It is said, in life there is death and taxes. Hopefully for the readers there is something more – living life, family and earnings.

Taxes is a consideration for every investment, however it should not be the first consideration. If you worry too much about taxes, there are relatively easy methods to shelter your money, but please note some of your taxes pay for the lifestyle which you live, or paying something is good. The question is how much?

That being said, paying too much or paying when there are alternatives, needs to be seriously considered. For example if you bought a Guaranteed Investment Certificate from your bank the interest would be 100% taxable as interest income. If you bought the stock or shares of the bank as it pays dividends – the dividend rate is taxable at 60%. You have saved 40% through the use of the tax system. (In the area where the writer lives these are the rates, over areas can vary) In addition, with dividend stocks, the capital gain is taxed at 50% and less if you lose money for the losses are deducted agianst the capital gains and the losses can be up to 5 years ago. This is the tax system helping owners of shares and dividend paying companies, why not use it?

From a tax perspective, dividends have advantages over interest income, but the it should not be the first consideration for investing. Over the years many of us have put money into investment devices to save taxes, but the investments have turned out to a long term holding on the books as the investments were duds. Words of advice – take taxes into consideration, but if you would not buy the investment without the tax savings, is it worth doing? With Dividend stocks and the quality that is available, the writer is confident you will see the tax system as one more advantage for the Dividend paying shares.

There are always more questions than answers, till the next time – to raising questions.