours to do my 1040 this year, and 10 of that was just dealing with my stock sales.
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