Understanding Dividends: How Canadians Can Earn While They Invest
I hope your week’s going well and you’re finding little ways to take care of your future self.
Lately, I’ve been thinking about what I wish I knew when I first started investing… the kind of advice that would’ve saved me time and stress, and allowed me to build wealth faster in my TFSA.
If I could give my 20-year-old self one piece of investing advice, it’d be this: Invest in a way that pays you back.
That’s the beauty of dividend investing, you can earn money just for holding certain stocks or ETFs.
P.S. If you’re more of a visual learner, I dropped a YouTube video breaking down how dividends work in Canada, including how to qualify for payments, tax details, and 5 dividend stocks & ETFs I personally like.
You can watch it here 🎥: Youtube Video Link
But if you’d rather read, here’s a quick breakdown of the 5 things that actually impact your credit score the most 👇
📚 What Are Dividends?
Dividends are company profits shared with shareholders. They’re usuallypaid out quarterly and can become a steady stream of passive incomewhile your portfolio grows.
But here’s what most people don’t know:
Just because you buy a stock today doesn’t mean you’ll get the next dividend payment… To qualify, you have to own the stock before the ex-dividend date (the company’s cut-off for who gets paid).
- Buy before it: you get the dividend.
- Buy on or after: you miss that round.
📈 Why Dividends Matter
✅ They provide consistent income (even during market dips)
✅ You can reinvest them to earn dividends on your dividends, that’s compound growth
✅ The most consistent companies grow both their share price and their dividends
When you combine dividends an growth, your income and wealth can grow together.
💼 My Top 5 Canadian Dividend Stocks & ETFs
RBNK (RBC Canadian Bank Yield Index ETF) – Focused on the big 6 banks, (around 4% yield)
VDY (Vanguard Canadian High Dividend Yield ETF) – Diversified Canadian dividend exposure, (3.5% yield)
CASH (Global X High Interest Savings ETF) – Steady monthly income, (2.4% yield)
Enbridge (ENB) – Classic dividend stock with great cash flow, and a long history of increases, (around 6% yield)
Power Corp (POW) – A financial powerhouse that owns major brands like Wealthsimple and Great-West Life, (around 4% yield)
(Note: Yields vary and are subject to market conditions. Always do your own research.)
💰 Final Thought:
Start small, stay consistent, and let time do the heavy lifting.
Before diving deep into dividend investing, make sure your foundation is solid. That means having an emergency fund, paying off high-interest debt, and setting up the right accounts.
Once that’s in place, dividend investing becomes a powerful way to grow your money and create passive income over time.
The earlier you build your base, the more freedom your future self will thank you for.
✨ Focus on the basics today, so your money can work for you tomorrow.
Your Finance Coach, Finance Femster