Capital Gains vs. Dividends

by astanhaus


Babe, our boys and I had a couple’s brunch last weekend. Babe’s boy mentioned, he made $$ off of his stocks last week. She asked, “How, honey? By capital gains or dividends?”

(click on the bold-faced vocab word:))

He answered with an open-mouthed look of astonishment, pride and I-love-this-woman twinkle.

I chuckled/coughed, feeling somewhat responsible for his reply. I’ll soon be adding monetary matchmaker to my resume.

If you don’t know the look I’m talking about, here is what you need to know to get one from a stock-owner.

The two ways to make money from stocks:

1. Sell the stock at a higher price than the purchase price. This difference between the two prices is called capital gain.

2. Receive $$ from the company whose stock is owned. Companies (note: only some) share the wealth with their stockowners by paying regular dividends.

Good luck with the love life,