Wednesday, November 19, 2008

Mr.Dividend, The Third Earner

It really is a luxury for my wife and I to have a third income earner in our household. This constant cash earner may not bring in a lot of money now but I think he has great potential to grow his earnings going forward.

This third partner in our family income is non other than our non-registered investment portfolio, let's call him "Mr.Dividend". Because Canadian dividends are tax advantaged, and regular employment income comes with a lot of baggage like taxes, pension fund contributions, and employment insurance deductions, Mr.Dividend's income is purer than mine or my wife's income. Mr.Dividend's take home pay currently is probably about $2,500 on gross earnings of around $3,000. In order for my wife or I to make an equivalent net amount we would have to pull in about $4,000 gross.

Here are some of the other characteristics of Mr.Dividend's income that I like:

  • Likely to grow at a much faster rate than our employment income
  • Mr.Dividend is lazy, and he really doesn't do anything
  • His income is very secure; impossible for Mr.Dividend to lose his job
  • I could potentially grow Mr.Dividend's income automatically every time he gets paid by setting up Dividend Re-investment Plans
  • Mr.Dividend earns money while he consumes none of our household resources, and he never complains.
A triple income family is always better than a dual income family. Why not make Mr.Dividend part of your financial future.

This article was written by the moneygardener. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

1 comment:

  1. MG:
    This analogy of dividends to third earning source is an excellent way to look at it. The points you mentioned are absolutely true.


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