What is a Dividend In The Stock Market?

Warren Buffet earns around $6,731 per minute in dividend income.

Yes, per minute.

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Courtesy of CNBC

“A dividend is a distribution of a portion of a company’s earnings, decided by the board of directors, paid to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property.”

For example if you own shares of company X and they are consistently earning profits, they will hand out a dividend of 50 cents per share you own as a thanks to it’s shareholders for all the help and support.

Make sense?

The awesome thing about owning stocks that give out dividends is you are earning an income from two sources which is why they are so attractive to investors like Warren Buffet.

The first source of income from owning the shares while they’re rising in price. (hopefully)

The second source is earning income from the dividends being handed out, which are usually in the form of cash.

They are very popular in retirement funds because the dividends provide a nice source of income.

Some popular companies that hand out dividends are Wal-Mart, Costco, and Microsoft.

Start doing some research on potential companies that will give you returns both in the market and from dividends so you can start earning more.

Feel free to comment any questions below!

Sources:

The Motley Fool

Investopedia.com

4 thoughts on “What is a Dividend In The Stock Market?

    1. Great question! We wrote another blog post on how to buy stocks and where to sign up, I think that may give you some answers!

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