So now is the question, Who am I? Why should you listen to me? basically like you, I'm a busy professional working in health industry for 30 years, it's chiropractor treating patients. And I found that I enjoy trading stocks in the market to make money to make some side income. But my lifestyle is such that I cannot commit full time to it, nor do I have an interest in being full time. So, if you're like me, you want to make some money on the side.

But you don't want to take a lot of time or stressed out trying to use different methods to make money. By going through this course with me, you're gonna find that this course moves fairly quick and you'll be able to buy and sell stocks on the open market, make some side income and not have to be stressed out or in about How much risk you have in the market? Now, let's get started with the basics. What is a stock? A stock is basically a piece of paper where you're buying a share of the company, giving the company your hard earned money so that they can expand their business. And when they expand their business, they can increase their profits, which come back to you usually in the shape or form of a dividend.

Now, in the open market, what is the stock really worth? Well, this is always the question there is capital gains, and there's dividends. When you buy a stock, and later on, you sell it, hopefully at a profit, you're generating that profit which is called capital gains. The other way to look at it is if you don't sell the stock over time, the company will usually give you back money for having invested in the company, and that's a form of a dividend. Now, some companies pay monthly, some pay quarterly. Some pay once a year, somehow special dividends.

When people buy stocks, they are betting on two things. They want to sell it down the road for possible profit generating capital gains. And or they want to hang on to it over a period of time where they get some of their investment back in the form of a dividend, which lowers their cost basis. And eventually they may or may not sell it again for capital gains, but they're able to keep the dividends for that period of time. Some people never want to sell and they just want to live off dividend income in retirement. And that should be your ultimate goal.

Never touch principle. The adopted evidence And have a nice secured retirement lifestyle. We're gonna get into those in more detail later. The next question is what are these mysterious ratios? p EPSPB. I'm going to make this fairly easy.

P is price to earnings. The way to think about it. If I buy a stock at today's price, how long do I have to hold it before the earnings come back to me in the form of a dividend? In other words, how long do I have to hang on to this darn thing until it pays for itself. So if I buy a stock today, say at 15 price per earnings is the number for every dollar I put in buying it today. I got to sit on that darn thing.

At 15 price for earnings number for 15 years to get that dollar back to pay for that. stock. So obviously we want to buy stocks that are low in price per earnings p number. One way to look at it is the s&p 500 has a p number, which recently I believe was around 18. means if I bought the s&p 500 all 500 stocks today I would have to wait 18 years to get my money back. We generally want to buy low PE numbers under the s&p 500. Usually looking at stocks that trade at 810 12.

Again, how many years they have to hang on but they get that dollar back. The next number is price per sale. This is a very interesting number. In fact, of all these numbers, it has been shown in research. price per sale really is the one key number, the lower your price per shell price per se Number, the higher chance that stocks going to move up allowing you to generate profits when you sell capital gains and or dividends over time. So price per sale is for every dollar I put in that company, how much sales or how much profit is going to make down the road and how fast I get that back.

So we want a low price per sale and number, usually under three is what we prefer. The final one is price per book. This is the breakup ratio with a company hard assets. I bought a company today and went bankrupt tomorrow. And they sold all the assets off how much of that money is going to be returned back to me as a stockholder? Well, the lower this ratio, the higher chance I'm going to get that money back.

So again, we want this number to be low. And don't worry too much about these numbers because as we go through them the methods of generating income by trading stocks, you're going to already be looking at companies that are low PE, low prices, sales and low price to book ratios automatically. The next question is why buy stocks over bonds? What is the bond? A bond is basically debt. You're giving a company debt money.

And over time, they give you principal payments on that debt. And eventually, if you hold it to maturity, you get your full amount back as a bond. Why buy a stock over a bond? Well, you should because bonds don't pay as much of stocks. They're not as risky, very stable. And as long as you hold that bond maturity, you're pretty much guaranteed unless the bond company goes broke, you're going to get all your money back plus that stream of income.

But because it's less risk, you Not going to make anything to speak of the capital gains and your dividend payout from the bonds is going to be very small. So for example, last year 2017 s&p 500 generated over 19% for the stock market, if you bought and hold top 500 stocks for one year, you made over 19% and in the market last year, but bonds on the other hand, if you put the same amount of money and you didn't make very much the bonds were running between 2% three 4%. And that's it. So if I had $100,000, and I held it for one year, last year, saying the bond paying 3%. I made $3,000. Nothing to get excited about there and if I had the stock and I held it the s&p 500 for one year and I made Over 19%, that's $19,000 of profit.

So you can see that stocks usually outperform bonds. But again, stocks are risky. And while I'm thinking about this, realize that there's always a chance when you invest in stocks, you can lose money and bonds, you can also lose money, but the chance of losing money in bonds, it's much less than overstocks.