What Is a Dividend, and Should I Care?

Did you know that some companies pay you to own their shares? This is called a dividend!

When a company chooses to give a dividend, they are choosing to distribute a company’s earnings to their shareholders. They will fix a certain amount of money to be distributed per share, so the amount that you ultimately get will depend on how many shares you have.

Dividends are usually paid out in cash, with payments typically occurring at the end of every quarter (so four times a year). You can then withdraw this cash straight to your bank, or reinvest it.

By reinvesting your dividend payments, you can put yourself on a path to a growing investment portfolio and take advantage of compounding interest.
Remember though, that not all companies pay dividends – make sure to do your research before investing.

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