Monday, September 29, 2014

Receiving Dividends from Big Companies!

Yesterday, after attending my cousin's wedding, I checked my email and got a message from my online stock broker telling me that I got dividend from ALI (Ayala Land Inc.), one of the big companies which I bought shares from.


So what is a dividend anyway?

An investor can earn from stock market in two ways: through price or capital appreciation, and through dividends

You earn through price or capital appreciation when the value of the stocks you bought increase. 

Dividends are "extra incentive" or "bonus" given by the companies to their shareholders when the profit is good. In the world of stock market, not all publicly listed companies are giving dividends. There are some generous companies that give this kind of reward to their shareholders. The dividend also attracts investor to invest in their company, and buy more shares. The dividends depend on the number of shares you own. The more shares you have simply means greater dividend you will receive!


How do you compute your dividend?

In the Philippines, there are three types of dividends: cash dividends, stock dividends, and property dividends.

Cash dividends (which I received from ALI) is the most common type, in which the company gives extra cash to its owners. You just multiply the cash dividend announced by the company to the number of shares you have. Let's say the company declared Php 0.10 dividend per share, and you own 200 shares of that company. That means, you get Php20.00 (less the withholding tax).

Stock dividends are those additional shares given to the owners. If the company give you 10% stock dividend and you own 200 shares, that means you will get additional 20 more shares. Your total shares will now be 220.

Property dividends are the rarest form given by companies. These are other assets such as share from subsidiary companies, or other tangible products.

I'm happy that I started investing in the stock market few months ago! With the help of my mentors, I can see that my investments are getting better :)

I wrote this blog in hope of encouraging Filipinos to start investing in the stock market NOW! Do you want to make millions in stock market and retire a happy millionaire? Watch how Bo Sanchez guides many Pinoys in investing in stock market. Click here to learn more✔✔

Stock market is just one of the best sources of your passive income (through investments). There are lot more vehicles that you can ride on to your financial freedom journey. If you are a new investor in the stock market, or planning to start investing, I encourage you all to attend the Free Financial Seminar conducted by the Truly Rich Makers Team! Our team, Truly Rich Makers - IMG is conducting a Free Financial Management Seminar and Workshop in Makati.This is a limited slot only. Register now for FREE! :)
 Click here to register--> Financial Literacy 101

Happy Investing! :)

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