Master the Market with Covenant Dominion Culture's Simulator

Module 1 — What Is a Stock? How Ownership Works

Learn what a stock really is, how ownership works, and why stocks are more than just numbers on a screen.

🔍 Level: Beginner • Ownership Basics

Big Idea: A stock represents partial ownership in a real company. When you buy a share, you are not just betting on a price — you are owning a small piece of that business. Companies issue stock to raise money for expansion and operations. Public companies trade on exchanges using ticker symbols. Stock prices move based on supply/demand and company performance. Shareholders may receive dividends, and there are different share classes with varying voting rights. Companies become public through an IPO, and brokers electronically track who owns what. Remember, stock prices don't always reflect true company worth due to market emotions.

Tool A — Ownership Percentage Calculator

What you'll learn: Understand how even small numbers of shares represent real ownership percentages in companies. See the mathematical relationship between your shares and total company shares.

Your shares (how many you own)

Total shares outstanding (all shares the company has issued)

Tool B — Market Cap Visualizer

What you'll learn: See how share price and shares outstanding combine to create total company value. Understand the difference between small-cap, mid-cap, and large-cap companies and why size matters for investors.

Share price (drag to see the effect)

Current share price: $50

Shares outstanding (total shares, simplified)

Tool C — Fractional Share Simulator

What you'll learn: Discover how fractional shares make investing accessible with any budget. See exactly how your dollar amount converts to partial ownership, breaking down whole shares vs fractional portions.

Dollar amount you want to invest

Share price of the stock

Funding Insight — Using Safe Liquidity to Start Small

Owning stock means owning a slice of a real business, but you never want to put your family at risk just to own shares. A wisely-structured cash value life insurance policy can act as a safe liquidity pool that you borrow against instead of using margin or high-interest debt. That liquidity can help you start with fractional shares and small positions, while you focus first on protection, stability, and long-term stewardship. This approach mirrors how companies carefully manage their capital structure.

Quick Check — What Is a Stock?

1. What does a stock represent?

A random number on a screen. A small piece of ownership in a real company. A guaranteed way to get rich quickly.

2. What does a ticker symbol do?

It shows how many employees the company has. It gives a short code that identifies a specific company's stock. It tells you whether the stock will go up or down.

3. What does market cap measure?

The total number of products a company sells. The total value of all a company's shares combined. The amount of cash in the company's bank account.

Glossary — Module 1

Stock

Simple: A tiny piece of a company you can own.

Beginner: A stock is a share of ownership in a company. When you buy stock, you become a shareholder.

Advanced: A stock is an equity security representing a proportional ownership claim on a company's assets and earnings, often with voting and dividend rights.

Simple: One unit of stock in a company.

Beginner: A share is a single slice of ownership. If a company has a million shares, each one represents a small fraction of the whole business.

Advanced: A share is a discrete unit of equity that can be issued, traded, and retired, tied to legal rights defined in a company's charter.

Ticker Symbol

Simple: A short code that stands for a company on the stock market.

Beginner: A ticker symbol is a few letters, like AAPL for Apple, used so traders can quickly find and trade a company's stock on exchanges like NYSE or NASDAQ.

Advanced: The ticker is an exchange-specific identifier that maps to a company's listed security, used in order routing, market data feeds, and trading systems.

Market Cap

Simple: How much the whole company is worth on the stock market.

Beginner: Market cap is the share price times the total number of shares. It shows whether a company is small, medium, or large.

Advanced: Market capitalization is the aggregate market value of a company's equity, often used in index weighting, risk models, and size-based investing.

Dividend

Simple: A payment some companies send to shareholders.

Beginner: A dividend is a portion of a company's profits paid out to shareholders, usually in cash per share.

Advanced: Dividends are discretionary distributions of earnings or capital, subject to board approval, impacting yield, valuation metrics, and capital allocation.

IPO (Initial Public Offering)

Simple: The moment a company sells its stock to the public for the first time.

Beginner: An IPO is when a private company "goes public" and its shares begin trading on a stock exchange.

Advanced: An IPO is a primary issuance event where securities are underwritten, priced, and distributed to investors, creating a public market for the equity.

Float

Simple: The shares that are actually available for people to trade.

Beginner: Float is the portion of shares that can be traded by the public, not locked up by insiders or long-term holders.

Advanced: Public float excludes restricted and closely held shares and can influence liquidity, volatility, and price impact.

Equity

Simple: Another word for ownership in a company.

Beginner: Equity means ownership value. When you own stock, you have equity in that company.

Advanced: Equity represents residual ownership interest after all liabilities are settled, encompassing common stock, preferred stock, and retained earnings.

Common vs Preferred Stock

Simple: Common stock gets votes, preferred stock gets paid first.

Beginner: Common stock usually has voting rights but may get dividends last. Preferred stock typically has no voting but gets dividend priority.

Advanced: Common equity carries voting rights and residual claims, while preferred shares have fixed dividends and priority in liquidation but typically no voting power.

Module 2 — How Companies Make Money (Business Foundations)

Learn how real businesses earn revenue, pay expenses, create profit, and why strong companies tend to build stronger stocks.

💼 Level: Beginner • Business Basics

Big Idea: Behind every stock chart is a real business. That business earns revenue, pays expenses, and hopefully creates profit. Companies with a strong moat and healthy profit margins tend to survive storms and reward patient investors. Companies exist to solve problems through different business models, and stock prices often reflect future expected profits rather than just current performance. Sustainable growth and operating income stability are key indicators of business health.

Tool A — Revenue → Profit Simulator

What you'll learn: See how revenue transforms into profit through expense management. Understand profit margins and EPS (Earnings Per Share) - key metrics that investors watch closely.

Annual revenue (money coming in)

Annual expenses (costs to run the business)

Shares outstanding (for simple EPS)

Tool B — Moat Strength Visualizer

What you'll learn: Explore different types of competitive advantages that protect businesses. Understand how strong moats create sustainable profits and business model stability that investors value.

Moat type (competitive edge)

Tool C — Earnings Reaction Simulator

What you'll learn: See how stock prices react to earnings reports based on future expectations. Understand why high-profit revenue and sustainable growth matter more than just total revenue numbers.

Choose earnings result

Stewardship Insight — Reinvest Like a Wise Business

Healthy companies do not spend every dollar they earn. They cover their essential costs, protect the business, and then reinvest profits into the next stage of growth. In a similar way, using cash value life insurance as a backup safety net and source of measured liquidity can help you invest only after your income and household basics are stable. This mirrors how strong businesses reinvest on purpose instead of out of panic, focusing on sustainable growth rather than reckless expansion.

Quick Check — Business Foundations

1. What is profit?

All the money a company earns before costs. What is left after expenses are subtracted from revenue. The amount of cash in the company's bank account.

2. What is a business moat?

A short-term coupon or discount. A unique advantage that makes it hard for competitors to copy the business. The number of offices the company owns.

3. Why do earnings matter for a stock?

Because earnings days are holidays for traders. Because earnings show whether the company is actually making money and growing. Because earnings instantly guarantee higher prices.

Glossary — Module 2

Revenue

Simple: Money coming in from selling products or services.

Beginner: Revenue is the total amount a company earns before subtracting any costs.

Advanced: Revenue represents the top-line inflow from core operations, often broken down by segments, geography, or product lines.

Expenses

Simple: Money the company spends to keep the business running.

Beginner: Expenses include payroll, rent, materials, marketing, and other costs needed to operate.

Advanced: Expenses can be operating or non-operating, fixed or variable, and directly impact margins and scalability.

Profit

Simple: What is left after a company pays its bills.

Beginner: Profit is revenue minus expenses. Profitable companies can grow, pay dividends, and reinvest.

Advanced: Profit can refer to gross, operating, or net income, each offering different insight into efficiency and financial health.

Profit Margin

Simple: How much of each dollar of sales the company keeps as profit.

Beginner: Profit margin is profit divided by revenue, shown as a percentage, and higher is usually better.

Advanced: Margins, such as gross and operating margin, signal pricing power, cost structure, and competitive positioning.

Moat

Simple: A company's protective wall that keeps competitors away.

Beginner: A moat is an advantage, like a strong brand or low-cost structure, that protects a company's profits over time.

Advanced: Economic moats create durable excess returns on capital and can include network effects, cost advantages, and switching costs.

Earnings

Simple: A company's profit for a period of time, like a quarter or year.

Beginner: Earnings reports show whether revenue and profit are rising or falling and often move stock prices based on future expectations.

Advanced: Earnings per share (EPS), guidance, and surprise versus expectations drive valuation changes and volatility.

Business Model

Simple: The way a company makes money.

Beginner: A business model explains who the customers are, what is sold, how it is delivered, and how the company charges for it (subscription, product, service).

Advanced: Business models determine revenue quality, scalability, cyclicality, and alignment with long-term market trends.

Operating Costs

Simple: The ongoing costs to run the business day-to-day.

Beginner: Operating costs are expenses like salaries, rent, and utilities that happen regularly to keep the business operating.

Advanced: Operating expenses include SG&A (Selling, General & Administrative) costs and are distinct from cost of goods sold and capital expenditures.

EPS (Earnings Per Share)

Simple: How much profit each share of stock gets.

Beginner: EPS is the company's total profit divided by the number of shares, showing how much profit belongs to each share.

Advanced: Earnings per share is a key valuation metric calculated as (Net Income - Preferred Dividends) ÷ Weighted Average Shares Outstanding.

Ensure Financial Peace of Mind

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