So you've been watching the news and seeing all these social media posts about
the stock market and how it's been plummeting, and now is the time to Buy.
But before you just jump in and buy,
let me give you this quick example and then you tell me if it's a smart move.
What if I just woke up tomorrow morning and decided I wanted to become a pilot?
So went to LAX, went through the gate, jumped on the airplane,
and then tried to fly. How do you think I would do?
Would you ride on that plane if you knew this in the first place?
Would I be wrong if I tried to fly the plane, it didn't work.
So I came back and started complaining about how this is a scam and only the
affluent can do this. Look,
I've been trading stocks over 10 years now in the same goes for the stock
market.
Please do not just jump in because you heard some influencer that has never
traded stocks and makes all their money from selling courses says to buy now,
but before you buy into the stock market,
buy my $25,000 course and I'll show you how to make a million dollars tomorrow.
Look, I know you're laughing, but it's true. It's all over the internet.
In this video,
I've started a new series called investing one-on-one where I will create short
videos that will walk you through the entire stock buying process from what a
stock is, how to analyze stocks, how to buy them, where to buy them from,
and how to minimize your risk on each trade so that you won't become the next
meme online about how a guy lost $20,000 trading stocks. Look,
if this interests you, then stay tuned.
What's going on fam?
Justin Houser here and welcome to the Justin Houser show.
Where I go over vital information in only 5 minutes on how to make you
financially smarter and rich.
Make sure you check the description below for show notes and links to all
recommended products. And most importantly, if you get value in this video,
then let's help the YouTube algorithm and SMASH THAT LIKE BUTTON and SUBSCRIBE
to my channel so you will not miss any of my future videos.
So let's get right into,
"What are stocks and what is the stock market exchange?" Stocks are simply a
type of investment where you purchase a portion of a company that's referred to
as a share. Let's look at an example.
Let's say that Apple has a hundred outstanding and issued shares price at a
$100. This means that the value of Apple is currently at $10,000,
you decide you want to buy one share of Apple, so now you own 1% of the company.
Fast forward, 5 years later, Apple decides to sell for a $100,000.
Your initial share of a $100 is now worth a $1,000 that you can either cash out
or you can move to the new company and just continue to grow it.
So why would companies want to give up a percentage of their business?
The main reason is usually to raise capital.
Maybe they need to buy a competing company.
Maybe they need it for debt repayment,
or maybe they just need to increase sales by hiring more personnel.
You have to remember the goal of any company is to increase sales while
minimizing risk.
Let's take a look at another example to better understand why a company might
need shareholders. Let's say that you decide to open up a bakery.
Just for easy math, let's say that it's going to cost $100,000 to open up shop.
This includes the machinery, hiring a personnel, rent, etc. However,
you only have $10,000. So you need to raise an additional $90,000 in capital.
So you go out and find 9 of your friends that contribute an even $10,000.
Congrats, now you've got the $100,000 to start your business. However,
in the process you gave up a portion of your business.
As now you only own 10% but again, it is up and fully running.
So let's say that you go out and decide to sell your business 10 years for a
$1,000,000.
Your $10,000 you initially contributed is now worth $100,000 now that we know
what a stock is, we now need to understand what the stock market exchange is.
The stock exchange is basically where you can buy or sell shares of a stock.
There are over 60 major stock exchanges throughout the world,
but in this series,
I'm just going to focus on the one I'm most familiar with and that's the United
States stock exchange. In the United States of America,
we have 3 major stock exchanges, the New York Stock Exchange (NYSE),
the NASDAQ and the American Stock Exchange (AMEX).
All 3 of these exchanges are located on one of the most famous and recognizable
streets in the world, wall street,
which is located in downtown Manhattan in New York City.
So why is this even important to know?
Let's say that you want a hundred shares of Google and it's worth $50,000 and
you want to sell it as you have doubled your initial investment.
Without the exchanges, you will not have a place to sell it.
Your $50,000 would be completely useless and would have the same value as this
bucket of sand that I just picked up at the beach.
Think of the stock market like an auction house.
You see a stock that you want so you put in a bid to see if it gets accepted.
The same goes when you want to sell and you give your product or share to the
auctioneer or the broker and then they auction it off hopefully at the price
that you requested.
The only difference being that the stock market allows the users to buy and sell
shares in seconds using computers and not using a microphone on a stage.
Please note that just because you auction your shares at the price that you
want, doesn't mean that it's going to sell at that price. If it doesn't sell,
it simply just stays in your possession and then you can try again.
There are several different types of sell orders that you can put in,
but I will go over that in a future video. So there it is,
my 1st video in my Investing 101 series called,
"What is a stock and what is a stock market exchange?" I hope this video helped
you, and if it did, can you SMASH THAT LIKE BUTTON?
Now it's time for question of the day:
Where are you currently in your stock investing journey?
Please leave your answer below in the comments as I would love to connect with
you. And remember, GOD sees you and HE loves you! See you in the next video,