Stock Market Terminology

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Have you thought about your future and what your cash might be like? I thought a lot about it too. I found that every person need to Invest their cash for the future. You want to be successfully well off as you get older. I definitely want to be rich with wealth when I get older. A lot of people do not invest their money in the here and now. As a result, they are left with very little cash to work with. Just imagine in the future, that you do not really need to continue to work at your job. The reason why you do not have to work, is because you have been investng for over 10 years. Now your a millionarie for good. This is passive income at its' best. The money works for you now!

Investing does not require you to have a lot of money to get started. You start with money you first put into your stock portfolio. Then you get pay by dividends the company give you. After that, you used the dividends and you reinvest those, which will compound more as the years go on. This is one of the many examples that you will be doing in the market. The stock market as a whole does not have to be this complex mess for beginners. I think the best place to start is with the meaning of terms use in stock market dictionary (language). Once you become familiar with language of the market, then you will have a good time investing. 

So try to come up with a plan to invest your money, so you don't have to struggle as the years go by. Also come up with other ways to develop passive income. Below I will include a list of some terms to help you get started in the stock market. I will also include a good book and others to for you to look into for more information. Most of the terms come from the book "The Dividend Millionaire".

Stock Market Terminology

AS QUOTED FROM "The Dividend Millionaire":

1. Investing - "Putting Aside some of your own money into a investment vehicle designed to help increase the initial amount you put into it."("Putting money into a particular investment type and planning to see a soild return over the long term")
2. Investing for Captial Growth - "Where people buy into a particular investment and hope that their initial deposit grows enough to represent a profit."
3. Trading - "People who buy stocks at a low price and then immediately sell when the stock price rises enough to make them a profit."
4. Dividends - "Payments made to shareholders of a company from the profits made and income earned by that company."
5. Dividends Yields - "Most often allocated as fixed amount per share owned but they aren't always necessarily paid out in cash."
6. Cash Dividend Payment - "The most common form of payment made. It is where shareholders receive a cheque for the amount due to them."
7. Stock (Scrip) Dividends - "Paid out in the form of addtional stocks of that particular corporation."
8. Dividend Reinvestment option (DRIP) - "The issuing corporation may allow shareholders to use their dividend earnings to buy stocks to an equal value."
9. Property Dividends - "They are paid out by a corporation in the form of assets."
10. Ex-Dividend - "If you buy stocks that have been declared ex-dividend, they do not have the right to be paid the most recent dividend declared."
11. Cum Dividend - "Any stock bought or sold 'cum dividend' has the right attached to it to be paid the most recently declared payment
12. Declaration Date - "The date on which a corporation's Board of Directors will announce their intention to pay stockholders a dividend."
13. Dividend Yield Formula - "Take the dividend amount per share offered and divide it by the price you intend to pay." (Dividend Yield = Dividend divided by price)
14. Payout Ratio Formula - "The Amount of earnings paid out in diviends to shareholders from the issuing company." (Payout ratio = dividends paid out per share dividend by earnings per share)
15. Low Ratio - "Indicates a secure dividend because smaller dividends are easier for that company to pay out than larger dividend payments."
16. Dollar Cost Averaging - "All about investing the same amount of money regulary over a period of time into growing your portfolio." (Average Price Per Share = total cost of buying shares divided by numbers of shares)
17. Stop-Loss Order - "An automatic order that is triggered whenever a stock reaches a predetermined price that you can set."
18. Limit Order - "When you set your sale price for your stocks to sell at a specific amount."
19. Market Order - "Your stocks reach the predetermined price you entered."
20. Margin Call - "When your brokerage demands that you immediately reduce your outstanding loan amount down to an accepted loan to value ratio.

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