What is a share, and how do I make money by owning them?

If you don’t like pizza we can’t be friends. And if you do, don’t expect me to share. Luckily for you, there are loads of people who are willing to share. In fact sharing is often a necessary part of growth and expansion for a company or organization. By offering up and selling parts of its ownership, a company is able to use money generated from the sale of those parts to do more, make more and be more than what it is. As the name suggests, those parts that are up for grabs (at a price), are called shares. Or stocks. Or equities. Potayto, potahto.

Owning shares in a company also means you have a special relationship with the company that other people don’t have. You even have a say in how it’s run because you can vote on certain company decisions, attend shareholder meetings, and more.

When you own shares in a company, you also have the opportunity to make money! Here’s how:

  • First, the value of your ownership stake can go up. Let’s say you buy 1 share of your favorite company’s stock for R50. The company grows and becomes more valuable. That 1 share is now worth R60, you could sell it to make a R10 profit. Or, you could hold onto it, thinking it might go up even higher. (Of course, it could go down. If you sell that share at R40, you’d lose R10 from your initial investment)
  • Second, with some stocks you’re able to earn dividends too. Dividends are company profits that some companies distribute to their shareholders. This is cold hard cash you get just for being a shareholder! 

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Share lingo for you to start waxing:

Stock Exchange - Stocks, shares or equities have a specific place where they are bought, it's called the stock exchange – and in Africa our biggest one is the Johannesburg Stock Exchange, aka the JSE. The JSE is a physical building in Sandton, Johannesburg, South Africa, where companies can sell their stocks, to people who want them. If you're wondering how to buy shares on the JSE, the answer is simple: by investing using your EasyEquities account. 

Returns – The money you make (profit) or lose (loss) on an investment. Returns are often shown as a percentage.

Dividends - Cash the company gives to its shareholders when it makes money. The cash shows up in your brokerage account automatically. Dividends aren’t a given – a company can decide to lower or cancel dividends if times are tough. Sometimes, companies issue stock dividends instead. In that case, you end up with additional stock in the company.

Read more on the different Investment vehicles you can invest in at no minimums here or below.

Different investment vehicles



Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by an employee of EasyEquities an authorised FSP (FSP no 22588) as general market commentary and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. First World Trader (Pty) Ltd t/a EasyEquities (“EasyEquities”) does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information (i) contained within this research and (ii) received from third party data providers. You must rely solely upon your own judgment in all aspects of your investment and/or trading decisions and all investments and/or trades are made at your own risk. EasyEquities (including any of their employees) will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.

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