Dividend
A dividend is a cash payment some companies or funds make to investors.
Why this matters
Dividends can provide income and can be reinvested to support long-term compounding.
Simple example
If a stock pays a $1 annual dividend per share and you own 100 shares, you receive $100.
Common mistakes
- Chasing only high dividend yield without checking quality.
- Assuming dividends are guaranteed forever.
- Ignoring taxes on dividend income.