What Are Monthly Dividends? Your Questions, Answered
Most shareholders have asked the question, ‘what are monthly dividends?’ Click here for a comprehensive and easy-to-digest answer to this question.
Reality is having bills to pay every month that you wish you didn’t have to. The only solution to get rid of bills is to continue paying them.
Your income will suffice to pay your expenses, but wouldn’t it be nice to have extra money coming in to help out.
Monthly dividends can help you out, but what are monthly dividends? Here is your complete guide to understanding monthly dividends:
What Are Monthly Dividends?
So what are monthly dividends? Monthly dividends are payments made to the investors that own stocks in a company. Companies can distribute revenue back to investors. This is one of the ways investors earn a return for investing.
Not all dividends are paid monthly in the United States. It is paid per share of the stock. Depending on how many shares you own, you will receive a certain amount back.
How Do Monthly Dividends Work?
Dividends are usually paid into the stockholder’s account, but some dividends pay with new stocks instead. A company has to approve each dividend and decide when it will be paid and the amount that will be paid.
There is also something known as the ex-dividend date. Investors have to own the stock before the ex-dividend date to receive the dividend. Investors can sell the stock after the ex-dividend date and still receive the dividend, as long as they owned the shares before the date.
Generally, there are two types of dividends:
- Regular Dividends: These dividends are ones that a company knows they will pay consistently over time when they receive earnings. Companies often pay a regular dividend that can be paid in good and bad years.
- Special Dividends: Special dividends are the “one-off” payments. Companies do this when they have made a lot of profits or if they have sold some of their assets. The company may also have some cash they have saved that they don’t need to operate. Announcing a special dividend usually means that they are planning to send money to shareholders, but it will not keep occurring.
What Do Monthly Dividends Do?
Like the term, monthly dividends pay their stockholders monthly. Most companies in the United States pay dividends quarterly. Dividends like special dividends are not paid monthly and often do not keep reoccurring.
Investors find monthly payments more appealing because they get an extra amount of income regularly. Although the monthly payments may not be as much as quarterly ones would be, they do add up.
How Can I Get Monthly Dividends?
There are dividend stocks out there that cater to the needs of the shareholders by making monthly dividend payments. Even some of the most noteworthy and reliable companies pay monthly dividends.
Exchange-Traded Fund (ETF) is a type of fund that owns assets, such as stocks. There are ETF that pay monthly dividends. A monthly dividend ETF is out there for companies like WisdomTree.
Make Money Monthly
If you are looking to make an extra amount of money monthly, look into monthly dividends. Now that you know the answer to the question, “what are monthly dividends?”, you can reap the benefits that they come with.
Get paid monthly with monthly dividends! Don’t forget to keep coming back for more articles like this.