A company can earn profit in a number of ways. The most common way is through dividends, which are payments made to shareholders. A company with a $2 million profit can still be profitable if there’s a big decline in revenue. But it can’t stay profitable if it loses money in its business model. To avoid this problem, companies can raise their dividends. The idea is to buy shares in profitable companies.
There are two main ways to invest in shares. The first is through direct equity, which is a type of mutual fund that is invested in a specific company. This investment has a low risk and high return potential. But the downside is that it’s a long-term commitment, so you should invest in shares for the long-term. You’ll get your money back and be able to benefit from a higher stock price.
Another way is through shareholder dividends. The profits that a company earns through their shares are paid to the shareholders. These are usually paid on a quarterly basis. These are not guaranteed returns, but they are great ways to build wealth. As a rule of thumb, dividends are the simplest way to earn a profit in the share market. For retail investors, however, it is best to invest in shares for the long-term.