Where do you find the money to invest and save? You reduce your expenses by doing things such as driving less, cutting cable and/ cable packages, cheaper cell phone plan etc. An individual needs to set save a percentage of their income. This has to be a priority before paying rent, paying mortgage, buying groceries or anything else that you spend money on. You will see your savings grow and when you have enough saved it is time to make your money work harder for you. If you are short money before the end of the month, a person should look at additional forms of income such as a second job or part time home business. NO ONE is going to be in your face to pay yourself first so its take a lot of discipline.
Starting out, buying shares in established companies that pay dividends can be advantageous. When Canadians invest in dividend paying stocks from Canadian corporations, the dividend income is taxed favorably over ordinary income (marginal tax rate). Interest from savings accounts and bonds and dividends from foreign companies are taxed at your marginal rate. The dividends from foreign companies can be offset by the foreign tax credit as there is a 15% withholding tax when buying US stocks in a non-registered account. Companies that pay dividends also increase their dividends on a yearly basis.
You can use your dividend income to help pay bills or you can reinvest the dividends to help compound your money. You can use the dividends along with fresh capital to invest in the stock market or use DRIPs. You have to leave money alone to see the benefits of compounding.