Teaching my kids – Part 10: 3 Important dates for dividend investors

I will be writing some posts to try to educate my kids. I know they are still very young (5 and 7) but it is never too early to start. And they can read these blog posts later on in life 😉 (This is probably the case, because they don’t speak or read English very well at this moment – You got to love an understatement!).

This is another blog post to keep the “snowball of knowledge” rolling.

I think when you educate kids about money, they will benefit from it for the rest of their lives. Or as the saying goes: “What is learned in the cradle is carried to the tomb”. And to educate your kid is your responsibility as a parent.

This blog post is a post for my kids when they are a little bit older. I did not talk to my kids about this subject (yet).

In Part 8 I told and hopefully taught my kids the basic about dividend investing. In investing, and especially in Dividend investing you have to know a few but very important dates. There are 3 very important dates, which you must know on every stock you own or want to own.

Because if you buy a stock before or after a specific date, it can make a huge difference. It is possible that you miss out on the dividend because you bought to late. Therefor here are the three important dates:

Dividend declaration date
The date of declaration is when the board of directors of a company announces their intention to pay dividend. Normally this is done through a press release. These can be found on the company’s website and on all major news and financial websites (e.g. on Yahoo Finance or Google Finance).

Besides the height of the dividend, it also announces the date of record and date of payment. So keep an eye open for these kinds of press releases or look up these dates on the Internet.

Ex-dividend date or record date
The ex-dividend date is a very important one. If you own the stock before this date you are entitled to the dividend. On this date the stock price normally declines because the stock trades without the right to the dividend and the value of the company decreases because the dividend no longer belongs to the company.

When you buy a stock on the ex-dividend date you are not getting any of the good stuff. No dividend for you this time.

The record date is two days after the ex-dividend date. On this day you should be on the record (at the company) as a shareholder. The company keeps a record of all their shareholders. Your stockbroker takes care of this. So no worries, you can forget about this date.

Payment date
This is the big day. This is the day the company pays you the dividend and the cash will be on your account, ready to re-invest.

So here you have it, the three important dates to remember.

This is my tenth blog post about teaching my kids. I hope my kids at the age of say 18, have all the financial knowledge I’m having right now. This would be a huge advantage for them! And that’s why I started these blog post series.

Do you talk with your kids about investing? I like to hear from you.

And will you help me to get the “snowball of knowledge” rolling?



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