One of the most traditional advantages of owning shares has been dividends.
So what are dividends? They are payments made by a organization from its earnings back to its investors, by means of cash or additional allotments of shares. Most Australia businesses who pay dividends do so either annually or six-monthly.
Dividends can also be released with franking attributes, which are tax attributes that have been paid out by the organization on your behalf.
So if you get a payment that is completely franked, you may not have to pay any individual earnings tax on the money obtained, as tax has already been compensated.
There is always the obvious danger when investing in shares that prices will fall, but with dividend shares you expose yourself to less risk, especially when investing in the blue chip companies.
In the coming week I will put forward some great dividend shares to look at and also give you a bit more info on how to best utilise them.
JH
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