-1

This question already has an answer here:

All company shares payout very small amounts in dividends. What is the big interest for an investor to spend tens of thousands of dollars in stocks to possibly earn maybe $1,000 per year or so in dividends? I see no big advantage there. It comprises this one pitfall that I can't get around:

Big amounts of money needed to be invested up front or over time for very small returns over time.

As an investor who wants to earn money in the near future, what would the interest be for me to invest big amounts of money for returns that won't even count as profit until many years down the road?

Even assuming I do profit, how much is the question, and will it be worth it for me to spend lots of my money to wait far down the line in life to get menial returns?

That doesn't sound appealing to me as an investor, because how does that help my "current life?"

I'm not looking for retirement -- I'm looking for money in my younger years with investing and I can't get my head around why I should invest so much money when the return is always small and slow.

No, I don't plan to get rich overnight. I also don't plan to count pennies of profit when I'm 50 either.

marked as duplicate by user32479, Dheer, JoeTaxpayer May 3 '16 at 1:22

This question has been asked before and already has an answer. If those answers do not fully address your question, please ask a new question.

  • 1
    Please help us understand your question. Are you wondering about the purpose of investing in stocks at all? Or are you trying to compare stocks that pay dividends vs. those that don't? – Ben Miller May 2 '16 at 21:53
  • 1
    All companies do not pay a regular dividend. – quid May 2 '16 at 22:06
  • Do you plan on selling shares as the only way you'll profit from holding stocks? Consider if that is really want you'd want along with no splits as that would be a dividend you do realize, right? – JB King May 2 '16 at 23:08
4

A dividend is one method of returning value to shareholders, some companies pay richer dividends than others; some companies don't typically pay a dividend. Understand that shareholders are owners of a company. When you buy a stock you now own a portion (albeit an extremely small portion) of that company.

It is up to you to determine whether holding stock in a company is worth the risk inherent to equity investing over simply holding treasury notes or some other comparable no risk investment like bank savings or CDs.

Investing isn't really intended to change your current life. A common phrase is "investing in tomorrow." It's about holding on to money so you'll have it for tomorrow. It's about putting your money to work for you today, so you'll have it tomorrow. It's all about the future, not your current life.

  • 3
    Interest from a bank account doesn't change your life immediately either. But it's better than not getting anything, and due to compounding it makes moires difference the longer you can let it work. The way you get significant "money in your younger years" is to work for it, I'm afraid; anything else which might pay a large amount quickly is at high risk of losing money quickly. – keshlam May 2 '16 at 23:37
0

As mentioned, dividends are a way of returning value to shareholders. It is a conduit of profit as companies don't legitimately control upward appreciation in their share prices.

If you can't wrap your head around the risk to the reward, then this simply means you partially fit the description for a greater investment risk profile, so you need to put down Warren Buffett's books and Rich Dad Poor Dad and get an investment book that fits your risk profile.

Not the answer you're looking for? Browse other questions tagged .