Consider the Taxes

Most of my friends and family don't quite understand why I get so excited over my dividend income each month, when it is a relatively small amount compared to my paychecks. Aside from the fact that the income from my dividends goes up every single month and has doubled every year for the past few years, what really excites me about the income I earn in this way are the taxes I don't have to pay. Of course I pay taxes on my dividends, except for the first $500 which are currently tax exempt, and I pay taxes on capital gains just like everyone else. However, what most people don't seem to keep in mind is that you only pay income taxes on this type of income. When you earn money from a job, you pay income taxes and you pay social security taxes and medicare/medicaid taxes. You do not pay social taxes on dividend or capital gains income. So why wouldn't you be excited about increasing income with decreasing tax liability? It just makes sense to concentrate your efforts on building more investment income, as opposed to earned income, when the tax advantages are obvious. Add to the tax advantages the fact that there is no real physical labor on your part to earn the income from stocks and you can see why I'm so happy to see those dividends roll in month after month after month.