How does the stock market work?? For example.. If I were to buy $9,000 worth of FordM shares at $9.00 each..?

Question

and each shares ends up going up to $12.00 each.. How much profit would I end up with after all the taxes are taken away? THANKS!

Answer 1

Good question! The profit, obviously, will be the difference between what you sold your shares for and what you paid for them, minus the trading fee ($7 total per trade at Scottrade). And of course, if you sell the shares you must pay capital gains tax, which is 15% of the total profit if you hold the shares for one year or more, and your regular income tax rate (around 15 to 20% unless you're rich) for shares held less than one year.

Remember that you pay no taxes until you sell.

Answer 2

You are kidding, right? "After all the taxes are taken away"--how the heck do I know what your taxes are? Besides, which taxes, common income for some short term trading, or if you held it for over a year and figured it at capital gains tax rates? What if you did it in an IRA? It is a hypothetical math problem, get your calculator out if you can't figure it in your head.

Answer 3

Do not put that much money into Ford. Spread it around into a few others, such as GE, Cisco, P&G, etc., because who knows if Ford will actually be around years down the road.