What is a dividend, and why does profit come with risk?
Profit is what’s left over. A company can pay part of it out to its shareholders, and that’s called a dividend. Whether it does, and how much, isn’t set in advance. It can also put the money into the reserve. And every opportunity comes with a risk: you can make money with shares, and you can lose money. Anyone who only tells the first half isn’t telling the truth.
Good to know: we explain how things work in Germany, where the books are set. Rules and numbers can be different where you live.
How the guinea pigs explain it in Volume 6: Rocky Buys a Share
Does profit automatically mean money in your paw?
No. Profit is what’s left over. A company can pay out part of it to its shareholders, and that’s called a dividend. Whether it does, and how much, isn’t set in advance. It can also put the money into a reserve in case something breaks. For the guinea pigs, that’s the one euro in the jar.
What does spreading the risk mean?
Putting your money into several things instead of betting everything on one carrot. Mr. Grey’s line: Spreading distributes the risk. It doesn’t make it go away.
- Profit doesn’t automatically mean a dividend.
- Opportunity and risk always go together.
- Spreading distributes the risk. It doesn’t make it go away.
Dividende
dividend
In the books, every paragraph is in German with the English right below it. That way you pick up new words in both languages along the way.
Your turn: take the quiz
No account, no score, nothing gets saved. Just tap an answer.
1. What is a dividend?
2. What does Mr. Grey mean by “Don’t put all your carrots in one basket”?
3. What does Mr. Berger say about shares?
Volume 6: Rocky Buys a Share
What a share is, where a share price comes from and why being a co-owner doesn’t make you the boss. For kids ages 10 and up, bilingual German and English, 92 pages, illustrated in full color throughout.
