Dividend

One of the things a company can do with its profits is give them to the shareholders in the form of cash; this is called a dividend. Getting cash is nice and thus so are dividends. Even better, as earnings grow, companies can give out more dividends, which is even nicer. They can also cut them in bad times (which sucks). What do you do with that cash the company sends you? Best to reinvest it. Over time, reinvested dividends are a major source of stock investor returns.I often say that investing in yourself will pay dividends later on. You’ll hear it used in that context, and it means that the work you put into something now will allow you to reap the rewards later.

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2017-12-12T20:13:59+00:00

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