The Difference Between Gambling And Investing

Posted On March 7, 2018 2:10 pm

The stock market was created so that companies could raise money from investors to fund future growth. They did so via initial public offerings or IPOs. This is when companies actually sell a piece of their company to investors, who are then entitled to a share of their future profits and cash flows. When you buy shares on one of the numerous stock markets around the world you are not providing funding to companies but rather exchanging ownership stakes with other investors. But that doesn’t mean that the stock market doesn’t serve a crucial purpose.

That’s because this secondary market provides the liquidity that makes stocks attractive in the first place. In other words having a place where you can quickly, easily, and cheaply convert money into shares, and vice versa, is incredibly valuable to society. For one thing it allows regular investors like us to convert our variable active income (that we have to work for), into a stream of passive wealth. For dividend stocks this means that we’re literally getting a slice of those corporate profits and free cash flow paid to us on a quarterly, or even sometimes monthly basis.

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Dividend Sensei
Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I currently write for both Seeking Alpha, Simply Safe Dividends, and DividendSensei.com My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams, and enrich their lives. With 22 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and income streams. I'm currently on an epic quest to build a broadly diversified, high-quality, high-yield dividend growth portfolio that: 1. Pays a 5% yield 2. Offers 7% annual dividend growth 3. Pays dividends AT LEAST on a weekly, but preferably, daily basis