There are two possible ways.
The first way is when a stock you own appreciates in value - that is, when people who want to buy the stock decide that a share is worth more than you paid for it. They might decide that because the company that issued the stock has earnings that are improving.
The second way is when the company that owns the stock issues dividends - a payout that companies sometimes make to shareholders.
Yes. Put as much money as you can into tax-sheltered retirement accounts, such as 401(k)s and IRAs. Because the investments in those accounts grow tax-free until retirement. When you own stocks outside of tax-sheltered retirement accounts, there are two ways you might get hit with a tax bill. If your stock pays a dividend, those dividends are taxed at a rate of up to 15% or 20% at the end of each year. In addition, if you sell a stock, you pay 15%/20% for high earners of any profits you made over the time you held the stock. Those profits are known as capital gains, and the tax is called the capital gains tax.
Stocks carry a much greater risk of short-term losses than bonds or cash (the other two major asset classes). Since World War II, Wall Street has endured many bear markets (defined as a sustained decline of more than 20% in the value of the S&P 500). As a result, it's generally not a good idea to invest a big chunk of money in stocks if you'll need to spend the money within five years or so.
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"Insider trading" is a term that most investors have heard and usually associate with illegal conduct. But the term actually includes both legal and illegal conduct. The legal version is when corporate insiders—officers, directors, and employees—buy and sell stock in their own companies.
Also, The illegal variety of insider trading occurs when a securities transaction (i.e., purchase or sale of stocks) is influenced by knowledge that only a small group of people inside of the company whose stocks are being traded would know about.
