Understanding Stock Investments: Common vs Preferred


Throughout your life, there will be many financial investments to plan for, like saving for college, your wedding, a home, starting a family, retirement, and end-of-life planning. Of course, if you want to live an exciting life that’s only the basics of survival in society; if you wish, you may also want to save up for financial investments for traveling, vacations, recreation, or even creating a small business.  
 
Creating budgets and planning for everything life could throw at you helps out a lot, however, sometimes the unexpected will happen which will possibly throw off your plans. It’s important to note that straying from your financial plans sometimes is okay! If there was one way to plan out every step of your financial life that prepares for every possible circumstance, everyone would be rich. 
 
However, it is important for even people in the lower financial percentile to do their best to create and follow a financial plan, as described here. If you’re having trouble creating a plan, there are plenty of free resources online and even paid professionals to help you out.  
 
Making a bit of extra money, like passive income, can always be beneficial. One way people like to accomplish this is to invest in stocks. When you invest in a stock, you are actually investing in a company to help them perform; they pay you back a higher percentage than what you invested, of course, but only if they become successful, so it’s quite a gamble.  
 
If you are interested in investing in stocks, you should research as much as you can about common vs preferred stock to improve your chances at making the right investments. A basic bit of information you can learn about right here is that there are two different types of stocks: common vs preferred stock. Common stock owners share company profits and also have the right to vote in company decisions. Preferred stock usually does not allow you to vote and involves less risk, but also less payout. 
 
There is plenty of knowledge to absorb to properly trade stocks, as well as plenty of ways to create a passive income. The first step, however, is to create your financial plan.