Hello Zoomers,
You may be wondering, “What the heck happened to my 2000 dollar Tesla stock today!?!?” Well, fear not, because no, it did not drop 1500 dollars. Both Apple and Tesla split their stock price today. That means that the value of their total shares did not change, but it’s distributed over more shares. A good example from an article I read was that if you cut a 4 slice pizza into 16 slices, it’s still the same pizza. One of the main reasons companies do this is so that average investors like your middle class household can afford to invest in your company. Dad isn’t going to put 2000 dollars into one Tesla stock, but if he buys two Tesla stocks for 500 each, then it’s much more affordable. Another reason is that the stocks become easier to track. Watching Amazon rise from 3000 to 3450 is mindless for people. But watching Apple go from 100 to 125 and all of a sudden its very apparent to everyone who can do basic math that their share price rose 25%. In other, possible more practical, advice, let’s talk about how to get rich. The first way, and default way, is to get rich through income. The highest salaries in this country go to the doctors, lawyers, engineers, bankers, and politicians. These people go through school, get out, and immediately they are making 1-3 hundred thousand dollars a year. For these people, going to college is 100% worth it, even if they graduate with 100k in student loans. Apparently, the rule of thumb is to graduate with a debt less than your starting salary. Yet, there’s another way to get rich that a lot more people use. You guess it, it’s investing. For evidence, look no further than our market watch game where people have doubled, tripled, quadrupled their money within a few months. When you look at the “risks” associated with the stock market, people tend to look at the companies that lose value or go bankrupt during times like these. Sure, sometimes the market has a bad day or bad month, but a look at history tells us that the stock market has NEVER FAILED TO RECOVER. A 10% annual return on a few dollars invested a day will make you rich. Stocks will make you rich. For your sake, remember this when you get your first job. Good luck, Joshua So
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Where we update others about current events and how they may affect the economy and market.
Authors| Joshua So | Archives
October 2020
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