Paper Millionaires

Remember back in 1990 or whenever it was that all those internet IPO's were happening? So many people became "millionaires" on paper because they owned stock and then the stock was on the open market or the company had a high valuation. So you multiply the stocks you own by the stock price and you get some crazy high number, right?

It doesn't really work like that. Stock is not worth the current price. The current price is just the last price someone bought or sold a share for. If you own a huge amount of stock and start selling it off really fast then the value of the stock will drop. Stock is only worth what you can sell it for, and as far as I know there isn't any way to calculate what that is going to be.

I think it's worth point out that stock isn't money, it's ownership. When I look at my personal stock portfolio and I see all that red (that Martha Stewart Living Omnipedia is KILLING me) it doesn't really bother me, because I bought the stocks I wanted to own, not the stocks I thought would do well (FYI: watch out for those newspaper stocks!).