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Showing posts from April, 2021

Stocks: How to Pay Someone Else to Work for You

 When you work for a company, you work to build someone else’s wealth.  When you own a company, other people work to build your wealth. Fortunately, you don’t have to be Bill Gates or Elon Musk to own a profitable company.   Instead, as we touched on briefly in the article on assets vs. liabilities , you can buy stock in the company.   Buying a share of stock mean you actually own a small piece of a company. One of the most efficient ways to own stocks is by purchasing low-cost index funds.   These funds can either be in the form of mutual funds or Exchange Traded Funds (ETFs).   The key difference to a traditional actively managed fund is that the index fund simply tracks the relevant market.   For example, an S&P 500 index fund would hold shares of the largest 500 U.S. companies In the S&P 500’s case, the largest 500 with some consistent caveats: at least 10% must be publicly available for trade