When do I start getting money from stocks?

kevin t: When do I start getting money from stocks?
I want to learn about how stocks work in general. Where do I go to buy stocks? Where do I go to get the money I earn? Where do I deposit the money? When can I withdraw or get money from my stocks? Any other useful info and experience you’ve had. How risky are stocks? Do most people gain money or lose money?

Answers and Views:

Answer by Triangular Man
You open a brokerage account. You deposit money into it. You use that money to purchase shares of a stock. When that stock rises in price enough, you can sell it for profit. Your broker website should have explanations of each type of trade (stop, limit, etc.).

Answer by Liam..
If you are asking this question on here, you are heading to lose money. Find yourself a share broker who can explain it all to you. It take a lot of time and research to make money from stocks. There is an old question that goes: “How do you make a small fortune from stock trading?” Answer: “Start with a large fortune!”

Answer by lakegal
Make sure you do lots of study/research before you get involved. Can you join a local group who invests and get some local knowledge.

Answer by chicago_bears5430
Where you go to buy stocks: By opening an account on e-trade, scottrade, charles schwab, zecco, or any of the other discount brokerages.
Where you go to get the money you earn: Any profits you make by selling stocks will be deposited in your brokerage account, which you can then transfer to your bank account or wherever…
where you deposit the money: In your online brokerage account.
When can you withdraw or get money from your stocks: you can withdraw money from your brokerage account at any time.
How risky are stocks: They are riskier than bonds and treasury bills, but not that risky.
Most people gain money from stocks in the long run.

Answer by rowlfe
First thing to understand is the stock market is a zero sum game. For each dollar removed as a gain, someone else lost a dollar. Stock represents ownership in a company, ti use simple but slightly inaccurate terms. If there are 100 shares and you buy 10, in effect you are a 10% owner. You make a profit when you sell and the stock price has risen. You lose if the price of the stock drops. You may get dividends which represent “profit sharing”. Stock is literally gambling, exact like betting on a horse on the track. At the track you put $ 2 on a horse and after once around the track, you win or you lose. You were betting on the skill and talent of the horse and jockey as a unit. In the corporate world, you are buying stock which means you are betting on the skill of the management and the value of the product to sell enough to make a profit. Making a profit increases the stock price. And it can sometimes take YEARS to determine if you were a winner or a loser overall. The more you wager, the greater the potential return. The higher the risk, the greater the potential return, but also the increased risk mean the company is that more likely to fold and you lose all of your money, the same as if the horse you bet on comes in last place. Only licensed stock brokers can work the stock market. For YOU to be involved, you hire a broker to act as your agent. You open an account with the broker. The account can hold more than money, it can hold shares of stock as well. You then buy and sell, and pay a commission to the broker who acts as your agent in the market. Remember, the broker is a salesman and is driven by money. The more trades YOU make using your agent, the more money HE makes whether you win or lose overall. The salesman has a vested interest in the amount of trades you make, good OR bad makes NO difference to HIM. He is NOT on your side to make you money, but to get you to buy or sell anything as often as he can. The agent/broker takes a cut of the deal when you buy. The agent/broker takes a cut of the deal when you sell. Some brokers charge a fixed fee of X dollars per trade to buy or sell any amount of stock. Other brokers take a percentage of the value of the deal to buy or sell. I prefer the fixed dollar per trade broker myself, but it IS a personal preference for YOU. Take a class. Many community colleges and adult education places offer classes on the market and investments, mostly are given also for FREE. Check at a YMCA if there is one near you. Visit a brokerage house and ask questions. There is no excuse for not doing your homework. Research is the key. You would NOT simply walk down a street, turn into the first used car lot and bought the first car you bumped in to, so why not apply the same type of research to selecting a broker? Interview the brokers just as if you were hiring an employee, because that is exactly what you are DOING, HIRING an agent. You need to know you are hiring a qualified agent, a knowledgeable agent, an agent who really does want for you to make money as well as he does by making the trades for you. By the way, if you are not 18 or an emancipated minor, you must use a parent or a guardian to open a brokerage account in trust for you. IRS is really sticky on this and they do NOT take prisoners. IRS demands their cut of any profits as capital gains and they WILL hound you for even so much as one thin dime as profit that are classed as capital gains. IRS is ruthless and will spend thousands to get that dime of profit taxed. Every penny of profit is taxable income. The broker is required by LAW to tell IRS everything you do when it comes to receiving any money from dividends or from sale of stock. It then is incumbent on YOU to file a tax return and declare gains or losses. The burden of proof falls to YOU to defend yourself from IRS taking a cut. IRS shoots first and does not even ask any questions unless forced by YOU when you fight them in court.

Answer by Cristina Jacobs
The best place to go to buy stocks is a cheap online brokerage such as Tradeking.

You earn money either by selling stocks that have increased in value since you bought them, or through dividends (when the company pays you a certain amount of money depending on the kind and amount of shares you own). You then withdraw these profits just like you do from the bank.

You deposit the money into your account with your broker in almost exactly the same way you do with a regular bank.

You can generally withdraw money or sell stocks at any time, provided someone is there who will buy the stocks from you.

Stocks can be very risky if you don’t know what you’re doing. The best thing to do is do a lot of research. A good place to start if the Motley Fool’s Mechanical Investing Board.

Most people who invest in an index fund and wait patiently will gain money. People who buy and sell stocks too frequently tend to lose money.

I also have to disagree with the previous poster on two counts. First of all, stock investing is not necessarily a zero sum game. It is more than possible for one person to sell a stock to somebody at a profit and then for the new buyer to eventually make a profit on the stock. There are also situations in which it makes some sense to sell a stock at a loss, tax write-offs being the most common example.

Secondly, investing is not the same as gambling. Buying shares of Wal-Mart or Coca-Cola is practically risk free; do you honestly think anything will happen to either of those companies? They will continue to grow and increase their profits because there’s nobody out there that can unseat them. People get into trouble though when they think all companies are like that.

Answer by dex
They are right you start by opening a Brokerage account. The most popular choice for beginning investors is to go with an online account at a discount brokerage such as Scottrade.com (that’s what I use) or etrade, etc. etrade is $ 10 trades which is very expensive (in my opinion) compared to Scottrade at $ 7. I haven’t really found any other reliable brokerages that are cheaper than Scottrade. I chose Scottrade bc it is the cheapest and does exactly what I need it to do. I don’t need help from brokers on what stocks to buy or when to buy, I just need a method of purchasing/selling stocks. Some might feel at home with other brokerages that provide more support or help from brokers though. (they will also pay more). You can deposit to Scottrade over the internet, you can use a service called “MoneyDirect” which just allows you to make electronic deposits from your bank account. After you have the money deposited onto your Scottrade acct u have funds available to buy stocks. If you buy a stock it is up to you when to sell it. You can sell it after a year or hold it for 30 years if you want to. But remember that, until you sell the stock, your money is at risk. As soon as you sell the stock, you get the money for it back to your Scottrade acct. The company could go out of business the next day but you would still have the money since you sold just in time. You can request a check to be sent to you from Scottrade when you want to withdraw money from your acct. This can take a few days but it’s usually about 1-2 days. My inclination is to say that it’s logical to assume that most people actually do make money from the stock market. If someone is consistently losing all of their money in the stock market, it seems like they would eventually stop trading on it, and most traders left over will be those who are making profit. Those who lose money are the ones who are dreaming of being “instant millionaires” by trading on the stock market. It takes a lot of work and research to play the market. You should not aspire to be an instant millionaire, and you should attempt to limit risk by choosing companies you know for sure are going to be successful. Never invest in a company you do not understand, never invest in one because someone tells you it’s bound to become “huge”, at least not until you have studied it yourself and determined that it is truly a good company. My post implies this, but I’ll go out and say it anyway: Do not invest in penny stocks. You need to look for solid companies that are worth more than they are selling for. And don’t risk money on companies you are not sure about.

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