| Everyone would like to find an investment which | | | | You'd be surprised how much you can maximize |
| will continue growing even while they are collecting | | | | your investment by reinvesting dividends. After |
| dividends. Maybe it sounds like a pipe dream to | | | | you do so, you will be earning dividends on both |
| you, but in reality, you can find investments which | | | | the initial investment as well as the dividends you |
| will provide these benefits. Mutual funds that have | | | | reinvested. Over the long term, this can have a |
| dividends will give you a sound, dynamic | | | | huge impact on your earning potential. |
| investment as well as pay you an annual dividend. | | | | Keep Track of the Progress |
| If you're a savvy investor, this is something | | | | Even if you have a financial advisor managing |
| you're going to want to check into. | | | | your portfolio, it's still important for you to |
| The one drawback to earning dividends is that | | | | understand how your mutual funds are |
| they are taxable. After all, they are income. In the | | | | performing. This is the only way any investor can |
| United States, all dividends and interest earned | | | | know if he's doing well. It doesn't matter how |
| through investments in mutual funds are subject | | | | much you've got invested. You need to stay on |
| to income tax. While you can't avoid the laws, you | | | | top of the progress you are making. |
| can be glad that you will be making the extra | | | | More specifically, you need to keep track of how |
| money to pay taxes on. | | | | much return you're getting from your investment |
| Continued Growth | | | | in the form of dividends and interest. Legally, |
| The two main reasons people invest in mutual | | | | mutual fund companies have to send you |
| funds is to see their money grow while reaping a | | | | summaries of all of your transactions. When the |
| profit of dividends or interest. One way to make | | | | information arrives in the mail, take time to look it |
| your funds grow even faster is by reinvesting the | | | | over to see how much progress you've made |
| profits back into the fund. Most mutual funds will | | | | since the last statement. Hopefully you will see an |
| allow you to reinvest your dividends. All you need | | | | increase in the number of shares you own as well |
| to do is ask your financial advisor to arrange it for | | | | as in the profit you have earned. |
| you. | | | | |