Passive income ideas

You could be wondering hence ask yourself, why passive income idea? There’s only one answer to this...earn more, work less. You only get to do this when you invest in activities that earn you passive income resulting to personal and financial freedom which am sure given a chance, you would grab. I mean…who would like to work for long hours for the rest of their lives? And who would like to be supervised throughout for the rest of their lives? This is where the passive income idea comes in.

Why you Should be a Shareholder

Being a shareholder comes with a lot of benefits and normally shareholders are entitled to some rights such as receiving dividend payments and dividend reinvestment plans. The dividends one gets come in handy hence enable you do some things such as payment of mortgages, utility bills just to mention a few.

The amount of dividends you get depends on the amount shares you have hence the more shares you have the more dividends you are entitled to. Normally these dividends are calculated in terms of the dollar amount entitled to each share and also in terms of the proportionate of the current market price which is referred to as dividend yield.

Dividends are not necessarily money hence they could also be property or stock. Depending on a company, one could decide to acquire a loan instead of getting dividends.

There are several terms associated with dividends:

· Gross Dividends-this refers to the total amount of dividends one gets to receive.

· Ex-dividend- this term is used when a seller is entitled to a given dividend rather than the buyer.

· Dividend Rollover Plan-this is an approach in which stock that earns dividends is bought just before the ex-dividend date. This entitles the buyer to the dividend.

· Dividend Exclusion- this is a policy that gives companies a go ahead to deduct dividends received from income for tax purposes.

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