Glossary
Prospyr Glossary
Plain-language definitions for the terms and frameworks used across Prospyr's calculators, blog posts, and planning system.
Start here
The four terms most visitors should understand first.
Glossary section
Portfolio Health
The core status language Prospyr uses to describe whether a holding is stable, pressured, or already failing to reinvest cleanly.
At Risk
Framework term, coming in Phase 2A Coverage Ratio below 1.10. The DRIP is getting close to the point where reinvestment can fail.
Broken
Framework term, coming in Phase 2A Coverage Ratio below 1.00. The position no longer generates enough income to sustain DRIP at current levels.
Coverage Ratio
Framework term, coming in Phase 2A metric that measures how safely a dividend-paying stock can sustain its current payout.
- Fortress (Green): Very safe dividend; significant buffer above minimum.
- Defended (Yellow-Green): Solid dividend; adequate buffer.
- At Risk (Yellow): Dividend may be vulnerable if circumstances change.
- Broken (Red): Dividend is at risk of suspension or cut.
Example: ENB (Enbridge) with strong cash flow = Fortress-rated holding.
Defended
Framework term, coming in Phase 2A Coverage Ratio of 1.10 or higher. Healthy, but still worth watching if share prices keep climbing.
Fortress Status
Framework term, coming in Phase 2A Coverage Ratio of 1.15 or higher. The DRIP has meaningful buffer above the minimum threshold.
Glossary section
DRIP Mechanics
The terms that explain how reinvestment actually behaves once share prices, payout size, and compounding pressure start interacting.
DRIP Break Point
The specific share price where a position's current dividend income can no longer sustain automatic reinvestment.
DRIP Buffer
The margin between a holding's current dividend income and the minimum income needed to keep DRIP active.
Price Creep
The phenomenon where rising share prices reduce the number of shares you can purchase with each DRIP payment, eventually threatening the health of your automatic dividend reinvestment. Prospyr alerts you before your DRIP breaks.
Example: If a stock price rises 50%, you'll buy 33% fewer shares next quarter, slowing compounding.
Glossary section
Income Planning
The planning language behind how Prospyr frames progress, income replacement, and the transition from growth to spendable cash flow.
Conversion Pipeline
The flow of capital moving from growth holdings into income-producing positions over time.
Income Snowball
The compounding growth of dividend income over time as you buy more shares with new capital and DRIP reinvests dividends into new shares.
Example: Year 1 earning $2,000/year in dividends to Year 5 earning $4,500/year through DRIP plus contributions, without additional capital.
Income-First Investing
A portfolio approach that prioritizes sustainable dividend income over pure capital appreciation.
Time to Freedom
The projected point where your dividend income reaches a chosen lifestyle target.
Glossary section
Yield and Tax
The metrics that help investors compare what a holding appears to pay, what it actually pays, and what tax drag changes in practice.
Net Dividend Yield
Dividend yield after withholding tax and account treatment are taken into account.
Tax Friction
The tax drag created by holding a dividend investment in a taxable account instead of a sheltered one.
Yield on Cost
Dividend yield measured against your original purchase price instead of the current market price.