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Dividend Aristocrats

I want a Pay Cheque without having to work!

Isn’t this the dream? At the end of the day, this is like achieving financial independence without a trust fund or a wealthy family. Retirement is basically achieving that goal but I want to achieve that much earlier. My ‘findependence‘ goal is to be financially free of obligations by age 45 and hopefully, I can earn quite a bit of income by that time. Related: Financial Freedom At 45 (Check out my progress!) Is it possible? Yes, many have done it and are doing it. You need realistically define your needs and reign in your want to what makes sense. You need to control your spending and manage them. There are fixed spending and there are variable spending. If you put a budget together, you can quickly assess what is required and what is unnecessary spending. I put a spreadsheet together to let you assess your financial budget and assess what your fixed spending is and what is not. Related: How To Define Your Retirement Cost A tip about budgetting … you don’t ...
Interest Rates

Understanding Interest Rates

Dealing with interest rates is something we all have to do at some point in our life. In fact, if you purchase a residence, chances are you took a mortgage which is subject to interest rates. The question you will have to answer is if you take a variable rate, a 3 year fixed term, a 5 year fixed or a much longer term. The interest rate and your appetite for handling fluctuating interest rates will affect your choice along with your financial stability. Related: Mortgage Strategies What is Interest? Interest is the cost of borrowing money. When the bank pays you interest, it’s because it borrows money from you and when you borrow money from a financial institution you have to pay interest. The concept of interest has been around for a long time in one form or another. It’s the cost of getting access to money. What Affect Interest Rates? Economist could probably discuss this topic for hours but we’ll keep it short. There are a number of circumstances that can affect interest ...
Dividend Tax

Investing Income Tax – Understanding Dividend Tax

Every year, like clock work, we all have to do our taxes. For many like me, we have to report our dividends and pay our taxes on this amazing passive income. The great thing about dividends is that it’s a passive income and it has a preferred tax rate compared to interest or regular income. Only capital gains has a better tax rate but you have to sell your investments to access your money. (Note that the amount of tax you pay really depends on all your income.) Related: Capital Gains Income Tax For the most part, my investments are mostly tax sheltered but I do have some money in a non-registered account through RBC Direct Investing, Computershare and CanStock Transfer Agent. For the most part, I receive a T5 forms for all the shares in my name and those in my kids’ name (held in trust). Understanding Dividend Tax Let me be clear on a few points before we go over the math. There are a number of rules against different dividends and distributions. Canadian Dividend Tax Dividends ...
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