What Are Dividends?

Hello SikaTribe and welcome to today’s educational blog where we are going to learn about dividends from stocks and how they affect us in our journey to financial freedom with InvestSika.

Introduction

Dividends are rewards agreed upon by the board members of a company mostly in cash that the company gives to its shareholders usually when it is profitable. It is not obligatory for a company that is profitable to give out dividends to its shareholders but a lot of companies reward the trust shareholders have placed on their company with dividends.

Does every company on InvestSika pay dividends?

No, but a lot of companies do and some of them are Apple, Microsoft, Nvidia, and a host of others. In fact, three out of every four companies in the S&P 500 Index pay a dividend.

Remember Kojo and his nine friends who are shareholders of his shopping center all over Ghana? If the shopping center makes a profit of 500,000 cedis in 2020 and the board of Kojo’s company decides to give out 10% of that profit as rewards to shareholders on Christmas day.

Each one of them will get 5,000 cedis as a dividend. This money (dividend) does not affect their shareholding in the company or the value of the stocks they own directly, this is essentially a thank you gift.

Do I get paid Dividends when I use InvestSika?

Absolutely, if you buy stocks of any company that pays dividends on the InvestSika application you will get a notification, and your dividends paid straight into your investSika wallet.

Wrapping up

InvestSika is Ghana’s 🇬🇭 first investment platform that lets you invest in your favorite global companies from the comfort of your home using your mobile money. We are constantly educating you on how to become financially literate and grow wealth. Make sure to join the #SikaTribe today by subscribing here.