What is Investing?
We've all heard about it but what does it mean?
Investing means using your money to buy something (like shares in a company) with the goal of making more money over time.
Instead of leaving your money in a piggy bank or savings account, you put it into things that have the potential to grow in value. These are called Assets (don’t worry we will go over Assets in Module 2)
Think of it as planting a seed and watching a tree grow over time. Here are some ways in which investing can grow your money
📈 Stock Price Increases
When you buy a stock, you own a small piece of a company. If the company does well—like increasing sales or creating popular products—its value goes up. As a result, the price of its stock rises, and you can sell it later for more than you paid. Watch our videos on Share Price Charts to learn more
Example:
- You buy a share for £10.
- A year later, the company grows, and the share is worth £15.
- You’ve made a £5 profit!
💵Dividends
Some companies share their profits with shareholders by paying dividends. This means you can earn regular payments just by owning their stock, even if the stock price doesn’t change much.
Example:
- You own 100 shares of a company that pays £2 per share in dividends.
- You receive £200 just for holding the stock!