Welcome to my latest dividend income update. For those of you new to these posts on my site, every month I discuss my approach to investing focusing on dividend paying stocks and how reinvesting the dividends paid from the Canadian companies we own are helping us reach financial freedom. You can read more about that game plan here.
For this month’s update, I thought I’d revisit some of my favourite dividend investing tips. Here are some things that stick in my mind:
- Start investing early in life. It has been said the second best time to plant a tree was yesterday. The same goes with investing, start early if you can.
- To invest, live on less than you make (and keep doing that).
- Forget about watching your portfolio constantly. If you select a sound financial plan, you don’t have to do this.
- Who is interested in your investment success more than you? You know the answer…
- Time is a HUGE factor above your rate of return. A 10% annual return over a 20 year period generates more wealth than a 20% return over 10 years. Time does magical things when it comes to compounding.
- You can’t control how your investments will perform, so focus on what you can control, your investing behaviour, keeping your costs low and keeping your portfolio tax efficient.
It has been said a good portfolio is like a good garden. Sure, it takes some work to get going, and some attention to detail, but the garden should ultimately take care of itself over the years with some occasional pruning. Our dividend investing plan is similar. It took some work to diversify our investments early on, and we’ve performed some pruning over the years, but now we’re reaping the benefits of our investing garden planted years ago. We hold 30+ blue chip Canadian companies that pay dividends (and increase dividends) for passive income that is snowballing our way to an early retirement. We do not need our dividends for income today but we will need them in another 10 years. So, all dividends paid in our portfolio are reinvested to buy more shares every month and quarter. My spreadsheet from this boring plan tells us we’re on pace to earn close to $12,350 this calendar year in dividend income. That’s $600 more than the end of December 2015, just a few months ago, and about $1,500 more annual income since this time last year.
We haven’t reached our early retirement goal yet but we’re now 42% of the way there. Time in the market and ignoring market noise remains our investing friends.
Congrats on an additional $600 in a few short months. Inspiring for sure!
Can you or any of your readers point me to International Dividend ETF’s? I have a good number of CDN and U.S. Dividend payers but looking to capture the rest of the world through an ETF. Many I have looked at hold North American stocks.
Thanks in advance
Thanks for reading Chuck.
Consider these ones for the your research:
-ZDI (BMO product)
-RUD (RBC product)
-VGG (Vanguard – a low cost leader).
I really dig those monthly updates. They are proof that slow and steady wins the race..
Absolutely! I can see the progress, even when I make no investments.
J’espère un jour de voir mon portefeuille atteindre votre niveau , j’ai commencé l’an passé et je maintient le cap, au jour peut-être …mais le facteur temps commence a jouer contre moi …. ( Tout dépend de nos objectifs )
Quick, efficient, straight to the point. I like it. Thanks for sharing and keep up the good work on your investing. Can’t stop, won’t stop!
Thanks for the support! Will keep doing just that.
the gardening analogy is great
minor quibble about point number 3 – how do you know if you have a “sound financial plan” unless you check it?
otherwise always enjoy your posts except for the VERY annoying signup request popup that appears when linking to the webpage (and needs to be cleared before one can proceed with reading) – yes I realize you want to expand your readership but it would be nice if this could be turned off for those who have already signed up – maybe make the signup box on the page pulsate instead?
Thanks for the feedback. I will see if I can change the popup to appear with a different frequency. Fbgcai, have you been able to signup to my blog via email? This way, no popups – promise!
As for the sound financial plan, absolutely you need to check it now and then but I guess what I was trying to say was – if you have a decent plan, that is built before any financial products are considered, then your plan only needs the odd monitoring activities (i.e., when plans change due to life events). You certainly don’t need to follow the stock market with any level of scrutiny or concern – that is wasted time 🙂
your expanded comment re “sound plan” is appreciated.
I like this quote: “A portfolio is like a bar of soap – the more you touch it the smaller it gets”. – Anon.
I’ve been getting email from you for a long time (late 2015) and get the popup when I click through on the email link – of course when I tried again on today’s email – no popup hmmm! 🙂
I’ll monitor and let you know.
Thanks. I like the soap analogy – that’s good! 🙂
Thanks for sharing Mark. You’re doing awesome! Don’t stop and keep the snowball rolling. Appreciate the blog and it’s always fun here. Cheers bud.
Thanks DH! Will do my best to keep the pedal down.
Great advice Mark. Over $12,000 is pretty solid! Really like the garden/portfolio analogy. Hoping one day our portfolio will take care of itself. 🙂
Thanks Tawcan. The plan is coming along with every passing month.
The garden/portfolio analogy is great. We started growing some berries last year, only harvested a few. With some taking care and grooming, we might look at way more berries this year… Fingers crossed.
The same goes for a portfolio. It takes time to build. Having read a lot of DGI blogs, I am getting more and more convinced that I want a part of that as well for my portfolio.
Reaching 42pct of your goal is just great… You could take almost the rest of the year off!
Glad you liked it. The portfolio did take some time to build but I would say 75% of it is on autopilot now. I don’t even think about it.
Yes, 42% towards our goal. I hope to reach 46% by the end of the year.
Super summary and great advice. The nice thing about your plan is that the income IS compounding and will accelerate your growth over time. Even when your goal is reached, you may find you don’t need all the income to live off and continue to reinvest a portion of your dividends further growing your income. Even if you with draw all, the dividend increases should continue.
I hope so Cannew! I hope we reach our goal in 6-7 years.