Home     About Us    Contact Us     Contribute     Privacy
Investing
Stocks
Bonds
Mutual Funds
Biz
Credit
Career
College
Economics
Tax
More
 
 
Marketplace
Related Articles
Related Discussions
Related Definitions
Related Categories
Tip of the Day

Tip of the Day Protect Yourself From Identity Theft

Protect Yourself From Identity Theft - You should run your credit report at least once a year to ensure that no one else has been using your information to obtain...

read entire tip

Recently Added
Other Great Sites
 

Dividends and Capital Gains

In our article about stocks, we began to scratch the surface on what dividends and capital gains are. We will now go into a little more depth without trying to confuse you.

As you've probably already figured out, people buy stocks because they hope to make money. Making money in the stock market doesn't require you to be an upper-class citizen with a lot of money to invest. It just requires you to pick the right stock.When a person makes money through the stock market, they've probably made it either from dividends or capital gains...or maybe even both. A dividend is a small payment that a company gives to investors. This payment is a small share in the company's earnings. Here's a quick example of how this works:

Ok, let's say you buy a few shares of a stock you like and that company makes $100 million that year. They have sold 100 million shares of stock and they decide to give investors 30 cents for each share. This means that they will pay you 30 cents that year for each share that you own. It may not seem like a lot but that cost the company $30 million...which is quite a chunk of change!After the company pays investors, they can then use the rest of the money to help grow their business by doing such things as hiring more employees or buying new equipment.However, capital gains are what most people invest in stocks for. A capital gain is the difference that you pay for a stock and what you sell it for. Here's a quick example of how capital gains work: Last year, you purchased 10 shares of stock at $45 per share. The company did well and this year the stock is worth $60 per share. That means you have made $15 per share of capital gains and, because you have 10 shares, you've made $150 total!Capital gains and dividends are income, money gained from work or investments. The IRS (Internal Revenue Service) taxes you for both dividends and capital gains because of this. So if you want to get started in investing, you should make sure that you know you'll be paying taxes on any money that you make.If you continue to invest throughout your life, these gains can make you a very rich person. And if you're starting at a young age, the amount that you can make by keeping your money invested and acquiring more capital gains and dividends is extraordinary!

 

Discuss It!
1 2 >

jordanhinze said:

i love you kyle

U Ally said:

My online broker has my shares in a stock as "reinvest dividends and capital gains"...does this mean that when I do sell the shares I am losing my capital gains?

Will said:

Ally, when the time comes and you decide to sell your shares, you will receive all of the capital gains they have earned. The reinvestment of capital gains is more of a mutual fund thing. Your broker deals in both stocks and mutual funds. Instead of asking if you want your stock dividends, and your mutual fund dividends and cap. gains reinvested, s/he has just combined them into one option. Hope this helps!

replique montre said:

I really appreciate the kind of topics you post here. Thanks for sharing us a great information that is actually helpful. Good day!

www.replicaorologi4it.com said:

*Hello! I just would like to give a huge thumbs up for the great info you have here on this post. I will be coming back to your blog for more soon.

Safe Work Method Statement Template WorkCover said:

Really nice and interesting post. I was looking for this kind of information and enjoyed reading this one.

bet365 offers said:

Awesome courier i want remark further acknowledges for the info. Erudition is definitely a adhesive topic. Nevertheless, is however between the initial texts of our stretch. I enjoy your announce besides ogle advance to also

Free Merchant Accounts said:

Such a truly beneficial column. Really fascinating to predict this item.I would want to acknowledge you for the undertakings you had made for essay this tremendous piece

Cheap e liquid said:

Indeed unit josh momentary on by coincidental suffocating is an immoderate aggregate of besides something that no attendant or watchman can always totally remit themselves for.

Internet Business said:

BusinessOpportunity.com is a leading source for finding business opportunities for sale—along with a number of other exciting work-at-home and other small business-model options like distributorships, licensee opportunities and small franchises—any one of which may be specific to your needs. Our team is dedicated to helping you realize your financial goals by providing you access to the perfect business opportunity, one that is just right for you!

Rd - Error 0x80070005 Fix said:

A learnt a lot about this from playing football manager, ironically.

original orkopina said:

This post on the stock gains proved to be a really helpful article for me as I was so confused about the technical terms in business. I am a business student and the website has helped me a lot to know about the different terms

franchise emlak ofisleri said:

The web site is lovingly serviced and saved as much as date. So it should be, thanks for sharing this with us.

Sat?l?k müzik seti said:

Really nice and interesting post. I was looking for this kind of information and enjoyed reading this one.

Toronto Wedding Limos said:

that you make.If you continue to invest throughout your life, these gains can make you a very rich person.

web optimisation said:

Imperial Media Solutions provide advanced website tracking software to increase marketing results and close more business. Our web tracking software tracks individual users to build profiles. We also provide media solutions to help increase web traffic such as discounted business directory listing, powerful PR campaigns, search engine optimisation and can also buy backlinks to increase website ranking.

how to get online votes fast said:

And if you're starting at a young age, the amount that you can make by keeping your money invested and acquiring more capital gains and dividends is extraordinary!

Image Retouching said:

Your broker deals in both stocks and mutual funds. Instead of asking if you want your stock dividends, and your mutual fund dividends and cap. gains reinvested, s/he has just combined them into one option. Hope this helps!

inflatable bed queen said:

In my opinion it is my opinion a great deal more consumers really need to investigation this unique, good records!......

Movie Tube Now said:

It is somewhat fantastic, and yet check out the advice at this treat.

Most Popular Articles
Most Popular Definitions
Related Questions
 
Daily Definition

Definition of the Day Borrowed Stock

Borrowed Stock - Borrowed stock is stocks that are found in a short sale that a short seller obtains on loan from a broker, usually his or her own broker, and then has to sell in the open market. There is a fair risk to this type of activity, as...

read entire definition

 
 

 

 

Home     About Us    Contact Us     Contribute     Sitemap

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Copyright © 2009 TeenAnalyst.com