When you're learning about personal finance and investing, you more than likely will come across the word dividend. Dividends are a way for publicly traded companies to share their net profits with their equity shareholders. Many dividend paying companies are mature, profitable, and cash flow stable companies. Because of their mature business standing, they may not have the same opportunity for explosive growth, like a younger upstart organization.
To compensate investors for their lack of growth potential, these companies will payout a dividend.
And when you earn these dividends you may find that they get reinvested. Is this a good thing? I think so. In this video we will explore all of this and more!