Welcome to another dividend income update. For those of you new to these posts on my site, every month I discuss my approach to investing using Canadian dividend paying stocks and Exchange Traded Funds (ETFs) and how reinvesting the dividends and distributions paid from these investments are helping us reach financial freedom.
When I break it down, our financial plan is rather simple. We:
- Buy established Canadian companies that have a history of paying dividends.
- Hold those companies through market thick and thin.
- Reinvest the dividends paid by these companies whenever possible.
- Put some cash leftover from our dividend payments into indexed ETFs.
- Diversify stock holdings across companies over time.
Now the annual contribution limit for the Tax Free Savings Account (TFSA) has been increased, we’re looking at ways to fund our TFSAs in light of our other financial goals this year.
Regardless if money flows into these accounts this year, thanks to existing holdings in Canadian banks, telcos, pipelines, energy and utility companies we’re on pace to earn about $900 per month this year in passive income.
The long-term game plan is to earn enough dividend and distribution income to pay for most living expenses every month, and eventually, not have to work at all. For this game plan to work, we need to stay invested, keep investing every month as much as we reasonably can and simply ignore most of the financial noise around us. Investing is simple but not always easy. I’ll keep you updated on where we’re at next month. Thanks for reading and sharing.