What is a dividend?

Everything you need to know about yields, DRIPs, payout ratios and more

👋 everyone,

I first heard the word dividend when I was a kid playing Monopoly with my family. I wasn't sure what it meant, but I knew that I was going to get some money from the Monopoly bank, and that was enough to put a smile on my face!

You’ve probably heard dividends mentioned in the press or on your social media feed in relation to company stock performance or as an investment strategy but if you’re not a trader yourself, you might not be 100% familiar with how dividends work and the potential opportunities (and downsides) associated with dividend investing.

In today’s Concepts of Finance I want to demystify some of the terminology surrounding dividends so that the next time someone mentions it in conversation you’ll know a bit more about what they’re talking about.

We’ll explore the key terminology you need to know, how dividend investing compares with other forms of investing and we’ll also take a look at a hypothetical example together so that you understand the implications of i…