Dividends with a catch

While early retirement may be a pipe dream for most of us, every once in a while I hear from readers who have pulled it off and are living almost tax-free on dividend income alone. An example is Torontonian Phil McKinley, who retired in his early 40s a couple of years ago and has been living on his non-registered dividend income tax-free.

While McKinley is reluctant to divulge his full financial situation, it’s consistent with a growing body of literature that reveals how it’s possible for Canadian investors to earn up to $50,000 a year in dividend income and pay almost no tax: provided they have no other sources of income. Read More…


  1. Yea i heard about this a few years back whereby you needed to not have a job to be eligible for something like this. But i think for most people, they don’t want to live frugally with a mere $50,000 per year to work with. Well, then, that’s just me i guess.

  2. This is very fascinating and very exciting. I never knew about such a thing. What i find most interesting is that it only applies to certain provinces at different levels. To no one’s surprise Ontario is the highest. I am just wondering if i shoudl switch Provinces to take better advantage of this. Does anyone know if it implies one take dividend income in the province one is living in when they do their taxes or at the time of the income being paid by the stock?

  3. In other words steve you are saying: the rich keep getting richer with no balance in the world to offset the inequality.

  4. But lets not forget that the only people who can take advantage of this are rich people who invested heavily enough to be able to expect such a return. For the average investor this is highly unlikely. Still good to know but an unlikely tool for the average person.

  5. Sounds like a genuine tax-loophole for Canadians.

  6. Wow, poor Newfoundland at $18K. And here i was figuring this $50K applied nationwide.

  7. The real question is what is in such a portfolio that would garner one to have such a high dividend income level?

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