If you’ve just stumbled upon The Novel Mindset looking for information about investing, you’re definitely the type of person wanting to achieve financial freedom.
You’ve come to the right place.
Let’s dive right in, the first thing people think about when they hear about investing is stocks, and the stock market. Without further ado, let’s get started.
Just what are stocks?
In short, stocks represent ownership of a company, in other words, if you own 1 share out of 100 issued shares within a given company, you own 1% of that company. Stock prices are determined through a regular supply-and-demand market structure, meaning that prices increase if more people want to purchase than sell, and vice versa. businesses that issue stocks can also declare what is known as a dividend.
Dividends are, in essence, distributions paid out regularly to shareholders (owners of the company’s stock) on a per-share basis. Now there are a few terms associated with dividends, we won’t be diving in to all dates, just know that dividends are announced on a declaration date, and if you own shares before the ex-dividend date, you’re officially eligible to receive that dividend, even if you sell the stock afterwards. The most important term to keep in mind regarding dividends is the overall yield, a dividend yield is the percentage of the share price that is paid out yearly in dividends; if you own a $100 stock with a 5% dividend yield, you’ll receive $5 yearly. Yields, of course, vary with the share price, but it allows the analysis of the yearly changes in dividend yields, good dividend growth is a great indicator of a great investment. Finally, regarding dividends, it’s important to note that a company is in total control of it’s dividends, and can therefore choose to issue variable amounts or even no dividends in certain times, albeit this is uncommon if the company is known to issue dividends.
Overall, dividends are a fantastic way to generate passive income, do keep an eye on the overall stock growth and you might find yourself a winning stock.
If you’re interested in starting your journey to financial independence and success, I highly recommend picking up Rich Dad Poor Dad, here’s an affiliate link to purchase it on Amazon, you would be supporting me too!
Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!
If you’d want to learn more about achieving goals and fighting a lack of motivation, I highly recommend Grant Cardone’s The 10X rule, please feel free to purchase it using this Amazon affiliate link in order to support me as well!
The 10X Rule: The Only Difference Between Success and Failure