Do you remember that warm fuzzy feeling of receiving a handwritten thank you card? Dividends are just like that. They are small thank you gestures from a company for investing and owning their stock. But instead of just a card, they thank you with money.
Dividends are cash distributions from a company to its investors (you!). Some companies pay dividends every six months. Others pay at the end of each year. A few don’t pay at all. Just like thank you cards, dividends are also down to personal preference. Keep in mind there are many ways a company can thank their investors.
Tips and tricks
Remember to reinvest your dividends. They are the key ingredient for compound returns.