Let say, for example, that company is doing so well they made huge profit and towards the end of the year the directors or the members members decide to have a meeting and they decide to pay out dividends. So you will get a share based on the proportion of your shareholding.
And the second way in which you will make money is when the share grows or the share value grows. For example, that's why sometimes you hear people saying I wish I bought Capitec bank shares when they were listed earlier when the cost was still R3.00 because you will find that at that time maybe they're selling at R1000.00.
So they will be thinking it would've been best if they bought a very long time ago when they were still R3.00. So that is what we call a share appreciation, which means the value of the share is more expensive than when you bought it. So remember guys, most important, you only make money when you sell those shares at a higher price.
So, some people may decide not to sell their shares and hold them for some time, but again you need to be aware that the share value can either grow or fall. So for as long as you are still holding the shares, it means you haven't made money but he value of your shares is still high. So the moment you make a transaction by selling those shares, that's when you get your money from your investment.
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