12th Nov 2009 by Amelia Timbers
To invest means to commit money to earn a return. In most companies, you can do this buy buying their debt (bonds) or their stock. Buying corporate bonds provides cashflow to the company while you eventually earn a return on your money- the interest and or coupon rate the company pays on the bond. You could also loan the company money with a similar effect- you get your money back from the company plus interest, they get the cashflow. It can be difficult for average investors to buy corporate bonds, which are typically sold at large scale sums to institutional investors. The most common way of investing in a company is to buy shares of that company's stock. This is like purchasing small pieces of a company, where you earn a proportional fraction of the company's income as it grows.You can purchase stock online, through banks, and through brokers.
Like This Answer?
This answer is the subjective opinion of the writer and not of FinancialAdvisory.com