So, you’ve FINALLY saved some money up, and now you want to see it grow. One of the things that I wish I would have realized a long time ago is that while it IS important how hard you work, its even MORE important how hard you make you money work FOR you!

While the stock market can be very beneficial, it has also been known to wipe out fortunes of money. The most recent case of the latter was all over the news the past few years. The Bear Stearns Company (BSC) was one of the world’s largest global investment bank. That is, until the credit crisis hit it. In January 2007, Bear Stearns was trading at $170 a share. After the company got hit HARD from the credit crisis in March 2008 it went from $80 a share to $5 a share in a 10-day period! Talk about losing money! Now, if you had even ONE share of that in January, you would be out $165. Think about people with full-time jobs who had hundreds, even THOUSANDS of shares! From this example, you can see how the stock market can sometimes be a crap shoot.

However, before we get our hands dirty in all of the options that come with stock trading, its important that you know exactly how the stock market works. Basically, a “stock” is the smallest unit of ownership in a company. Technically, since you are part owner, you have the option to vote on members of the board of that company. However, it is more common that those shareholders who own the largest percentage (10% minimum) are those who vote on the board members. However, if the company is one that distributes profits, you get a slice of that proportional to how much stock you own. One of the benefits of stock trading is that even if the company get sued or loses a huge lawsuit and has to pay out millions, just because you technically you “own” a part of the company, you aren’t liable. The worst that can happen to you is that your share of the company loses money or becomes worthless. Another benefit of stock trading is their high liquidity. Basically this means that on any given day the market is open, you can find shares of a company you want to invest in available to buy or sell. To get a feel for what goes on with stock trading, I would suggest joining a “fantasy” stock-trading company, like the one offered by the Wall Street Survivor. Its free to sign-up, and they offer a lot of prizes to the best-performing users.

There are tons of different options as to what you can do with stocks, but for a college student, “stock dividends” are something you might want to look into. Dividends are stocks that pay a portion of profits out monthly, quarterly, or yearly. This means that on top of the profit you make from your stock, you get EXTRA money when they pay out. Through your stock trader, you can choose to cash out this money (usually in the form of a check) or you can re-invest this money automatically, buying yourself more stock! DividendsWatch.com runs one of the premier e-newsletters keeping you up-to-date on the best performing, best paying stocks. However, there are newsletters published weekly by the investment ‘guru’ newspapers as well. Below are the ones that many investors I know subscribe to and read actively. Additionally, because you subscribe through CollegeFinance101, you get a discount!

Investor’s Business Daily. By signing up through us, you get FOUR WEEKS FREE!

Forbes/Wolfe Nanotech Report.

When you buy your , you can not only see where your money is going, but you’ll also get access to our newsletter that will give you updates from EXPERTS on the stock game!

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