Post by
gashole on Jan 03, 2021 3:58pm
How it works
I'm talking about dividends for those that really don't get it.... there is some personal information here but I don't mind disclosing it..... I am the President of a corporation that has shares there are three shareholders... Last year 2019 I took a salary as president of the company of $57,500 and I also took dividends from the company amounting to $225,000.. my wife is also a shareholder and she took $25,000 in dividends...... the other shareholder does not take anything from the corporation they are really not involved in the business and have no true ownership.... last year at the end of the year I ended up with an additional $150,000 in my business bank account after salary and dividends were paid... this year I took a salary of $57,500 the same as last year but I only took dividends $125,000 (100,000 less than last year) my wife also took the same amount $25,000 as she did last year.... .. but at the end of the year my sales were higher than last year but for all intents and purposes I ended up with $270,000 more in my business account than I did the prior-year..... if my sales and margins were exactly the same as the prior-year I would have be left with an extra $150,000 in my corporate account mainly due to the fact that I took $100,000 less in dividends... so you can see that because I took less dividends it kept more money in my corporate bank account.... FYI, it works the same for large companies as well when they do not pay out all their extra cash in dividends they keep the money in their bank account.... this then allows them more free cash to expand or pay down debt.... for me what it means is I can expand my business much more easily because I am not paying out all my corporate earnings in dividends every year and salaries...
Comment by
Mirko22 on Jan 03, 2021 5:13pm
BS. You have a failing business.,