This Cartoon Will Teach You Everything You Need to Know About Dividends

Let’s face it: the only reason people invest is to make more money. Whether you’re buying stocks for their potential gains or purchasing bonds for their guaranteed interest, you always want your money to make more money.

That’s what makes dividends so great. In addition to the gains you might get with a publicly traded stock or ETF, you’ll also receive a little extra cash per share when the company does particularly well.

Yet why would a company whose stock you already own give you even more money? Luckily, Investopedia has the answer, and it could land you some extra scratch.

When a company pays you dividends and you withdraw them, you’ll have to pay taxes on the amount you withdraw. You could also do the smart thing and reinvest them in the company, something many brokers let you do automatically when dividends are issued. In the end, it’s your money, and you can do whatever you want with it.

Share this video with your friends below, and maybe think about getting a bigger mattress for all that extra money!