01 - Stock Basics: Introduction

 Wouldn't you love to own part of a business without ever having to show up at work? Imagine if you could sit back, watch your company grow, and collect the dividend checks as the money rolled in! This situation might sound like a pipe dream, but it's closer to reality than you might think.

As you've probably guessed, what we're talking about is owning stocks. These fabulous financial instruments are without a doubt one of the greatest tools ever invented for building wealth. Stocks are a part, if not the cornerstone, of nearly any investment portfolio. In starting on your road to financial freedom an understanding of stocks and how they trade on the stock market is absolutely essential.

Over the last few decades the average person's interest in the stock market has grown exponentially. What was once a toy for the rich has now turned into the vehicle of choice for growing wealth. This demand coupled with advances in trading technology has opened up the markets to the point that nowadays nearly anybody can own stocks.

However, despite their popularity most people still don't fully understand stocks. Much is learned from conversations around the water cooler from others who also don't know what they're talking about. Chances are you've already heard something like: "Bob's cousin made a killing in XYZ company, now he's got another hot tip...", or "watch out with stocks, you can lose your shirt in a matter of days!" So much of this misinformation is based on a get-rich-quick mentality. This was especially prevalent during the amazing dot-com market in the late 90s. People thought that stocks were the magic answer to instant wealth with no risk. As we witnessed with the ensuing dot-com crash, this is not the case. Stocks can (and do) create massive amounts of wealth, but they aren't without risks. The only solution to this is education. The key to protecting yourself with stocks is understanding exactly what you are investing in.

It is for this reason that we've created this tutorial - to provide the foundation you need to make investment decisions yourself. We'll start by explaining what a stock is, go over the different types of stock, talk about how they are traded, what causes prices to change, how you buy stocks, and much more.