Dividend Investing
Dividend payments are a part of a company’s profits or earnings which get paid to the shareholders of a company. This usually takes place by way of a payment of cash. Every company can have a different schedule of dividend payments, however, many companies that have dividend paying stocks pay out those dividends every quarter. The distribution dates should be declared by the company in advance. There are companies that pay monthly and some that pay yearly, but the majority distribute on a quarterly basis.
A smart method of creating compounding returns is to reinvest any dividends that are payed back into the stock. This has the compounding effect of giving you more money to buy shares which will themselves create more money to buy more shares which will create even more money to buy more shares, and you get the picture. Dividend investing is a fantastic way to ensure that you will be generating the income that you need during retirement.
Related posts: