Roaming Returns

008 - How Ex-Dividend Dates Affect Stock Price And When You Get Paid

• Tim & Carmela • Episode 8

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The ex-dividend date is important when it comes to dividend investing. It tells you if you're eligible for the next dividend payout or if you have to wait until the next cycle. 

Waiting could mean a month or a year depending on the frequency of the company's payouts. That's why we prefer monthly payers. Monthly payouts also compound faster.

The main thing you need to know about the ex-dividend date is that it can affect a stock's price. And since price determines how many shares you can buy with your money, it's a good thing to be aware of. 

Drop your comments or questions for this episode on one of our posts.    


Use this calculator to see the difference in value if you get dividend payouts monthly versus quarterly. It does make a difference and it gets bigger the longer your time frame.

If you're looking for a quick summary on ex-dividends, click here. This includes a screen shot of how to find an ex-dividend date.

For anyone who's interested in our sideline comments about plasma donation, the informative documentary is here.  


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**DISCLAIMER**
Ticker metrics change as markets and companies change, so always do your own research. The content in this podcast is based on personal experience and is for educational purposes, not financial advice. See full disclaimer here.

Episode music was created using Loudly.

Welcome to Roaming Returns a podcast about generating passive income through investing, so that you don't have to wait to retirement to live your passion. 

In today's episode, Tim Carmela give you the details on ex dividends. Since we talk about it all the time, ut we don't really tell you what it is. Our bad. We'll fix that right now. Let's get rolling.

And we're back with a bonus episode all about ex dividends. We talk about it all the time, but it probably needs further clarification and explanation. 

Alright, so ex dividend. That means there's a date they're gonna pay their dividend. It'll be listed in the news of the stock if you're in like Vanguard or TD Ameritrade. Schwab actually has it listed on one of the boxes. But the best place the best place I know of to find ex dividend day is Yahoo Finance. 

You type in any ticker in Yahoo Finance, and the ex dividend is right there in the right column. It's like the middle of the right column. It just says it. 

The dividend process actually goes through three different dates if you read their company reports. So during the earnings I'll go through this if you want to actually read this stuff. I personally never look into this because it's Tim's whole bag.

It's boring. You don't want to read it. I'll just save you the trouble. So basically, in general, they have a declaration date. That means that's when they get their earnings.  

It will go something like, "Well, last quarter, we did this much money, blah, blah, blah, blah, blah" and then towards the end of it, "because of our excess capital or whatever, we're going to have a dividend offered on this day." 

That's their declaration date they declared on the date of their earnings that they're going to pay a dividend down the road at some point. 

And they declare the quantity of the dividend, correct? Yeah. Okay, so it'll be in the thing, and then they actually set their ex dividend date.

What they'll do is they'll say they're declaring that on the date down the road. If it's a monthly one. They'll give you three months time that it will be on this date, this date, and this date.  If it's a quarterly one, it'll be just the one time the one date, they'll say on that date, we're going to pay a dividend.

Well, someday they're gonna pay a dividend. It's the date that as long as you're holding the share before that date, you get paid the dividend on the next payout. 

Yes, but that's them saying we're going to pay a dividend on June 15. Okay, well, you need to hold the stock on June 14, or you have to be holding it before the ex dividend date is showing in Yahoo or whatever in your brokerage account, to be able to actually be eligible for the next coming dividend payout distribution. 

So if you do not, if you buy on the ex dividend date or after you actually don't get paid the next dividend you get paid the one after that, so you have to wait an entire cycle.

What you can do with monthly ones though. I discussed this a couple times because they're paid every month. If you miss it or you're like a day or two late, you're you're gonna have more chances. 

But on the ex dividend day, so they say on June 15 for paying the dividend so on the 15th the price is going to drop by whatever the dividend is. 

So yeah, we did talk about this before. But the really good ones to do this with is say there's a couple stocks that you really liked that pay once a year. 

Oh yeah, that would be prime to get it they because those once a year ones usually drop like $2, $3, $4, or $5. So it'll drop that much on the dividend date and you get it and you're getting that much of a discount, but you won't get your dividend for a full 365 days. 

But if it's a company that continues to raise their dividend over time, and you're doing the drip and just reinvesting then that can behoove you. 

So that's a good strategy to think about if you really like a company that I I probably haven't mentioned because I don't do annual dividends.

I did it one time, it was a Indian one. And I was like okay, well it pays 20% And it pays once. It pays it once a year and what happened the whole week leading up to the dividend is the price just kept going down and down and down and down and then so you got that was good. You got the dividend, which was I think $3 or something like that. So you got a lot more shares because the price went down the whole week prior to it. But then the day of the dividend thing went down another $3 So it was down like $8 or $9 within like seven days. 

Do they normally go slow when they recorrect? Like how does that work? It's a significant drop. The dividend date the price will drop the amount of the dividend and like some companies will go back up within a week. Other may take a month. It's not like it doesn't go back up like two or three days later.

Looking at one, look back at the history to see how it's performed based on whether it's monthly, whether it's quarterly, whether it's bi annually or whatever. So you can see how they act to help inform you of your timing of when you're purchasing. 

The record date is the pay day. Yeah, I was gonna say the third, the third definition that goes in sync with dividend ex dividend dates or whatever is the record date. And that's the date that they review their records to determine who are shareholders and anybody that's listed. They're the ones that get the payout. 

You don't really need to worry about the declaration date or the record date you really like ex dividend is really the one that matters but if you're talking to somebody and I guess you want to sound smart, there's another one. 

I actually have a link to the blog post that we wrote about this. You can just go in and it's probably easier to consume through that versus listening. And then I tend to assume that their monthly payouts, and I'm always wrong, because I'm like, oh, wait, this one screwed up. I know Tim absolutely prefers the monthlies.

I like the monthlies better and then the reason why is not because they pay more not because I mean, because they're way more volatile than the quarterly and semiannual and annual and like the prices all over the freaking place. 

But I just like having my reinvesting every month. And if you're looking for passive income that's coming in on a monthly basis, the monthly payouts make a lot of sense.

And I read somewhere I forget where and I did the math to just verify that what I was reading was accurate and it did turn out to be accurate. If you have 12 payments for the same like So say we had stock a they paid $1 For per year he had stock B they paid $1 per year at stock at that 12 times and stock beaten at four times Stock A is going to be worth like 10% More within like five years just because it broke down the payments into smaller increments over the over the year the same amount broken up.

Literally the principle of compounding one on one like you can look up compounding calculators all over the place. I'll put a link to the one that I
like dividends that are paid monthly for that reason cuz I'm getting more bang for my buck. And I'm getting more money.
Yeah, you're getting more free money through the compounding.
I'm greedy. Greedy,
I would call that just smart and efficient. I have you put
away I'm greeting you're like can I have some as a no. Call mine. Ironically enough, I don't own Chipotle stock I probably should. Or I should have them sponsor me. Oh, what
if they have one of the new things that we're looking at? A new ETF with it?
I probably would buy them.
Oh yeah. Well hold out for that one.
How to sponsor our show. That'd be cool.
You know, somebody that works at Chipotle and they want to sponsor a podcast, reach out let us I
would totally eat my Chipotle on air every day, every day of the hobo second I'm eating Chipotle.
He eats it probably like I think he'd eat it every day, if you could.
Well, what we're doing what we're currently doing is we currently have a budget thing going on so I had to cut back onto polio. I'm not happy about it.
Well, we'll talk about that in another episode because that was kind of freaking hilarious, actually, where we were really good about paying attention to it and then we kind of like got into the rut of bullshitter and then now I've I've personally noticed some creeping happens, especially with his Chipotle habits. And then this morning, I just found out that he was like making video game purchases. I'm like, what, that was a little frickin ones that add up everywhere.
I didn't keep a track of our budget so that we can watch him he has a gambling problem where you can make a great episode in the article about that about how much money we can save but just by cutting out nonsense stuff. I just want
to show you guys like if you get intentional and you pay attention, like you really don't know what the heck is going on unless you are paying attention. It's not necessarily saying you have to cut things out.
I contend that if I eat Chipotle seven days a week, I didn't go to the grocery store. I save money
if we can figure out how to budget it in so that that's an actual thing. And it makes sense. I'm 100% behind that because
12 times seven is when it's at $4 and we spend more than that at the grocery store but then you get no food.
I know that I'd have to fast the entire month and die. So maybe we could do it for like, a couple days a week. I'm trying to figure out what I'm sure we can do me
me me, me, me, me, me, me. Oh my god. Tim always does. You have questions about XML, today's email. I mean, it's either very
simple, you can make it complicated by doing the whole like discount hopping. If you don't have a lot of cash to get started. That might mean
other people don't do this for Yeah, I fall
into that all the time, too. When I'm talking about my behavioral like science and stuff that I talked about, like I forget people don't know
Zika you dumb shits.
This is the best story ever. We were in Greece with that with my girlfriend and her husband and they weren't engaged. They were married at the time. This is okay. This is a complete side story. I hope you listen to this because it's absolutely ridiculous. So I somehow got asked to be a bridesmaid before that whole trip went down and I was dreading it the entire time because I am not the kind of person that has a lot of girlfriends, let alone like really proceed stuff like that. And I just don't I personally don't understand the whole marriage thing and expenses that people put into weddings. Like I would rather put that into investing personally because you're getting a one day thing and the thing is for everybody else, but really you and to me, it's like I don't know it doesn't make sense to me. So I'm here for you're freaking out because it's like I'm having bad feelings. This whole thing's going down. And we're on this trip in Greece. And I told my girlfriend all about the just negative fuels and all this stuff that was happening and during our hike up Mount Olympus. We got in the car on the way back and they're like, Are you guys happy for us? We just got engaged. And I was like, oh my god, Tim and I sat in the back and dead silence just for like, I don't know how to respond. You trap us in the car and told us this now. Oh my God, it was ridiculous for you. But on that same trip, I thought everybody knew what tzatziki was if they especially if you had planned to go on a two week vacation in Greece and we're the one restaurant in Greece and she's like, what's tzatziki and I was like I was so confused. I was just like, it's  tzatziki  she's like, No, but what is it? I'm like, really? Like you don't really go in there. It's  tzatziki  it's  tzatziki  so after that it had some walkie talkies and Dizzy became my code name was absolutely so basically
like, I sometimes forget other people don't know. Ex dividend dates and ROI and stuff like what
an ex dividend date.
It's busy, it's busy. That's that where that joke stems from a glorious trip to Greece that we paid for through plasma donations.
See, which we do not recommend because of the bad oh my god don't even get me started. Oh, no soapbox, no soapbox.
Those motherfuckers they give you like $40 and they sell your plasma for like 400
Oh man, there's a really really awesome documentary about that whole thing if you want to look into blood donation and that like you think you're doing a good thing. Look into what I think it's on I actually think is on YouTube.
Give me better being you'd better off being just someone's emergency contact me in case they need blood. Yeah, it's it's all good. I'll come in and give blood that point. It's really really screwed up or group of people like if you can if you're in Oh, whatever you can give blood to like all your friends and just say I'll give blood to them but don't donate blood because you're like they make so much money off of your pain and suffering.
So if anybody's into that whole realm, I really hope somebody goes and starts a better business that's actually not like thieving. I really feel like it's thieving and that's why the medications cost so much just because they're gouging those people who actually need like valid treatment. Yes, we
paid for a trip to Greece with plasma. Like going back. It's like one back so there's that and we didn't have to touch our investments or other capital. So there's always ways to pay for stuff. We'll get into that
in another episode. Just don't give blood. I'm gonna guess you kind of you're desperate but to be honest, I think Instacart is way easier. And it actually painful.
You can swing that as Oh, it's people are too lazy. To go to the store. But then there's also the same aspect that people can't go to the store. Well,
I thought about from the perspective if you have kids, I watch parents struggle with their younger kids in the
people who have like diseases and I can't like walk to the stores them
too but like if you look at it from the parent perspective, I would not want to go to the grocery store personally if I had kids in tow because it would make shopping so much more difficult. So to me the hours wasted trying to do that would actually be saved through a service like Instacart. So it I mean it makes sense that everybody has a different reason their
IPO is this week in case anyone invest in IPOs
they'd have to already pre pre internet What are you going around my head
and you can just put money towards it right now.
Oh, wow. Robin Hood allows some good so we should probably do an episode on Robin Hood. Because it's like a really, really unique brokerage thing.
Yeah, I guess. I don't really like it but they do have their perks and like you can do some crypto and you can do IPOs.
So that's good. Maybe that's just the IPO go to them.
Instacart is going IPO I think it's 26 to 28 hours and arms going IPO I think it's like $49 What's arm some robotic thing.
I'd be more interested in that.
We're both going going public this week. All
right. Well, we're not trying to make this one too long. So I think we're going to do another one on beta  tzatziki .
Episode completely on to the Greeks RBF
Greek Alright guys, we will see you in the next episode. Peace out. Peace out