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.
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