Welcome to my latest dividend income update for 2014. For those of you new to these posts on my site, every month I discuss my approach to investing using dividend paying stocks and Exchange Traded Funds (ETFs) and how reinvesting the dividends and distributions paid are helping me reach financial freedom. You can check out my previous dividend income update here.
Last month, I shared some financial lessons from a few legendary investors on what to do with our money. One of the best brains in the business said to:
- invest for the long-term,
- stay in equities,
- focus on low-costs, and
- seek out a plan to live off dividend income.
Over the last month, I’ve seen a stock that I have a small position in cut their dividend (a first for my portfolio) but I’ve also seen a few companies raise their dividends. Bad news or good news, my investing approach has not changed. I continue to own these companies through thick and thin. I’ve also become more attached to indexed products in recent years for these reasons:
- great diversification,
- transparent holdings,
- no stock selection,
- market-like returns, and
- regular distributions with capital appreciation.
Regardless of what the market does, I’m finding buying and holding established Canadian companies that pay dividends and increasing my position in a couple of indexed products is really paying off, literally. Thanks to a recent TFSA contribution, an account we want to maximize in 2014, I’ve calculated we’re on pace to earn just over $8,000 in dividend income this calendar year from the stocks and ETFs we currently own. That’s far shy of this retirement goal but each month that goal is getting closer.
We’ve got lots of saving to do this spring to reach our 2014 financial goals but we’re getting on track after an expensive holiday season. I’ll have another dividend income update next month – thanks for reading and sharing.