2- HOW TO INVEST IN STOCKS | BEGINNER'S STEP BY STEP INVESTING GUIDE | INVESTING IN DIVIDENDS

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Beginner's Guide
How To Invest In Stocks? In Canada - What is a Dividend?
This is the second video of a five-part Beginner's Guide playlist

What is a Dividend?:
Dividends: Sum of Money (Assets) paid out regularly by a company to its shareholders out of its profits.
Income from Dividends are taxed less than Capital Gains (Advantage to Passive Investor over Active Investor)

Tax Implications:
Eligible Dividend: Additional tax credit received by the Government of Canada when filing your Annual Taxes.
Less tax, more money in your pocket. As simple as that.

The first things to know when you buy a dividend stock:

1. Annual Dividend Rate $
2. Dividend Yield %
3. Payment Frequency (monthly or quarterly)

Example of a well known Canadian Stock that pays out Dividend money (Passive Income)
BCE better known as Bell Canada or simply Bell. If you're in the U.S. watching this, Bell Canada is the Biggest Telecom company in Canada, so similar to AT&T or Verizon.
So a very well established and reliable company in terms of making profits for its shareholders.

Bell Canada share price at this moment: $62.51
1. Annual Dividend Rate: $3.33 per share in CAD
2. Dividend Yield: 5.33%

Dividend Yield Formula:
Annual Dividend/Share Price
$3.33/$62.51 * 100 = 5.33%

If you invest $10 000 in BCE right now at a share price of $62.51, you own 160 shares of the company.
160 shares * Annual Dividend Rate of $3.33 = $533 a year of dividend payments on your $10,000
or
Money Invested + Dividend Yield %
$10, 000 + %5.33 = $533 a year of dividend payments on your initial ten thousand dollars invested.

You should be aware of 3 important dates surrounding dividend payments. (This information is found in your Brokerage Account. Watch the fourth video of this series on How to Open and Use your Own Brokerage Account)

1. The EX-date.
2. The Record Date
3. The Payment Date.

The EX-date is always one business day before the Record Date.
To qualify to get the dividend payment, you need to own or buy the stock one business day before the EX-date, as you need to be the official owner of the shares as of the Record Date.

For example. If the EX-date for the upcoming dividend payment is March 13th. The Record Date would be one day later which is March 14th. You would need to buy the shares on March 12th to qualify to receive the next dividend.

The Reason?
When you buy a stock is takes 2 business days for the settlement between the broker and the individual to be finalized. That’s why you need to buy the stock on March the 12th, which is two days before the record date March 14th.

Confused? Keep It Simple.
To ensure you qualify for the Dividend Payment
Always purchase the Dividend Stock at least 2 days before the Record Date indicated in your Brokerage Account.

Last but not least, the best day of all - The payment date is exactly what it says, its the day you get your money.

Thanks for watching!
In the next video of this Beginner's Guide, we will discuss Different Types of Dividend Stocks.
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Additional Details
Dividend definition: https://www.investopedia.com/terms/d/dividend.asp

Dividend income vs capital gain income: https://www.investopedia.com/ask/answers/033015/there-difference-between-capital-gains-and-dividend-income.asp

Dividend tax implications (Canada): https://www.investopedia.com/terms/d/dividendtaxcredit.asp

Видео 2- HOW TO INVEST IN STOCKS | BEGINNER'S STEP BY STEP INVESTING GUIDE | INVESTING IN DIVIDENDS канала Passive Income Investing