STOCK
A stock is a type of investment that gives individual ownership with a company. People by stocks from companies they believe will go up in value over time. For example, instead of buying the new $150 pair of Jordan sneakers each month you could purchase a stock with Nike and benefit financially as a shareholder of the company. When you buy stock with a company you are called a shareholder because you share in the profits the company gains
Company Benefits from you buying stocks by having more money to reinvest back into the business to help it grow
You benefit by growing and diversifying your source of finances creating another stream of income.
Bond
A bond is a debt investment where you are lending entity money over a set period of time with the promise of repayment plus interest. Entities you can invest in are companies, municipalities, states or the government. The money is not returned to you until it reaches its maturity date. A maturity date is the set period of time the debt investment is set to grow at a fixed interest rate. Bonds are considered to be a safer investment given its lower risk of loss compared to investing in a stock. On the flip side, bonds tend to have a lower interest rate than stocks.
That’s all I got for now! My brain hurt just a little trying to break that down. There is so much more to learn in the language of finance. It may seem intimidating at first but pace yourself and learn the ones that are most relevant for your financial journey. I will continue to share as I grow in my understanding. Comment below if a money term glossary tool would be helpful. I’m trying to think of some free resources to create for you guys and gals.
Until next time dream, believe and achieve.
