How Does the Stock Market Affect Our Lives?

The stock market is a place where people can participate in our economy as an owner of a business. People can do this by buying shares of stock in that business. A share of stock is a certificate of ownership in a company. The price of a share of stock is one way to measure the value of a business. If the value of a business goes up then the stock price goes up. If the value of a business goes down then the stock price goes down. If the stock market is doing well, then you can earn money. If the stock market is not doing well, then you can lose money.

The stock market is a good place to invest for the future. Some people make money in the stock market and leave it as an inheritance for their children, grandchildren or great grandchildren. If you make enough money you can retire at an early age and live off that money. You can travel all over the world with money you made in the stock market. Some people invest in the stock market to earn money for their child’s college fund. Others use the money made from the stock market to buy houses and cars.

People can even work at the stock market. If you buy and sell stocks at the stock market you are called a stock broker. A stock broker needs people to buy stocks so they can get their payment, which is called a commission. A stock broker needs to be a good sales person to make a good living. 

If you do end up buying shares of stock then you need to be aware of some of the risks in the stock market. When a company is not doing well and not many people invest in that company, then most likely the value of that company will start going down and you will soon lose money. A company may even have to close. Just think if you where one of the people that loses their job because the company closed. If they lose their job how will they be able to pay for a house, car, clothes or food? And, the people who sell houses, cars clothes and food will also not make as much money. Eventually you won’t be able to do some of the fun things you enjoy doing, like going out to eat ice cream. If a large company closes, then it could cause smaller companies to close as well. Therefore, if you invest in a company that is doing bad and you were counting on that money for the future, then you may have to work hard to make up the money.

Investing means to put your money into something that will make more money, known as income. 

Some things that might help you to make more money are:

1. stocks
2. savings bonds
3. savings accounts
4. collectibles-such as stamps and old tin lunch boxes, Beanie Babies.
5. realestate

Stocks

A stock is a part of a company which you buy into, you can watch and see how well stock does in the paper or on a nightly business report.

Savings Bonds

A savings bond is issued by the government, they can be purchased at a low price, and these gain value if you keep them for a long time.

Savings Accounts

A savings account is also called a time deposit; if you put money in a savings account you will earn interest over time.

Collectibles

A collectible is something that is usually varied and creates a value over time, or it becomes more valuable when something new comes along and they don't make it anymore.