why would a person like to be a shareholder in a business?

Answer 1

There are four kinds of resources: raw material, labour, entrepreneurship and capital.

Most of people are content just to sell their labour. There is however, a very large supply of labour, so competition for jobs is fierce. But everybody is doing that, so it must be the right thing to do, right?

Not necessarily. Entrepreneurship is much more lucrative, because so few people are actually doing it, and because it takes much more initiative, hard work and perseverance than what doing a job does.

If you have access to a raw material, you can sell that. Usually however raw materials are becoming hard to come by: E.g copper, gold, etc. Foodstuffs could also be considered a raw material.

And the resource that makes the world go round is capital. That is where you stop working, and where your money starts working for you. You can provide capital to an entrepreneur, and he will be responsible for managing the business, procuring the labour, procuring the raw materials and converting it into a finished product, and then selling it and collecting the cash. And then pays the capital provider for his capital. And that can be in one of two forms, interest for a loan provider, or dividends for a shareholder.

In practice though labour, entrepreneurship and capital is usually combined to a lesser or bigger extent in one person, especially in the case of a smaller business.

But the ultimate position in the capitalist society is to be able to invest your money, and then sit back and let other people provide you with an income.

And it is available to everybody - it just takes becoming uncomfortable, and start working.

Answer 2

Generally for the money. If you are a share holder then you have a right to a share in the profits if there are any. There's more than one kind of share you can have but generally people buy them for the possibility of getting a dividend and in the hope that the value of the shares themselves will rise. Shares can be a risky form of investment but with bigger risk comes bigger returns. The golden rule with shares is don't spend money you can't afford to gamble on them.

However, that is not the only reason for owning them, some shares allow an say in the running of the company and provided you have enough of them you can decide what will happen in the company. Though even then people generally want to run a company for the money rather than the satisfaction.

Answer 3

To make money on their investment. The idea is that if I invested £100 in your business, I would be looking to get more than £100 out.

Answer 4

It's a way of investing money to gain a good profit, don't do it unless you can afford to loose it though! It 's a complicated procedure, not for the faint hearted!

Answer 5

You can sit back and watch the dividend checks arriving through the letter box. It beats working for a living, any time.

Answer 6

To share in the profits.

Answer 7

Because every quarter you get a paycheck (It's called a dividend) but you don't have to work to get paid.