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When you buy shares in a company you are investing in it and providing the company with capital.

Yes, but I am not generating anything.

Yes you are. You are choosing where to put your money to generate the best return.

Where does that return come from? It doesn't materialize from thin air. That money was generated by a laborer before it was shuffled to the various shareholders.

It comes from directing resources to generating capital. Those resources will be some combination of goods and services bought from others or provided by the investor themselves.

When you buy stocks, you are in fact directing resources, in the form of goods/services, into building a company, which is a form of capital.

This effect is the ultimate outcome of a long chain of reactions that originates with the exchange of your money for the seller's stock. If you had spent your surplus income buying consumer goods instead of the stock, that chain of reactions—and the outcome of new capital they produce—wouldn't have happened.

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