What is a Dividend?
A dividend is an amount of money that a company decides to pay its shareholders during the course of the year (usually on a quarterly basis).
Before each payment, the company declares the amount of dividend they will be paying per share to its shareholders. The shareholder must own the shares before the ex-dividend date to receive the payment on a later date called the payment date.
The dividend is often expressed as the dividend yield, which is the dividend amount divided by the current share price. It is important to note that the dividend yield changes with the share price, but the dividend payment per share remains fixed until it is adjusted by the company.
One of the more popular investment strategies is to invest in dividend-paying stocks. In this article, we will go over the basics about what are dividend stocks and the advantages and disadvantages of dividend investing. Dividend investing is a powerful method to grow your wealth while generating regular income. Depending on your financial situation, you … Read more
The 4% Safe Withdrawal Rate (SWR) was first introduced by William Bengen in 1994 and later supported by the Trinity Study in 1998. The rule basically states that when you hit retirement age, you can withdraw 4% of your total retirement savings initially. Each year, you increase the amount by the inflation rate. Assuming you … Read more
When you stop working and have to start withdrawing money from your retirement accounts, you have to decide the best way to withdraw money from different accounts. Do you take money out of your tax-free accounts like Roth IRA and Roth 401(k) first? Or do you withdraw from your tax-deferred accounts like Traditional IRA and … Read more
Asset Location is a tax-efficient investing strategy to help you minimize taxes and grow your investments faster by holding investments in the best-suited investment accounts. This strategy leverages the fact that investments in Roth IRA and 401(k) are tax-free, and investments in Traditional IRA and 401(k) are not taxed until the money is withdrawn. For … Read more
One of the most powerful forces in finances is compound interest. Compound interest is interest that is paid on the principal and also on the interest that previously earned on your investment. This helps you grow your investment at an accelerated rate. On the other hand, compound interest can work against you — for instance, … Read more
You may have come across references such as the S&P 500 has grown 10% annually for the past 30 years or something to that effect. You may wonder what that means and where did they get that number. When someone mentions an annualized return, most likely he is referring to the Compound Annual Growth Rate or … Read more
I finally gave M1 Finance a try…so far, I am impressed. I have been looking for a way to easily invest extra cash sitting in my savings account but didn’t want to do it with my current brokers because there is no way to invest a small amount of money easily and cost-efficiently. As it … Read more
One of the ways to generate passive income is through dividend investing. But where do you start? Stock picking is a term that many of us are wary of; however, there are ways to choose solid stocks for your income portfolio. One way to find the best dividend stocks is to start with the Dividend … Read more