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Let’s buy shares: what you need to know

Buy shares at the Johannesburg Stock Exchange from as little as R5

Although I’ve never done it myself, I would imagine the process of buying shares a very daunting one, because how do you know who to trust?

People invest for the future in various ways. While some create trust fund accounts for their children and others buy property, others are more interested in buying shares, as they also provide an income while they accumulate wealth. My friend and I were talking about buying shares, and that prompted me to do some research on the safe and sure ways to buy shares.

A safe way to purchase shares is by ensuring the company from which you’re buying, is listed on the Johannesburg Stock Exchange (JSE). This is oldest existing and largest stock exchange platform in Africa, which guarantees you that you are buying from a legitimate company. However, if you’re looking to buy shares from a smaller company that isn’t publicly listed, then you would have to sit down with the owner (s) of the company and express your interest in buying equity.

What’s the difference between shares and equity, you ask? Well, equity is buying into a business whose liabilities have been paid off. You do not gain ownership of the company, you merely invest in it. Shares, on the other hand, means that the company shares its ownership with you in order to raise capital.

Another way of buying shares is through stockbroking platforms. Two examples of these are SBG Securities, which is a product of Standard Bank, and Easy Equities. To sign up for these, you need to forward your banking details, copy of identity document and tax number. Here, you can trade and buy shares.