A Simple Explanation + 4 Tips: What is a Dividend?

Whether you are just starting to invest or have been investing for decades, dividends can be a valuable part of anyone’s investing portfolio.

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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.

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What is a Dividend?

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Let’s use a basic example of how a dividend might work. Company X has a share price of $100, and you own 100 shares.

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Company X announces they will pay a $1.50 dividend per share on the next payment date. On the payment day, you’ll receive $150 worth of dividends.

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Why Companies Pay Dividends

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Usually, companies just starting up, like a new online business, are more mindful of their cash flow.

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- Find Companies With Strong Track Records - Find Sustainable Dividends - Annual Increase Streaks - Always Reinvest Dividends

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