What Are the 2 Types of Shares?

A share is a unit of company ownership divided among a group. The shareholders receive every profit the company earns in dividend form and bear losses facing the company. Money spent by shareholders in buying shares determines their percentage of ownership of the company. There are two types of shares, including equity and preference shares.

What Are the 2 Types of Shares?

Equity Shares

These are also called ordinary shares. Equity shareholders have the privilege of voting about certain company matters and bear the highest risk. Equity shares can be transferred, and the dividends are a portion of the profits. The shareholders do not get fixed dividends, and their liability is not limited to the investments made.

Equity shares are unique in that they remain in the company and are given back after closing the company. Equity shareholders have a right to vote, and they choose company management. There are no fixed dividend rates in equity capital, and it depends on the obtainability of capital. The types of equity shares are differentiated by share capital. They include:

Authorized share capital: means the maximum amount of capital a corporation can issue as prescribed by its Memorandum of Associations. Depending on a specific issue, it could be increased over time, but the company needs to follow certain formalities and pay some fees for legal procedures.

Issued share capital is a portion of capital that a company offers to investors by issuing equity shares.

Subscribed share capital refers to a part of capital issued that investors agree to and accept. Shareholders usually have a subscription to the shares.

Paid-up capital refers to a portion of subscribed capital that investors pay for holding stocks. Issued shares, subscribed shares and paid capital are similar because most companies agree to the whole subscription amount at one time.

Other types of equity shares include;
Bonus shares refer to additional stocks issued to existing shareholders at no cost or as a bonus.

Right shares refer to shares issued to existing investors to protect their ownership rights.

Sweat equity shares are rewards given to employees or executives after they do their work exceptionally well.

Voting and non-voting shares: Most shares have voting rights, but the company can make a difference and issue shareholders zero voting rights.

Dividend shares: at times, a company can decide to issue dividends instead of shares on a calculated share basis.

Growth shares: these kinds of shares mostly deal with corporations with extremely high growth rates. These companies may not provide dividends, but the value of shares has an extraordinary increase that provides capital benefits to investors.

Value shares are primarily traded in stock exchange markets at a lower price than their actual value. Investors expect that prices rise over time hence better prices for their shares.

What Are the 2 Types of Shares?

Preference Shares

These shares are also called preferred stock and are paid to shareholders before ordinary dividends are issued. These preferential shareholders receive their profits before ordinary shareholders. They also receive preferential treatment when a company is liquidated due to reasons like bankruptcy.

Most preference shares are different from common stocks because they have fixed dividends, they also have no voting rights, shareholders don’t have participation right in management decisions, and the shareholders are given preference before equity shareholders.

Examples of preference shares include:

Cumulative & non-cumulative preference shares: cumulative shares refer to when a company doesn’t give dividends for a particular year to its shareholders and are carried forward in an accumulated amount. If the company makes any profit, these accumulated dividends get paid first. Non-cumulative shares do not have omitted dividends; hence, they have no right to claim accumulated dividends in the next financial year.

Participating & non-participating preference shares: the participating shares provide the shareholders a chance to get the surplus profits after all dividends have been paid. These shareholders can receive preferred and additional dividends depending on certain conditions. These additions are only paid if the dividends paid to common shareholders are higher than the predetermined shared amount. In a liquidation case, participating preferred shareholders have a right to be paid back per-share purchasing price together with the remains of the proceeds from common shareholders. Non-participating preference shares don’t get such benefits and rights apart from the ordinary dividends.

Convertible & non-convertible preference shares: convertible preference shares is an option given to shareholders that allows them to change their preferred shares to a certain number of common shares at any time after setting a date. Mostly these shares are converted after requests from shareholders. Convertible shares are only converted to equity shares after specific stipulations are met from the Article of Association. Non-convertible preference shares don’t have this advantage.

Redeemable & irredeemable preference shares: a corporation has a right to claim redeemable preference shares after a particular fixed time and price or after reaching maturity. Irredeemable preference shares do not face these conditions.

How Do I Invest in Life?

It’s no secret that we live in a time when everything changes. People seek new ways to build their careers, businesses, and lives. And for many people, investing in yourself is the number one way to do that. But how does one invest in themselves? It all starts with getting clear on what you want for your future and what you need to do to get there. That could mean taking the time to start meditating or going on a long-planned vacation.

Embrace Lifelong Learning

Our society is constantly changing, and sometimes it feels like we’re learning new things every day. Especially in today’s technology-driven world, it’s essential to always look for what’s new and what could help us better ourselves. And thankfully, most of the learning today can happen from the comforts of our homes through endless online resources and video courses. Embracing lifelong learning allows you to take full advantage of all the technology and knowledge we have surrounding us. Lifetime learners are people who are always diving deeper into a subject or looking for ways to create new ways of approaching a problem or idea. And it’s an exciting way to live.

How Do I Invest in Life?

Prioritize your Mental Health

When it comes to investing in yourself, there isn’t anything more important than your mental health. If you find that you’re in a place of constant stress, depression, or anxiety stemming from different situations in your life, then it’s time to take some time out and ensure that you’re taking care of yourself. One of the best ways to do this is by utilizing online resources to help you get through difficult situations and change your perspective. Many of these resources have guides that teach healthy ways to deal with these situations, making you much happier and more robust.

Set Goals

Setting goals for yourself is something that every successful person does. Whether learning a new language, starting your own business, or training for a marathon, setting goals motivate you to get there. And when you’re an investment in yourself, you want to be successful! Setting goals will help guide you toward the important things and keep your mind focused on what you want. Plus, goal setting allows you to measure your progress while striving for accomplishments. Additionally, setting goals with a life coach or someone who understands your goals will help you stay on task and keep yourself accountable.

Find a Mentor

While setting goals for yourself is essential and can help keep you from getting distracted, sometimes you need a mentor to help guide you through your journey. Whether it’s a business mentor or someone to talk to about your life, finding the right person to trust and rely on helps point you in the right direction. A mentor has been there before you and has to experience in your field of interest. They can provide guidance and insights that might not have initially come to mind when thinking of your goals. Moreover, having a mentor can keep you motivated and accountable so that you’re working towards your goals.

How Do I Invest in Life?

Practice Gratitude

Gratitude is something that we all can understand. It’s the feeling of being thankful for everything in your life and never forgetting to appreciate the good things that are already present. It’s essential to find ways to show gratitude to yourself and others because it will help put things into perspective, which is always an excellent way to start thinking about the future. One great way to do this is by looking at how you spend your time daily. Many of us are so caught up in making ends meet that we often forget the good things we have going on. If you want to invest in yourself and create a better future for yourself down the line, then starting by finding ways to be grateful is a great way to start.

Get Organized

Clutter and disorganization are huge issues for many people. Clutter can lead to stress, and disorganization can make you feel stuck. But having an organized life is the first step towards investing in yourself. If you want to be successful, then the organization is critical. And one of the easiest ways to get organized is by starting with your home or apartment. Make a schedule for cleaning and organizing, and stick to it. Taking the time out to clean up whenever you feel stuck can help you gain momentum to get unstuck and continue on your way.


As you’ve seen, investing in yourself is a great way to start living a happier and more fulfilling lifestyle. It’s essential for everyone but especially for those looking to retire. And you’ll be able to take full advantage of all the opportunities that come your way once you’re investing in yourself. Investing in yourself is vital to have better relationships with others and, overall, being happier daily. If you want to start living the lifestyle of your dreams, then you’ll have to start investing in yourself. So make sure you’re happy and taking full advantage of what life offers by investing in yourself today.

What is the 70 Rule in Finance?

Are you trying to get a handle on your finances but don’t know where to start? Trying to figure out budgeting, saving, and investing can be overwhelming. Have you heard of the 70 rule of money? The 70 Rule is a popular financial concept that helps optimize your spending. It suggests that you save at least 70 percent of your monthly income for big purchases or investments. The goal is to ensure long-term financial stability against unexpected hardships or emergencies while leaving enough cash flow for day-to-day activities like groceries and other expenses.

What is the 70 Rule?

The 70 rule of money (or what some people refer to as “salary” savings) is based on the idea that if you spend 70 percent of your income on things you want and need, then you can save 10 percent for big purchases like a home, car or an education. If you can save 20 percent of your income, you can use that excess cash to invest and build wealth. This concept is straightforward. It encourages you to spend wisely by focusing on what is important today. It also lets you know that if you can cut back on spending, you have room to save for the future.

What is the 70 Rule in Finance?

How Does It Work?

First, add up all of your household expenses for a month. This includes all the money you put into your checking account, credit card debt, food, gas, and utilities. You need to be very careful when putting together this list because it can be very confusing. This doesn’t mean you always buy everything at the cheapest place possible.

Next, add up all of your monthly income: income from a job, investment income, and any other sources of cash such as retirement savings and Social Security. The result should be your total monthly income. If it is over $3,000 per month, consider using the 70 rule to help make budgeting easier.

The next step is determining what percentage of your income can go toward expenses and what percentage should be set aside for saving each month. The general formula is 70 percent expenses – 10 percent debt repayment – 20 percent saving and investing.

Start with your expenses. Your monthly expenses should include everything you spend money on each month. Of course, this will vary depending on where you live, who is in your family, and what activities you enjoy each month. Focus on the big expense categories like housing, food, transportation, and utilities. These are typically the biggest expense areas in any budget. By focusing on these categories first, you will be able to reduce your expenses faster than trying to cut back on every single item you buy throughout the month.

Now figure out how much you need to pay each month toward your debt. This includes all your outstanding credit cards, student loans, and other debts impacting your financial picture. If you cannot pay this amount, you will have to take extra steps to get it paid off within a short period or find a way to reduce the amount you owe. Once your debts are paid off, don’t forget to add them to the budget on your next paycheck.

What is the 70 Rule in Finance?

The final step is to calculate your monthly savings percentage. You will use this amount for saving and investing each month. This can be a great way to create a solid foundation for your financial future. By setting aside 20 percent of your monthly income, you will have money to put away in case of emergencies or unexpected expenses. Using this money to invest in stocks, bonds, or real estate is also a good idea.

The 70 Rule of Money is a simple concept that encourages individuals to save at least 70 percent of their monthly income. This means that you should put away at least 70 cents for future expenses or investments out of every dollar you earn. The remaining 30 percent can be used for day-to-day expenses like groceries, bills, and other necessities.

The idea behind the 70 Rule is that it helps you build a financial cushion for unexpected expenses or emergencies. It also encourages you to save for long-term goals like retirement, college tuition, or a down payment on a house.

The 70 Rule is not a one-size-fits-all solution and should be tailored to your individual needs and goals. For example, if you’re trying to pay off debt quickly, you may want to save more than 70 percent of your monthly income. On the other hand, if you’re trying to build an emergency fund, you may want to save less than 70 percent.

Ultimately, the 70 Rule is a great way to start your financial journey and ensure that you set yourself up for long-term success. It encourages you to save for the future while still allowing you to enjoy life in the present.

It’s important to remember that the 70 Rule is just a guideline and not a hard and fast rule. Everyone’s financial situation is different, so it’s important to adjust the 70 Rule to fit your individual needs and goals. For example, if you have high-interest debt that you want to pay off quickly, you may want to save more than 70 percent of your monthly income.

In summary, the 70 Rule of Money is a popular financial concept that suggests individuals should save at least 70 percent of their income each month for big purchases or investments. This helps ensure long-term financial stability while allowing enough cash flow for day-to-day activities. The 70 Rule is not a one-size-fits-all solution and should be adjusted to fit your individual needs and goals.

How Can I Invest Smart?

Investments are a primary way to increase your savings and assets throughout your life. Investing can also be done as a business strategy to grow wealth through ownership of businesses, stock, or other investments. It would be best if you were educated on proper investing. If you’re interested in learning how to invest smartly, this article will help you with some tips.

Before You Start Investing, Think Long-term:

Before you think about the different investment options like bonds, stocks, mutual funds, real estate, or commodities, think about the long term. You will want to know that you’re comfortable with your money being tied up for at least five years before deciding to invest in something. If you need money in less than five years, think about other options for temporary investments like stocks or bonds. You should also ensure that you don’t need the money within those five years, or else your investment will be a short-term solution that doesn’t help your long-term goals.

How Can I Invest Smart?

Research Each Investment Option Carefully

No investment is going to be 100% safe and you need to know what kind of risk you can expect in various investments before deciding what’s right for you. Take time to research the different investment options, what they entail, and the expectations you can have. This can be a time-consuming process, so make sure you don’t feel rushed and have time to ensure that you are making a good decision.

Have Investment Goals

Before investing in any of your options, be sure to have realistic goals for the investment. If you’re starting with investing, you’ll want to ensure that it’s for large purchases like a house or car. Like with other goals, you should have some financial planning to know where you are and what you are trying to achieve. The more things line up in your life, the less likely someone can take advantage of your investments.

Start Early

Investing is a great way to increase your assets and savings. Suppose you are going to invest early; either set up an automatic investment schedule through a financial advisor or have your investments tied up for a longer period so you don’t have to worry about mismanagement. Either way, it’s important that investing happens early rather than waiting until later in life when you don’t have the time or patience for the process.

Beware of Fees

You must know exactly what you’re paying for in terms of fees when it comes to certain investments, especially in the stock market. Today, investors are required to pay a fee to be able to buy and sell stocks, which is a nuisance that can result in losses if you’re not careful. Don’t let fees scare you away from investing, and know that it can be worth the money if it means being on the right side of some profitable investments.

How Can I Invest Smart?

Have a Diversified Portfolio

You must not put all of your eggs in one basket. Regardless of your investment, you need to make sure you are diversified so you don’t lose everything. This can be achieved by having various stocks, bonds, and other investments to help balance the risk with the potential for reward. It may take time for your portfolio to get where it needs to be, but it’s worth the wait.

Monitor Your Investments

Like any other type of monitoring, you need to be keener than ever with investments. Keep on top of it so that you can adjust depending on what’s in the market and what kind of rates you’re getting from certain investments. It can be useful to talk with a financial advisor or professional who can help you understand what’s going on in the market and how to manage your assets best.

Be Consistent

Don’t quit investing just because you have had a few bad investments. Keep on investing consistently over the long term to ensure that your assets are increasing and that you don’t get too emotional about what might happen in the short term. If you are consistent in your investments, then there’s a better chance that you’ll be able to benefit from the result of what you’re doing. The bottom line is that you will have to have a solid plan and the right execution to be successful with your investments.

Know Your Limits

Don’t invest too much money, so you aren’t risking everything if something goes wrong. You need to know what you are comfortable investing in and ensure that there’s enough left over in case of problems. If your net worth is tied up in investments, it will be hard to make it through a temporary loss. Make sure to have investments you can manage properly and still have some disposable money to spend.


While it may take time to get the hang of all of this, knowing how to invest smartly can help you see the results of your hard work. The tips in this article offer some suggestions on how to get started, how to avoid pitfalls and other mistakes, and what you should know before going into investments. If you are going through the investing process, make sure that you consider any potential tax advantage strategies that might be available to you.

Creating Credit Calm at Shockts

The old meme begins, “Keep Calm and Carry On…” but here at Shockts its to create CREDIT calm. Most of us are either too young to possibly remember the original “Keep Calm and Carry On” poster created in the UK prior to WWII (it was to help boost the morale of the people who were living in what had to be an extremely anxiety ridden pre-WWII mode).

Of course we see numerous variations of that meme in today’s world. Sometime humorous, and at other times seemingly prophetic, the message endures. Keep calm. You can get through your financial crisis. Keep the faith.