Dividends = Pride of Ownership

23 Nov 2013 16:05

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While I love the steady and rising passive income from dividends it is not my favorite aspect of dividend investing. What I enjoy most is that being able to receive a dividend validates me as both an investor and business owner.

When I was in High School it was mandatory to take a basic financial class. The class focused primarily on income, debt, and budgeting. Near the end of the class we were introduced to the different saving/investments available and one of those instruments were common shares of stock. Though we were not taught how to analyze a stock we were given the basic definition that it was an investment in exchange for a percentage of company ownership.

Dividend investing has reminded me of that basic definition I learned many decades ago. It validates my ability of understanding a company (both financially and business wise), making a sound investment, and feeling the pride that I am a part business owner in some of the biggest corporations. This is much different than trying to speculate if a stock price will rise or fall of which I was mediocre at.

Being an owner in a company I expect to financially share in a company’s success (as should any owner). Dividends are what meet my expectation of wealth sharing. Why more shareholders of companies do not share this view is really mystifying. If a friend or relative asks you to invest in their new business idea the first question you would ask is "What is in it for me?" If the answer is anything less than XX% of profits you would send them packing.

Investing via stocks is no different than investing in your friend or relatives business idea. Owning stock in a company that shares wealth makes you the ultimate silent partner in a business and as the business is more successful the more wealth is shared with you. How can you not love this?

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