Girls That Invest

6Hello, stock market millionaire

Everyone would like to be a millionaire, but what does that really mean? When you look deeper into it, you realise everyone wants the freedom of a millionaire. Not everyone wants a big house or a private jet; not everyone needs 10 bathrooms in their homes or fancy clothes. When people say they want to be millionaires, what they really mean is they want to have the freedom to do what they want, and that often involves time.

So how do you get more time? To have more freedom of time you need more money, but to get more money you need more time. This is where investing comes in.

How the stock market can make you money

Let's forget about the millions for a moment and get started with a basic question: how do you make money through the stock market?

There are two ways to make money in the stock market — capital gains and dividends.

Capital gains

Capital gains are simple to understand. If you bought a home for $500 000 and it sold for $600 000, you made a capital gain of $100 000.

It's the same story with the stock market: if you buy an Apple share for $150 and sold it at $160, you've made $10 in capital gains.

You may be thinking: ‘$10 isn't really helping me on my way to retiring a millionaire though, is it?'

And you'd be correct. Usually it takes a few years, with that beautiful thing called compound interest, before you start to see some really big capital gains in your investing portfolio. For example, if you invested $1000 in Apple at its ...