Saturday, January 5, 2008

Last To Be Paid or First To Be Paid? You Choose

Let's repeat the lesson:

If you are a shareholder in a company, if there is a profit, you are the LAST person to be paid, assuming there is money left over after all bills and other debts have been covered.

When you own investment real estate, you are the FIRST person to be paid.

Why repeat the lesson? This week several analysts reported that banks will be forced to slash dividends in 2008. Many bank shareholders use these dividends as income. In fact, numerous companies are feeling a pinch on the revenue front these day.

So which makes more sense? Be last in line to be paid, or first in line? Which would you choose?

Thus endeth the lesson.

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