What is a Dividend? A Simple Explanation + 4 Tips
Whether you are just starting to invest or have been investing for decades, dividends can be a valuable part of anyone’s investing portfolio.
You’ll typically see dividends associated with those getting closer to retirement who are not looking for as much growth in their investments but are more so looking to supplement their income.
Generally speaking, a dividend is a distribution of a portion of a company’s earnings paid to the shareholders.
What is a Dividend?
Many companies that payout dividends are well-established and stable companies. By paying a dividend, they attract investors creating more demand for their stock.
Why Companies Pay Dividends
Many companies won’t pay dividends for several reasons, the biggest being it hurts their bottom line.
Why Companies Don’t Pay Dividends
The company will automatically pay to your brokerage account at distribution time by buying a stock or mutual fund that pays out dividends.
How Do You Earn A Dividend?
Dividends can have tax benefits for both the shareholders and the company giving them out.
Dividend Tax Benefit
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