Corporate class
Hey kiddo, do you know what a corporation is? No? Okay, let's start there. A corporation is like a big company where many people work to make products or provide services.
Now, within a corporation, there are different classes of shares that people can own. Think of shares like pieces of a pie. If you own some shares, you own a piece of that pie.
One type of share that a corporation can have is called a "corporate class" share. These shares are a little bit different than other types of shares because they allow you to invest money without needing to pay taxes on the money you earn from those shares until you actually sell them.
Let's say you invest some money into a corporation that has corporate class shares. You buy a certain number of these shares and your money is then put into a special pool with other people's money who also bought these shares.
Now, the company takes that money and uses it to buy things that will help them make more money. For example, they might use it to buy new machines that will allow them to make more products or hire more employees to provide better services.
Over time, the value of your shares will increase as the company makes more money. But, here's the cool part about corporate class shares - you don't have to pay taxes on any money you make until you actually sell those shares.
So, let's say you bought some corporate class shares for $100 and over time they increased in value to $150. You don't have to pay taxes on that $50 increase until you actually sell those shares. This means you get to keep more of your money to invest again in the future.
That's the ELI5 version of corporate class shares. They are a way to invest money in a corporation and get some tax advantages along the way. Pretty cool, huh?
Now, within a corporation, there are different classes of shares that people can own. Think of shares like pieces of a pie. If you own some shares, you own a piece of that pie.
One type of share that a corporation can have is called a "corporate class" share. These shares are a little bit different than other types of shares because they allow you to invest money without needing to pay taxes on the money you earn from those shares until you actually sell them.
Let's say you invest some money into a corporation that has corporate class shares. You buy a certain number of these shares and your money is then put into a special pool with other people's money who also bought these shares.
Now, the company takes that money and uses it to buy things that will help them make more money. For example, they might use it to buy new machines that will allow them to make more products or hire more employees to provide better services.
Over time, the value of your shares will increase as the company makes more money. But, here's the cool part about corporate class shares - you don't have to pay taxes on any money you make until you actually sell those shares.
So, let's say you bought some corporate class shares for $100 and over time they increased in value to $150. You don't have to pay taxes on that $50 increase until you actually sell those shares. This means you get to keep more of your money to invest again in the future.
That's the ELI5 version of corporate class shares. They are a way to invest money in a corporation and get some tax advantages along the way. Pretty cool, huh?
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