{"id":1242,"date":"2021-08-11T15:00:00","date_gmt":"2021-08-11T15:00:00","guid":{"rendered":"https:\/\/moneymade.wpenginepowered.com\/?p=1242"},"modified":"2025-06-03T19:09:31","modified_gmt":"2025-06-03T19:09:31","slug":"dividends-explained","status":"publish","type":"post","link":"https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/","title":{"rendered":"Dividends Explained: The Most Passive Form of Income There Is"},"content":{"rendered":"\n<p><strong>Here&#8217;s why Coca-Cola wants to cut you a paycheck even though you&#8217;re not on their payroll<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2025\/05\/Money_Made_Dividends_Main_011bbb4009.png\" alt=\"Dividends Explained: The Most Passive Form of Income There Is\"\/><\/figure>\n\n\n\n<p>Partying in your crib, sipping Cristal, and sleeping in&#8230;only to wake up to a notification that Coca-Cola just paid you $100 again to thank you for being a stockholder. No work, all play\u2014and pay. Can the dream really exist?<\/p>\n\n\n\n<p>Some of the richest people in the world are making millions if not billions in passive income from dividends. Shark Tank&#8217;s Mr. Wonderful, Kevin O&#8217;Leary, can often be found waxing poetic about his love for these stock market cash cows.<\/p>\n\n\n\n<p>While it might take a while to build up billions, working your way up to a steady monthly dividend check is easier than you&#8217;d think. If you invested just $150 per biweekly paycheck in popular dividend stock Johnson &amp; Johnson, for example, you&#8217;d be earning $100 per month in passive income off that one stock in under eight years.<\/p>\n\n\n\n<p>So, what are dividends? How do they work, and can you really live off of them if you&#8217;re not rolling in millions to start? Let\u2019s find out.<\/p>\n\n\n\n<h2 id='hold-up-what-are-dividends' class=\"wp-block-heading\" id=\"h-hold-up-what-are-dividends\">Hold up: What are dividends?<\/h2>\n\n\n\n<p>You might already know the basics of playing the stock market: you buy them when the price is low, wait for them to go up in value, and sell them at a higher price. Those profits are called &#8220;capital gains,&#8221; and it&#8217;s what most people think of when they think about making money off stocks.<\/p>\n\n\n\n<p>Dividends are another way to make money off the stock market. Some companies choose to use a portion of their profits to make regular payments to shareholders as a sort of reward for holding onto their stock. It&#8217;s kind of like the way American Express might reward you with some cash back for spending money on one of their credit cards. These payments are normally made on a monthly, quarterly or yearly basis, although some dividends are given as one-off payments too.<\/p>\n\n\n\n<h2 id='do-all-companies-pay-dividends' class=\"wp-block-heading\" id=\"h-do-all-companies-pay-dividends\">Do all companies pay dividends?<\/h2>\n\n\n\n<p>Not all companies offer dividends to investors. Dividends are mainly given by large, profitable companies that don\u2019t need to use as much of their profits to reinvest back into their business. You can choose to reinvest your dividends automatically or cash them out as passive income.<\/p>\n\n\n\n<p>There are also opportunities to earn dividends outside of the stock market. Real estate investment platforms tend to offer monthly, quarterly, or annual payouts since real estate is an income-generating asset. For example, <a href=\"https:\/\/moneymade.io\/discover\/crowdstreet\">CrowdStreet<\/a> pays certain investors a portion of the profits earned on their properties, and you earn that in addition to any increase in value of the property.<\/p>\n\n\n\n<h2 id='are-dividends-really-money-for-nothing' class=\"wp-block-heading\" id=\"h-are-dividends-really-money-for-nothing\">Are dividends really money for nothing?<\/h2>\n\n\n\n<p>You don\u2019t need to be a hustler to earn money with dividends. Instead of spending 80 hours a week pranking innocent bystanders in hopes of becoming the next Jake and Logan Paul, you can set up automatic deposits into your favorite dividend stocks and let your money do all the hard work for you.<\/p>\n\n\n\n<p>As one of the most passive forms of income, you\u2019re essentially receiving money just for investing in stocks\u2014and it&#8217;s extra money on top of what you\u2019re already holding as investments. The checks will be small at first, but if you contribute money to your investments regularly and reinvest your dividends, you&#8217;ll see them grow pretty quickly.<\/p>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"h-an-extra-slice-of-the-pie-how-dividends-work\">An extra slice of the pie: How dividends work<\/h5>\n\n\n\n<p>When you invest in a company paying out dividends, you\u2019ll receive a payment for each share of a stock you own. To determine the dividends you\u2019ll be paid, you need to look at the dividend yield. Look up a stock, and if it pays dividends, you can see how much under &#8220;Div yield.&#8221; For example, you&#8217;ll see below that Coca-Cola&#8217;s current dividend yield is over 2%\u2014anything between 2% and 6% is generally considered good.<\/p>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:20%\"><\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:60%\"><div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"892\" height=\"632\" src=\"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2021\/08\/KO_Stock_2025.png\" alt=\"\" class=\"wp-image-1269\" srcset=\"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2021\/08\/KO_Stock_2025.png 892w, https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2021\/08\/KO_Stock_2025-300x213.png 300w, https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2021\/08\/KO_Stock_2025-768x544.png 768w, https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2021\/08\/KO_Stock_2025-363x257.png 363w, https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2021\/08\/KO_Stock_2025-240x170.png 240w\" sizes=\"auto, (max-width: 892px) 100vw, 892px\" \/><\/figure>\n<\/div><\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:20%\"><\/div>\n<\/div>\n\n\n\n<p class=\"has-text-align-center has-small-font-size\"><i>Coca-Cola Co (KO) as of May 15th, 2025<\/i><\/p>\n\n\n\n<p class=\"has-text-align-center has-small-font-size\"><i>Source: Google.com<\/i><\/p>\n\n\n\n<h2 id='getting-the-goods-the-best-ways-to-earn-dividends' class=\"wp-block-heading\" id=\"h-getting-the-goods-the-best-ways-to-earn-dividends\">Getting the goods: The best ways to earn dividends<\/h2>\n\n\n\n<p>The two main ways to earn dividends are through traditional stocks or through real estate investment trusts (REITs), which are kind of like stocks but for real estate. Here are a couple apps that make it easy.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-get-help-picking-the-best-dividend-stocks-for-you\">Get help picking the best dividend stocks for you<\/h4>\n\n\n\n<p>Investing apps make it easy to start buying stocks with very little money. A favorite among dividend-hunters, <a href=\"https:\/\/moneymade.io\/discover\/m1\">M1<\/a> is fee-free and lets you invest as little as $100. The app will help you create a balanced portfolio and set up recurring buys, and it automatically reinvests your dividends back into your stocks so you can grow your wealth quicker.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-earn-above-average-dividend-yields-with-real-estate\">Earn above-average dividend yields with real estate<\/h4>\n\n\n\n<p>While 3% is a great dividend yield for stocks, REITs (which are funds invested in real estate rather than public companies) often pay upwards of 5%. <a href=\"https:\/\/moneymade.io\/discover\/fundrise\">Fundrise<\/a> is an app that lets you invest in a REIT with just $10, and they pay monthly dividends that you can automatically reinvest or receive as a cash payment.<\/p>\n\n\n\n<h2 id='im-ready-to-be-a-billionaire-alreadywhen-can-i-retire-early-off-dividends' class=\"wp-block-heading\" id=\"h-i-m-ready-to-be-a-billionaire-already-when-can-i-retire-early-off-dividends\">I&#8217;m ready to be a billionaire already&#8230;when can I retire early off dividends?<\/h2>\n\n\n\n<p>Will dividends really make you rich? Before you start dreaming of buying your own Richard Branson island and checking in on your billions with a mai tai in hand, there are a few things to consider.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-dividends-are-a-long-game\">Dividends are a long game<\/h4>\n\n\n\n<p>Dividends are a great form of passive income. But if you really want to maximize your earning potential, you either need to be willing to regularly invest large amounts of cash or hold your investment portfolio for at least 20 years.<\/p>\n\n\n\n<p>This is particularly true because dividend-paying stocks don&#8217;t tend to be high-growth stocks, although they do offer consistent returns. Companies that aim to grow quickly are more likely to reinvest their profits than pay them out to shareholders.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-stocks-are-risky-business\">Stocks are risky business<\/h4>\n\n\n\n<p>In the short term, investing in stocks can be risky. Share value naturally fluctuates over time, meaning that your initial investment can fall if the stock price reduces. Plus, a high dividend yield isn\u2019t always a good indicator of a healthy business as the company may be giving out profits to investors rather than growing their business. However, holding stocks over a long period and diversifying your portfolio by adding several different kinds of stocks are a few ways to minimize your risk.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-dividend-income-is-taxable\">Dividend income is taxable<\/h4>\n\n\n\n<p>Dividends are taxed at varying rates depending on your income and the amount of dividends you receive. However, some people won\u2019t pay any dividend tax, particularly if you\u2019re on a low taxable income.<\/p>\n\n\n\n<p>While you may not be quitting your day job soon, dividend investing is a great way to start earning extra money that can be used as another stream of income or to grow your wealth faster. The earlier you start the better, even if you have only $10 to spare.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Here&#8217;s why Coca-Cola wants to cut you a paycheck even though you&#8217;re not on their payroll Partying in your crib, sipping Cristal, and sleeping in&#8230;only to wake up to a notification that Coca-Cola just paid you $100 again to thank you for being a stockholder. No work, all play\u2014and pay. Can the dream really exist? [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":1255,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":true,"footnotes":""},"categories":[3],"tags":[68,52,74,43],"post_authors":[85],"class_list":["post-1242","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","tag-general-investing","tag-passive-income","tag-passive-investing","tag-stocks"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.1 (Yoast SEO v25.2) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Dividends Explained: The Most Passive Form of Income There Is<\/title>\n<meta name=\"description\" content=\"Are dividends really free money? 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Learn what dividends are, how dividends work and how to earn passive income with dividends in our guide.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/","og_locale":"en_US","og_type":"article","og_title":"Dividends Explained: The Most Passive Form of Income There Is","og_description":"Are dividends really free money? Learn what dividends are, how dividends work and how to earn passive income with dividends in our guide.","og_url":"https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/","og_site_name":"MoneyMade","article_published_time":"2021-08-11T15:00:00+00:00","article_modified_time":"2025-06-03T19:09:31+00:00","og_image":[{"width":1200,"height":800,"url":"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2025\/05\/Money_Made_Dividends_Main_011bbb4009.png","type":"image\/png"}],"twitter_card":"summary_large_image","twitter_misc":{"Written by":"nick@klaymedia.com","Est. reading time":"6 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/#article","isPartOf":{"@id":"https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/"},"author":{"name":"nick@klaymedia.com","@id":"https:\/\/moneymade.io\/learn\/#\/schema\/person\/8c0c0c37e0c31b81a77ea024f0085a4b"},"headline":"Dividends Explained: The Most Passive Form of Income There Is","datePublished":"2021-08-11T15:00:00+00:00","dateModified":"2025-06-03T19:09:31+00:00","mainEntityOfPage":{"@id":"https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/"},"wordCount":1154,"commentCount":0,"publisher":{"@id":"https:\/\/moneymade.io\/learn\/#organization"},"image":{"@id":"https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/#primaryimage"},"thumbnailUrl":"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2025\/05\/Money_Made_Dividends_Main_011bbb4009.png","keywords":["General Investing","Passive Income","Passive Investing","Stocks"],"articleSection":["Articles"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/","url":"https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/","name":"Dividends Explained: The Most Passive Form of Income There Is","isPartOf":{"@id":"https:\/\/moneymade.io\/learn\/#website"},"primaryImageOfPage":{"@id":"https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/#primaryimage"},"image":{"@id":"https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/#primaryimage"},"thumbnailUrl":"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2025\/05\/Money_Made_Dividends_Main_011bbb4009.png","datePublished":"2021-08-11T15:00:00+00:00","dateModified":"2025-06-03T19:09:31+00:00","description":"Are dividends really free money? Learn what dividends are, how dividends work and how to earn passive income with dividends in our guide.","breadcrumb":{"@id":"https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/#primaryimage","url":"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2025\/05\/Money_Made_Dividends_Main_011bbb4009.png","contentUrl":"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2025\/05\/Money_Made_Dividends_Main_011bbb4009.png","width":1200,"height":800},{"@type":"BreadcrumbList","@id":"https:\/\/moneymade.io\/learn\/articles\/dividends-explained\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/moneymade.io\/learn\/"},{"@type":"ListItem","position":2,"name":"Articles","item":"https:\/\/moneymade.io\/learn\/articles\/"},{"@type":"ListItem","position":3,"name":"Dividends Explained: The Most Passive Form of Income There Is"}]},{"@type":"WebSite","@id":"https:\/\/moneymade.io\/learn\/#website","url":"https:\/\/moneymade.io\/learn\/","name":"MoneyMade","description":"Make Money Moves That Matter.","publisher":{"@id":"https:\/\/moneymade.io\/learn\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/moneymade.io\/learn\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/moneymade.io\/learn\/#organization","name":"MoneyMade","url":"https:\/\/moneymade.io\/learn\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/moneymade.io\/learn\/#\/schema\/logo\/image\/","url":"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2025\/05\/Copy-of-MoneyMade-Icon-Default.svg","contentUrl":"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2025\/05\/Copy-of-MoneyMade-Icon-Default.svg","width":96,"height":96,"caption":"MoneyMade"},"image":{"@id":"https:\/\/moneymade.io\/learn\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/moneymade.io\/learn\/#\/schema\/person\/8c0c0c37e0c31b81a77ea024f0085a4b","name":"nick@klaymedia.com","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/moneymade.io\/learn\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/55886835a570cf0ebb443912af4176b642ef8a6a841026598d95ef9d3aaf08ac?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/55886835a570cf0ebb443912af4176b642ef8a6a841026598d95ef9d3aaf08ac?s=96&d=mm&r=g","caption":"nick@klaymedia.com"},"url":"https:\/\/moneymade.io\/learn\/author\/nickklaymedia-com\/"}]}},"fig_blocks":[{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p><strong>Here's why Coca-Cola wants to cut you a paycheck even though you're not on their payroll<\/strong><\/p>\n","innerContent":["\n<p><strong>Here's why Coca-Cola wants to cut you a paycheck even though you're not on their payroll<\/strong><\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/image","attrs":[],"innerBlocks":[],"innerHTML":"\n<figure class=\"wp-block-image\"><img src=\"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2025\/05\/Money_Made_Dividends_Main_011bbb4009.png\" alt=\"Dividends Explained: The Most Passive Form of Income There Is\"\/><\/figure>\n","innerContent":["\n<figure class=\"wp-block-image\"><img src=\"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2025\/05\/Money_Made_Dividends_Main_011bbb4009.png\" alt=\"Dividends Explained: The Most Passive Form of Income There Is\"\/><\/figure>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Partying in your crib, sipping Cristal, and sleeping in...only to wake up to a notification that Coca-Cola just paid you $100 again to thank you for being a stockholder. No work, all play\u2014and pay. Can the dream really exist?<\/p>\n","innerContent":["\n<p>Partying in your crib, sipping Cristal, and sleeping in...only to wake up to a notification that Coca-Cola just paid you $100 again to thank you for being a stockholder. No work, all play\u2014and pay. Can the dream really exist?<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Some of the richest people in the world are making millions if not billions in passive income from dividends. Shark Tank's Mr. Wonderful, Kevin O'Leary, can often be found waxing poetic about his love for these stock market cash cows.<\/p>\n","innerContent":["\n<p>Some of the richest people in the world are making millions if not billions in passive income from dividends. Shark Tank's Mr. Wonderful, Kevin O'Leary, can often be found waxing poetic about his love for these stock market cash cows.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>While it might take a while to build up billions, working your way up to a steady monthly dividend check is easier than you'd think. If you invested just $150 per biweekly paycheck in popular dividend stock Johnson &amp; Johnson, for example, you'd be earning $100 per month in passive income off that one stock in under eight years.<\/p>\n","innerContent":["\n<p>While it might take a while to build up billions, working your way up to a steady monthly dividend check is easier than you'd think. If you invested just $150 per biweekly paycheck in popular dividend stock Johnson &amp; Johnson, for example, you'd be earning $100 per month in passive income off that one stock in under eight years.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>So, what are dividends? How do they work, and can you really live off of them if you're not rolling in millions to start? Let\u2019s find out.<\/p>\n","innerContent":["\n<p>So, what are dividends? How do they work, and can you really live off of them if you're not rolling in millions to start? Let\u2019s find out.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":[],"innerBlocks":[],"innerHTML":"\n<h2 class=\"wp-block-heading\" id=\"h-hold-up-what-are-dividends\">Hold up: What are dividends?<\/h2>\n","innerContent":["\n<h2 class=\"wp-block-heading\" id=\"h-hold-up-what-are-dividends\">Hold up: What are dividends?<\/h2>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>You might already know the basics of playing the stock market: you buy them when the price is low, wait for them to go up in value, and sell them at a higher price. Those profits are called \"capital gains,\" and it's what most people think of when they think about making money off stocks.<\/p>\n","innerContent":["\n<p>You might already know the basics of playing the stock market: you buy them when the price is low, wait for them to go up in value, and sell them at a higher price. Those profits are called \"capital gains,\" and it's what most people think of when they think about making money off stocks.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Dividends are another way to make money off the stock market. Some companies choose to use a portion of their profits to make regular payments to shareholders as a sort of reward for holding onto their stock. It's kind of like the way American Express might reward you with some cash back for spending money on one of their credit cards. These payments are normally made on a monthly, quarterly or yearly basis, although some dividends are given as one-off payments too.<\/p>\n","innerContent":["\n<p>Dividends are another way to make money off the stock market. Some companies choose to use a portion of their profits to make regular payments to shareholders as a sort of reward for holding onto their stock. It's kind of like the way American Express might reward you with some cash back for spending money on one of their credit cards. These payments are normally made on a monthly, quarterly or yearly basis, although some dividends are given as one-off payments too.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":[],"innerBlocks":[],"innerHTML":"\n<h2 class=\"wp-block-heading\" id=\"h-do-all-companies-pay-dividends\">Do all companies pay dividends?<\/h2>\n","innerContent":["\n<h2 class=\"wp-block-heading\" id=\"h-do-all-companies-pay-dividends\">Do all companies pay dividends?<\/h2>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Not all companies offer dividends to investors. Dividends are mainly given by large, profitable companies that don\u2019t need to use as much of their profits to reinvest back into their business. You can choose to reinvest your dividends automatically or cash them out as passive income.<\/p>\n","innerContent":["\n<p>Not all companies offer dividends to investors. Dividends are mainly given by large, profitable companies that don\u2019t need to use as much of their profits to reinvest back into their business. You can choose to reinvest your dividends automatically or cash them out as passive income.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>There are also opportunities to earn dividends outside of the stock market. Real estate investment platforms tend to offer monthly, quarterly, or annual payouts since real estate is an income-generating asset. For example, <a href=\"https:\/\/moneymade.io\/discover\/crowdstreet\">CrowdStreet<\/a> pays certain investors a portion of the profits earned on their properties, and you earn that in addition to any increase in value of the property.<\/p>\n","innerContent":["\n<p>There are also opportunities to earn dividends outside of the stock market. Real estate investment platforms tend to offer monthly, quarterly, or annual payouts since real estate is an income-generating asset. For example, <a href=\"https:\/\/moneymade.io\/discover\/crowdstreet\">CrowdStreet<\/a> pays certain investors a portion of the profits earned on their properties, and you earn that in addition to any increase in value of the property.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":[],"innerBlocks":[],"innerHTML":"\n<h2 class=\"wp-block-heading\" id=\"h-are-dividends-really-money-for-nothing\">Are dividends really money for nothing?<\/h2>\n","innerContent":["\n<h2 class=\"wp-block-heading\" id=\"h-are-dividends-really-money-for-nothing\">Are dividends really money for nothing?<\/h2>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>You don\u2019t need to be a hustler to earn money with dividends. Instead of spending 80 hours a week pranking innocent bystanders in hopes of becoming the next Jake and Logan Paul, you can set up automatic deposits into your favorite dividend stocks and let your money do all the hard work for you.<\/p>\n","innerContent":["\n<p>You don\u2019t need to be a hustler to earn money with dividends. Instead of spending 80 hours a week pranking innocent bystanders in hopes of becoming the next Jake and Logan Paul, you can set up automatic deposits into your favorite dividend stocks and let your money do all the hard work for you.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>As one of the most passive forms of income, you\u2019re essentially receiving money just for investing in stocks\u2014and it's extra money on top of what you\u2019re already holding as investments. The checks will be small at first, but if you contribute money to your investments regularly and reinvest your dividends, you'll see them grow pretty quickly.<\/p>\n","innerContent":["\n<p>As one of the most passive forms of income, you\u2019re essentially receiving money just for investing in stocks\u2014and it's extra money on top of what you\u2019re already holding as investments. The checks will be small at first, but if you contribute money to your investments regularly and reinvest your dividends, you'll see them grow pretty quickly.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":{"level":5},"innerBlocks":[],"innerHTML":"\n<h5 class=\"wp-block-heading\" id=\"h-an-extra-slice-of-the-pie-how-dividends-work\">An extra slice of the pie: How dividends work<\/h5>\n","innerContent":["\n<h5 class=\"wp-block-heading\" id=\"h-an-extra-slice-of-the-pie-how-dividends-work\">An extra slice of the pie: How dividends work<\/h5>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>When you invest in a company paying out dividends, you\u2019ll receive a payment for each share of a stock you own. To determine the dividends you\u2019ll be paid, you need to look at the dividend yield. Look up a stock, and if it pays dividends, you can see how much under \"Div yield.\" For example, you'll see below that Coca-Cola's current dividend yield is over 2%\u2014anything between 2% and 6% is generally considered good.<\/p>\n","innerContent":["\n<p>When you invest in a company paying out dividends, you\u2019ll receive a payment for each share of a stock you own. To determine the dividends you\u2019ll be paid, you need to look at the dividend yield. Look up a stock, and if it pays dividends, you can see how much under \"Div yield.\" For example, you'll see below that Coca-Cola's current dividend yield is over 2%\u2014anything between 2% and 6% is generally considered good.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/columns","attrs":[],"innerBlocks":[{"blockName":"core\/column","attrs":{"width":"20%"},"innerBlocks":[],"innerHTML":"\n<div class=\"wp-block-column\" style=\"flex-basis:20%\"><\/div>\n","innerContent":["\n<div class=\"wp-block-column\" style=\"flex-basis:20%\"><\/div>\n"]},{"blockName":"core\/column","attrs":{"width":"60%"},"innerBlocks":[{"blockName":"core\/image","attrs":{"id":1269,"sizeSlug":"full","linkDestination":"none","align":"center"},"innerBlocks":[],"innerHTML":"\n<figure class=\"wp-block-image aligncenter size-full\"><img src=\"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2021\/08\/KO_Stock_2025.png\" alt=\"\" class=\"wp-image-1269\"\/><\/figure>\n","innerContent":["\n<figure class=\"wp-block-image aligncenter size-full\"><img src=\"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2021\/08\/KO_Stock_2025.png\" alt=\"\" class=\"wp-image-1269\"\/><\/figure>\n"]}],"innerHTML":"\n<div class=\"wp-block-column\" style=\"flex-basis:60%\"><\/div>\n","innerContent":["\n<div class=\"wp-block-column\" style=\"flex-basis:60%\">",null,"<\/div>\n"]},{"blockName":"core\/column","attrs":{"width":"20%"},"innerBlocks":[],"innerHTML":"\n<div class=\"wp-block-column\" style=\"flex-basis:20%\"><\/div>\n","innerContent":["\n<div class=\"wp-block-column\" style=\"flex-basis:20%\"><\/div>\n"]}],"innerHTML":"\n<div class=\"wp-block-columns\">\n\n\n\n<\/div>\n","innerContent":["\n<div class=\"wp-block-columns\">",null,"\n\n",null,"\n\n",null,"<\/div>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":{"align":"center","fontSize":"small"},"innerBlocks":[],"innerHTML":"\n<p class=\"has-text-align-center has-small-font-size\"><i>Coca-Cola Co (KO) as of May 15th, 2025<\/i><\/p>\n","innerContent":["\n<p class=\"has-text-align-center has-small-font-size\"><i>Coca-Cola Co (KO) as of May 15th, 2025<\/i><\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":{"align":"center","fontSize":"small"},"innerBlocks":[],"innerHTML":"\n<p class=\"has-text-align-center has-small-font-size\"><i>Source: Google.com<\/i><\/p>\n","innerContent":["\n<p class=\"has-text-align-center has-small-font-size\"><i>Source: Google.com<\/i><\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":[],"innerBlocks":[],"innerHTML":"\n<h2 class=\"wp-block-heading\" id=\"h-getting-the-goods-the-best-ways-to-earn-dividends\">Getting the goods: The best ways to earn dividends<\/h2>\n","innerContent":["\n<h2 class=\"wp-block-heading\" id=\"h-getting-the-goods-the-best-ways-to-earn-dividends\">Getting the goods: The best ways to earn dividends<\/h2>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>The two main ways to earn dividends are through traditional stocks or through real estate investment trusts (REITs), which are kind of like stocks but for real estate. Here are a couple apps that make it easy.<\/p>\n","innerContent":["\n<p>The two main ways to earn dividends are through traditional stocks or through real estate investment trusts (REITs), which are kind of like stocks but for real estate. Here are a couple apps that make it easy.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":{"level":4},"innerBlocks":[],"innerHTML":"\n<h4 class=\"wp-block-heading\" id=\"h-get-help-picking-the-best-dividend-stocks-for-you\">Get help picking the best dividend stocks for you<\/h4>\n","innerContent":["\n<h4 class=\"wp-block-heading\" id=\"h-get-help-picking-the-best-dividend-stocks-for-you\">Get help picking the best dividend stocks for you<\/h4>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Investing apps make it easy to start buying stocks with very little money. A favorite among dividend-hunters, <a href=\"https:\/\/moneymade.io\/discover\/m1\">M1<\/a> is fee-free and lets you invest as little as $100. The app will help you create a balanced portfolio and set up recurring buys, and it automatically reinvests your dividends back into your stocks so you can grow your wealth quicker.<\/p>\n","innerContent":["\n<p>Investing apps make it easy to start buying stocks with very little money. A favorite among dividend-hunters, <a href=\"https:\/\/moneymade.io\/discover\/m1\">M1<\/a> is fee-free and lets you invest as little as $100. The app will help you create a balanced portfolio and set up recurring buys, and it automatically reinvests your dividends back into your stocks so you can grow your wealth quicker.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":{"level":4},"innerBlocks":[],"innerHTML":"\n<h4 class=\"wp-block-heading\" id=\"h-earn-above-average-dividend-yields-with-real-estate\">Earn above-average dividend yields with real estate<\/h4>\n","innerContent":["\n<h4 class=\"wp-block-heading\" id=\"h-earn-above-average-dividend-yields-with-real-estate\">Earn above-average dividend yields with real estate<\/h4>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>While 3% is a great dividend yield for stocks, REITs (which are funds invested in real estate rather than public companies) often pay upwards of 5%. <a href=\"https:\/\/moneymade.io\/discover\/fundrise\">Fundrise<\/a> is an app that lets you invest in a REIT with just $10, and they pay monthly dividends that you can automatically reinvest or receive as a cash payment.<\/p>\n","innerContent":["\n<p>While 3% is a great dividend yield for stocks, REITs (which are funds invested in real estate rather than public companies) often pay upwards of 5%. <a href=\"https:\/\/moneymade.io\/discover\/fundrise\">Fundrise<\/a> is an app that lets you invest in a REIT with just $10, and they pay monthly dividends that you can automatically reinvest or receive as a cash payment.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":[],"innerBlocks":[],"innerHTML":"\n<h2 class=\"wp-block-heading\" id=\"h-i-m-ready-to-be-a-billionaire-already-when-can-i-retire-early-off-dividends\">I'm ready to be a billionaire already...when can I retire early off dividends?<\/h2>\n","innerContent":["\n<h2 class=\"wp-block-heading\" id=\"h-i-m-ready-to-be-a-billionaire-already-when-can-i-retire-early-off-dividends\">I'm ready to be a billionaire already...when can I retire early off dividends?<\/h2>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Will dividends really make you rich? Before you start dreaming of buying your own Richard Branson island and checking in on your billions with a mai tai in hand, there are a few things to consider.<\/p>\n","innerContent":["\n<p>Will dividends really make you rich? Before you start dreaming of buying your own Richard Branson island and checking in on your billions with a mai tai in hand, there are a few things to consider.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":{"level":4},"innerBlocks":[],"innerHTML":"\n<h4 class=\"wp-block-heading\" id=\"h-dividends-are-a-long-game\">Dividends are a long game<\/h4>\n","innerContent":["\n<h4 class=\"wp-block-heading\" id=\"h-dividends-are-a-long-game\">Dividends are a long game<\/h4>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Dividends are a great form of passive income. But if you really want to maximize your earning potential, you either need to be willing to regularly invest large amounts of cash or hold your investment portfolio for at least 20 years.<\/p>\n","innerContent":["\n<p>Dividends are a great form of passive income. But if you really want to maximize your earning potential, you either need to be willing to regularly invest large amounts of cash or hold your investment portfolio for at least 20 years.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>This is particularly true because dividend-paying stocks don't tend to be high-growth stocks, although they do offer consistent returns. Companies that aim to grow quickly are more likely to reinvest their profits than pay them out to shareholders.<\/p>\n","innerContent":["\n<p>This is particularly true because dividend-paying stocks don't tend to be high-growth stocks, although they do offer consistent returns. Companies that aim to grow quickly are more likely to reinvest their profits than pay them out to shareholders.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":{"level":4},"innerBlocks":[],"innerHTML":"\n<h4 class=\"wp-block-heading\" id=\"h-stocks-are-risky-business\">Stocks are risky business<\/h4>\n","innerContent":["\n<h4 class=\"wp-block-heading\" id=\"h-stocks-are-risky-business\">Stocks are risky business<\/h4>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>In the short term, investing in stocks can be risky. Share value naturally fluctuates over time, meaning that your initial investment can fall if the stock price reduces. Plus, a high dividend yield isn\u2019t always a good indicator of a healthy business as the company may be giving out profits to investors rather than growing their business. However, holding stocks over a long period and diversifying your portfolio by adding several different kinds of stocks are a few ways to minimize your risk.<\/p>\n","innerContent":["\n<p>In the short term, investing in stocks can be risky. Share value naturally fluctuates over time, meaning that your initial investment can fall if the stock price reduces. Plus, a high dividend yield isn\u2019t always a good indicator of a healthy business as the company may be giving out profits to investors rather than growing their business. However, holding stocks over a long period and diversifying your portfolio by adding several different kinds of stocks are a few ways to minimize your risk.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":{"level":4},"innerBlocks":[],"innerHTML":"\n<h4 class=\"wp-block-heading\" id=\"h-dividend-income-is-taxable\">Dividend income is taxable<\/h4>\n","innerContent":["\n<h4 class=\"wp-block-heading\" id=\"h-dividend-income-is-taxable\">Dividend income is taxable<\/h4>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Dividends are taxed at varying rates depending on your income and the amount of dividends you receive. However, some people won\u2019t pay any dividend tax, particularly if you\u2019re on a low taxable income.<\/p>\n","innerContent":["\n<p>Dividends are taxed at varying rates depending on your income and the amount of dividends you receive. However, some people won\u2019t pay any dividend tax, particularly if you\u2019re on a low taxable income.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>While you may not be quitting your day job soon, dividend investing is a great way to start earning extra money that can be used as another stream of income or to grow your wealth faster. The earlier you start the better, even if you have only $10 to spare.<\/p>\n","innerContent":["\n<p>While you may not be quitting your day job soon, dividend investing is a great way to start earning extra money that can be used as another stream of income or to grow your wealth faster. The earlier you start the better, even if you have only $10 to spare.<\/p>\n"]}],"_links":{"self":[{"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/posts\/1242","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/comments?post=1242"}],"version-history":[{"count":0,"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/posts\/1242\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/media\/1255"}],"wp:attachment":[{"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/media?parent=1242"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/categories?post=1242"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/tags?post=1242"},{"taxonomy":"post_authors","embeddable":true,"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/post_authors?post=1242"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}