By Febyolla Goss
Febyolla Goss writes about Personal Finance for Children and illustrates all BUCK Academy book series.
Edited by Barbara Kindness, a Public Relations Specialist for Author.
If children hear the name Stock Market and ask, “What is STOCK?,” how do you explain what STOCK is?
Should we teach our children to grow their money in the bank or buy stocks?
You can explain “STOCK” this way:
A “stock” is like a small piece of ownership in a company. When you own a stock, you own a tiny part of that company. If a company has 1,000 shares of stock and you buy one share, you own 1/1,000th of that company.
Stocks grow in value when the company they represent does well or is expected to do well in the future.
Companies sell stock to raise money for things like building new stores, creating new products, or hiring more workers. When you buy a stock, you’re helping the company grow, and in return, you get to share in the company’s success.
If the company does well, the value of your stock might go up, meaning you could sell it later for more money. If the company doesn’t do well, the value of your stock might go down.