🪙 How to actually get dividends

👋 Good morning. We are still in Stacking Season — and thank God for that. Here's something interesting about advertising: it takes the average person 7 exposures to an ad before it truly sticks. I think the same applies to learning. Repetition is how things actually click. On that note, I hope you continue to read this, learn, and actually do something with that knowledge.

This week: we spoke to a creator about her first brand deal, we have practical notes on how to earn dividends, and a savings hack worth bookmarking. Let’s get right into it.

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THE STACK

How Ugcwithronke got her first brand deal with 500 followers

Disbelief was the first thing Ugcwithronke felt when she received her first payment from content creation as an ambassador. She had applied with just 500 followers, an almost unthinkable number in a space where content creation is often measured by visibility and large audiences. Still, she got in.

Instead of immediate excitement, she sat with the shock of it. Something close to imposter syndrome settled in.

She couldn’t quite believe it was real, and even when the money came through, she didn’t touch it.

Eventually, that moment became confirmation that she could, in fact, scale within content creation. In this conversation, she walks through her first brand deal and what it has taught her about finances in the creator economy.

Take me back to that first brand deal. How did it come in, and at what point did it feel real to you?

I actually applied to be an ambassador, and I got in with fewer than 500 followers, which still blows my mind. Then I got paid.

Honestly, it didn’t feel real at all. I kept thinking, “What do you mean, me? Aderonke? This amount of money in my name?” The money literally sat there for days before I finally accepted it. That’s when it slowly started sinking in.

What was the very first thing you spent that money on, and why that specifically?

I was using a Redmi phone at the time, so I upgraded to an iPhone 12 because I knew I had to level up my content.

I also paid my school fees; it was my way of showing my parents that this was actually working and that they should believe in it too.

Was that purchase something you had always imagined making when you ‘made it', or was it a spontaneous, in-the-moment decision?

It felt unreal. I went from borrowing iPhones to create content to actually owning one. That moment was big for me. It wasn’t just spontaneous; it was necessary for where I was going.

Looking back, was that amount fair for what you made, and would you negotiate differently now?

Looking back, I wouldn’t say it was entirely fair, but at that stage, I was focused on building my foundation. Now, I know my worth better, and I’d definitely approach negotiations differently.

Do you think you spent that money wisely, or did you just need to feel something in that moment?

I believe I spent it wisely. I made decisions that would push me forward, both in my content and personally.

What’s your most valuable savings hack that has helped you?

From my very first payment, I already had the mindset that it wasn’t all mine to spend. A percentage always goes back into my work, some goes into savings, and the rest I can use.

That structure has really helped me stay consistent and grow.

BAG CHECK

What are dividends?

A week ago, Tope Adus shared a screenshot of his dividend earnings, about ₦6,879,600 from Guaranty Trust Holding Company (GTCO). Immediately, the timeline fired up with questions about where to put money, what stocks to buy, and what dividends even are, kept flying left and right.

The question “what are dividends?'' kept coming up, showing that many people still don’t understand it, so how will they know where to invest?

It is for this reason that we enlisted your personal finance girl, Oluchukwu Chiadika, who breaks it down practically, from what dividends really mean to how you can start earning them yourself.

At the most basic level, what exactly is a dividend, and how does it differ from simply making money from selling a stock?

A dividend is essentially a company sharing part of the profit it has made with you because you own its shares. When you buy a stock, you become a part-owner—a shareholder. So when that company makes money, it can decide to distribute some of that profit to people who own it.

That’s what a dividend is: income you earn just for being a shareholder.

It’s different from selling a stock because, in that case, you’re giving up your ownership. With dividends, you’re not selling anything—you still own your shares, but you’re earning from them. So it’s a form of passive income tied to ownership, not exit.

How do companies decide when to pay dividends and how much to pay? Is there a formula, or is it discretionary?

There’s no strict formula. Dividend decisions are mostly strategic and discretionary.

That said, companies usually consider a few key things: how much profit they made, what their future plans are—like expansion or major projects—and whether they have a history of consistent dividend payments.

Some companies pay dividends every year, while others may skip years depending on their priorities.

The closest thing to a “formula” is something like a payout ratio, where a company decides to distribute a percentage of its profits, say 20% or 40%, to shareholders. But even that is a choice, not a rule.

If someone in Nigeria wants to start earning dividends, what are the actual steps from opening an account to choosing dividend-paying stocks?

The process is actually quite straightforward. First, you need to sign up on an investment platform. There are many fintech apps and brokerages available to Nigerians that give access to stocks and ETFs.

Next, complete your KYC (Know Your Customer) process. That usually involves verifying your identity with details like your BVN, NIN, and basic personal information. After that, you fund your account because you’ll need money to buy stocks.

Then comes the important part: choosing dividend-paying stocks. You want to look for companies that have a strong history of paying dividends, are profitable, and have been stable over time. In Nigeria, banks are a common example, as well as large, mature companies like telecoms.

Another key thing is timing.

You need to buy the stock before the qualification date (also known as the record date). That’s the cutoff point that determines who is eligible to receive the dividend. If you buy after that date, you won’t qualify for that payout cycle.

Once you’ve done that, you simply wait, and when the company pays out dividends, you receive your share.

That viral story of someone earning a large dividend payout—what would they likely have done differently compared to the average investor?

A lot of those payouts come down to capital first. Many of those people put in a lot of money. If a company is paying, say, ₦2 per share and you own 100,000 shares, that’s ₦200,000. If you own a million shares, that’s in the millions. People underestimate the power of volume.

Then there’s long-term accumulation. Not everyone can put in that kind of money at once, so what they do is build over time—buying consistently, staying through different market cycles. Next is stock selection. You have to pick companies that are growing and that pay consistently.

And then timing. You need to buy before the qualification date so you actually get the dividend. So it’s really a mix of more capital, consistency over time, good stock selection, and getting in at the right time.

What are the biggest misconceptions people have about dividends, especially the idea that it’s ‘easy passive income’?

People think you can easily make a lot of money from dividends, but that’s not realistic. You need serious capital—proper money—and years of consistency.

It’s not something you just live off immediately. You have to give it time and keep putting money in.

Another misconception is thinking that because a company pays good dividends, it automatically means it’s the best company or the most profitable.

That’s not always true. A company might pay well at a point in time, but it doesn’t mean it will keep growing or that it’s the best investment overall.

So you still have to pay attention to what you’re investing in, not just chase dividends.

#3 Saving hack (from a finance expert)

Use the 48-hour rule. Anytime you want to buy something that isn’t food, transport, or a real necessity, wait 48 hours before paying for it.