A dividend is a share of the profits paid by a company to its shareholders. A company can choose to pay dividends monthly, quarterly, twice a year or annually. South African dividend paying stocks often pay dividends twice a year (an interim and a final dividend).
Many US dividend paying stocks pay dividends quarterly. ETFs usually pay dividends quarterly or twice a year although some US ETFs pay monthly and others annually. Just remember that dividends are not guaranteed…
Some medical scheme options are quite complex, options within the same medical scheme may have different rules and different benefit structures across medical schemes make it difficult compare the many options on offer.
Having said that I do want to address the issue of the Medical Savings Account (MSA) clawback in light of mid-year contribution increases and mid-year option changes.
I do not work for a medical scheme or administrator. I have no affiliation to any medical scheme.
Medical aid, Medical aid scheme and Medical scheme all mean the same thing. These terms are used interchangeably in the industry.
Medical scheme plan and Medical scheme option mean the same thing. Plan and Option are used interchangeably in the industry.
Simply put, compounding is the growth of your savings.
This growth is the interest earned on the amount saved; each month you earn interest on the initial amount plus the interest already earned (your money increases over time with very little action required from you).
Compounding in action:
Let's say I save R1200 on 1 Jan, the bank offers me an interest rate of 6% per annum. A simple interest calculation tells me that I will have R1272 at the end of the year. But come 31 Dec I will actually have R1274.01 🥳🥳