Income Snowball
The Income Snowball is the compounding growth of dividend income over time as you buy more shares with new capital and DRIP reinvests dividends into new shares. Each new share produces its own dividends, which can buy still more shares in future cycles.
How Prospyr uses it
The Income Snowball Tracker is coming in Phase 2. It will track the split between income generated by your original capital versus income generated by DRIP-reinvested shares — showing the exact moment the snowball tips past 50% DRIP-driven. The DRIP Engine Simulator (available now) models the share growth component of the snowball: how many shares DRIP reinvestment generates per cycle, and how that compounds over your chosen time horizon. The Phase 2 tracker adds the metric that makes the snowball tangible: “You are now 62% DRIP-driven.”
Example
Year 1 earning $2,000/year in dividends can become Year 5 earning $4,500/year through DRIP plus contributions, without additional capital beyond the planned contribution path.
Why this matters for Canadian investors
The Income Snowball is most powerful inside a TFSA, where dividend income and capital gains accumulate with no tax drag at any stage. Every DRIP-reinvested share inside a TFSA generates future dividends that are also fully sheltered — the snowball compounds on the full gross amount, not the after-tax remainder. For RRSP investors, the snowball still compounds tax-free during accumulation, but withdrawals are taxed as income. Placing your highest-growth DRIP positions inside a TFSA is one of the most impactful optimizations available to Canadian income investors.