In most countries, income is being taxed more than dividends are. Instead of spending your hard-earned salary, you better provide yourself with an extra income to spend.

As shareholder of a company, in addition to being the owner of the company, you are also the rightful owner of your parts of the profit.

Mature companies that see few growth opportunities, often return a significant percentage of these profits to their shareholders as dividends. Real estate Investment Trusts are even legally obliged to distribute at least 80% of their profits to shareholders.

The dividends received can also simply be reinvested to increase your interest in the company and thus your passive income and you become less dependent on your salary or pension every day.