A new year brings new beginnings. It’s also a time to reflect upon the year that was – including our 2016 dividend income.
For those of you new to these posts on my site, every month I discuss our approach to investing focusing on dividend paying stocks. We believe buying and holding a number of Canadian dividend-paying stocks in our tax-free (thanks TFSA) and non-registered accounts will, over time, provide some steady monthly income for future wants and needs in retirement.
2016 was a heckuva year for the stock market.
Using iShares XIC ETF as a quick proxy for the Canadian stock market, returns were about 21% for the 2016 calendar year – amazing. For what it’s worth, the Canadian portion of our portfolio was up by the same amount thanks to capital gains and dividends from many of the same companies XIC owns in its top-25 holdings. These are companies we own directly and have no intention of selling.
As of January 2016, a year ago, our dividend income was about $11,750. It’s now $1,700 higher. To be more exact we finished the 2016 calendar year with $13,475 – almost half-way to our passive income goal.
We, of course, don’t spend any of that money today. This is because as much as possible we reinvest the income paid to buy more shares. We’re optimistic if we keep contributing to these accounts over the coming years, and reinvesting dividends along the way, working-days-on-our-own-terms will be much closer. We hope to reach our $30,000 per year passive income goal by the end of 2023.
Realizing that goal, in addition to other assets, should put us in a decent place for semi-retirement. Time will tell. Until then, it’s save, invest and reinvest every month and quarter. We then have fun with what is left over including these goals for 2017.
There is definitely something positive seeing money earned from our investments rolling into our account. It’s powerful to see more money earned with time. As a dividend investor I get to focus on the annual income (which is what these posts are about) rather than daily market swings. It’s a slow and steady journey but one I remain confident in.
A new year with some new beginnings. The reality is – it’s the same ol’ boring investment plan for us.
In future dividend income updates I’ll answer a few reader questions sent to me recently. Stay tuned for that information.
Until the next update good luck with your investments in 2017. Thanks for reading this post about ours.
Do you have any questions about our plan? What do you make of our plan? Are you on a similar plan?