The lender's profit is assured if the enterprise does not fail, and the added capital not only insures against failure, but it may enable the manager to succeed beyond any expectations he could have if forced to carry on the work with only his own resources. The capitalist may choose to buy land in the suburbs of a city and build thereon a house to be sold or rented. This should always be made to secure the money borrowed. A capitalist may establish a fund from which, on good security, the business men of the community may obtain loans, for which they get a higher interest than that which they undertake to pay to those whose money they are using. Again a capitalist may undertake to loan to farmers, who have not the means to carry on the work, but who are anxious to make their lands more productive, through drainage and crop rotation. In this case the money loaned is secured by the usual bond and mortgage. Or it may be that another body of men is anxious to start a great manufacturing enterprise in the neighborhood, but has not enough money to place the venture on a paying basis. In the latter case it appeals to the capitalist, and he, though not bearing enough available means of his own, undertakes the work with the knowledge that he can rely on the small investors, whose contributions he has before managed successfully. STOCKHOLDERS Or it may be that the manufacturing company does not ask the capitalist to assist, but itself goes to the small investor with a prospectus of the enterprise, and offers to sell stock in the concern at $50 or $100 a share, as the case may be. This gives a chance to enjoy the profits, be they great or small; but with the chance for larger profits there comes the greater risk which must always be assumed in such cases. Sometimes, when a company is starting, its stock may be put below par. This stock, in the event of success, may appreciate, as with some bank and other corporation stocks, many times above the par value. When stocks sell in the open market for their face value, they are said to be at par. KINDS OF STOCKS Most companies, organized on a stock basis, issue stocks of two kinds. One is known as "common" the other as "preferred." As the name implies, preferred stock (its rate of interest is always fixed) is entitled to be paid out of the net dividends first. Whatever is left after paying the preferred stock interest is divided up equally among the shares of common stock, each getting according to his holdings. Sometimes the dividends on common stock are far greater than those on the preferred. The preferred stock dividends are regarded as a fixed charge, but there can be no limit as to the payments on the common stock, if the funds are available. The stocks of railroads, factories, banks and other enterprises may be good forms of investment, and for this they are often held for long periods by investors for revenue.