Making Money in the Stock Market

Have you ever thought that you just aren't getting anywhere in your 9-5 job? You wouldn't be the first one! So you ask yourself; "How can I make that extra couple of grand for that nice car, or for that relaxing holiday?" Today your in luck-I have your answer. Invest in the stock market. I'll be going in-depth into the system that makes ordinary people like you, rich. And unlike other stock advice websites, you'll get top notch information for free!

There is no hiding the truth, after the recent Global Financial Crisis, the Global Stock Market was not a pretty place. That is if you had previously purchased shares in a company.Hopefully you weren't one of the misfortunate people that lost their well invested money into the system. If thats the case, now is your chance to pounce on the recovering companies. If that doesn't make a hell-of-a-lot of sense to you, don't fret, ill be going into how the system works later.

You will hear about the stock market on a daily basis.

So how does this magical system work? Let me tell you.

Determining Value

Let's say that you decide that you want to start a business and open up a Pizza Delivery business. You go and have already got the cash to spend so you don't need a loan. You go out and purchase a shop, equipment and staff for the business.

Let's say that:

 - You spend $200,000 for the purchase of a shop and equipment.

 - In the first year of business, you spend $150,000 on stock, and the payroll of employees.

 - At the end of the year you work out that you turned over $400,000.

Since you have made $400,000 and paid out the $350,000 for expenses, your net profit is:

$400,000 (income) - $350,000 (expense) = $50,000 (profit)

In the second year, you turn over $325,000 and your expenses are $300,000 for a net profit of $75,000. At this point, you decide that you want to sell the business.

You could say that the business is worth $500,000, because that is what the shop and the contents is worth.This is an estimate; the clientele would be added value and the equipment would go down in value as it is used. Let's just say that things balance out to $500,000. This is the asset value, or book value, of the business -- the value of all of the business's assets if you sold them outright today.

Selling Shares

After having your business listed in the local Real Estate for over a month, you realise that nobody in the area has the $1.5 million to spend on the business. In this case, you could dell equal shares in the business. Say you want to sell equal ownership to 10 people. Each share is worth $150,000 for 10% share in the $1,500,000 business.

What does this mean?

Purely and simply; that is essentially what the stock market is. You pay a company a certain amount of money, which they will put into what they like (eg. New tools, computers, marketing campaigns), in exchange for part ownership of that particular company. Therefore, in most cases you are entitled to a dividend of the companies profits. ~Let's say that there are 500 shares in 'Paul's Pizza Delivery'. The company profits $500,000 that year. each share in the company will be entitled to $1,000~

How does this make you money?

After 10 years, 'Paul's Pizza Delivery' will expand and become a global organisation. Your .2% in the company will no longer be worth the $150,000 that you paid for it, it will now be worth $1,000,000. So, as the company grows, demand for the 500 shares will be much more valuale to potential investors. Sell at the right time and you will become rich.

Back to the point?

If you can't still remember, I was telling you how to make money. Not how the stock market works! Now, if you haven't quessed already: The stock market is down. Shares in big companies are cheap.Buy the shares cheap. Sell the shares when the company gets back up and running.

**Be sure to check out stock broking services. They will do all the dirty work for you. They spend your money on what they think will work. Then you get the inflated investment.**