April 2022 Dividend Income Update
Ah yes, my love of dividends, let me count thy ways!
What are my monthly dividend income updates all about?
In my February dividend income update, I answered a handful of reader questions on that.
Last month, I shared my take (and plan) to navigate market turmoil with my portfolio and why any turmoil is actually healthy from time to time.
This month, a mix of new reader questions and what I’ve purchased year to date.
Let’s get into it!
Reader questions about my investing approach
I’m all for Nay if you need the money. My intention is to stop any DRIPs when I need the money. Otherwise, I’m taking a total return approach: reinvesting as much as I can until I need the money. I will likely stop all DRIPs in my taxable account and maintain all DRIPs in my TFSA for as long as possible.
Mark, I read about your “5% rule” from your FAQs page. Any stocks valued over 5% now and if so, which ones? Will you sell stocks when they exceed your 5% rule?
I love these questions – you want to know what I own and how much! Ha.
Last time, I recall my biggest stock and ETF holdings as end of 2021 were:
- Vanguard Total Stock Market Index Fund (VTI)
- TD Bank (TD)
- Royal Bank (RY)
- Emera (EMA)
- Telus (T)
- TD Bank (TD)
- Royal Bank (RY)
- Telus (T)
- Fortis (FTS)
- Vanguard Total Stock Market Index Fund (VTI)
VTI has slipped a bit with the recent U.S. market slide. TD, RY and others remain in the top-5 even with Canadian stocks lagging a bit in 2022. Again, for any individual stock, I try and keep any one stock to about 5% or so of my overall portfolio value for risk-based purposes. That’s my “5% rule”.
That said, I feel it’s OK to keep any one stock up to even 10% of market value, so long as those individual stock risks are understood and accepted. What goes up, can also go down…way down.
Looking at you: $SHOP
Mark, did you buy anything from your 5 stocks list yet? If so, which stocks and when?
Well, I did 🙂
After I maxed out our TFSAs in January, and bought more units of low-cost ETF XAW (bad timing, right???) I did purchase some EQB recently.
Mark, are you still keeping cash with inflation running higher?
Two key reasons why aligned to The Psychology of Money thinking:
1. “The biggest single point of failture with money is a sole reliance on a paycheck to fund short-term spending needs, with no savings to create a gap between what you think your expenses are and what they might be in the future.”
2. I do this because I see “…cash is the oxygen of independence….”. It helps me avoid selling/being forced to sell any stocks I own when I least want to.
April 2022 Dividend Income Update Summary
With stocks and ETF units DRIPping along nicely, our money is always working – along with a few strategic purchases along the way!
Key stocks that paid us dividends this month:
- REI.UN (DRIP x1 share every month)
- POW (DRIP x1 share every quarter)
- T (Telus) (DRIP multiple shares every quarter)
- BNS (DRIP multiple shares every quarter)
- AQN (DRIP multiple shares every quarter)
- BCE (DRIP multiple shares every quarter)
- TD (DRIP multiple shares every quarter)
- And more…
Note: I don’t include my RRSP assets in any of these reports for privacy reasons.
As of this month, we are anticipating we might earn $26,234 in forward dividend income for the calendar year ending 2022 from some of our investments. That means we are well on our way to realizing this 2022 calendar year target!
To put that income more into perspective:
- Almost half of that annual income is tax-free. Yes, all true. We will not pay tax on that income when we decide to withdraw monies from our TFSAs.
- Our forward dividend income continues to rise by about $100 or more per month thanks to compounding power alone.
- $26,234 in annual income translates to earning now $3 per hour of every hour of every day in my sleep. That’s a tidy $72 per day from part of our portfolio with me doing, wait for it, nothing.
Thanks for reading and sharing. Please bring forward your comments and questions for any future updates!
Mark, you are getting there fast. Will you adjust your goal higher with the high inflation?
This year my dividends income actually went down a bit as there are a few of my DGI stocks were called away in January. Looking back, all of them have a price tag that is much under the call price.
Still a few years to retirement, I suspect I will adjust my portfolio quite a bit before that. Overall, I am a buy and hold investor, but cannot keep myself to look at the market and try to improve. Maybe I’d better just sitting here and not doing anything. But I realized one cannot fight one’s own nature. I am the kind of person just cannot just sitting there and do nothing, LOL.
LOL. Getting there.
I might realize $30k per year in non-reg + TFSAs income in another year or so if I get more dividend raises. We might be closer to $28k this December 2022 vs. $27k. That’s OK with me 🙂
Nope, I’ll stick to my plan May which means by the end of 2024 we will consider semi-retirement. Not sooner unless something changes.
The only thing I am doing as I approach semi-retirement is buying more stocks and saving more cash. I figure the combination of ~ $50k in cash and my portfolio (assuming dividend income keeps going up over time) is a good way to start semi-retirement!
Nice to hear from you!
I am living the question about drip or no drip In semiretirement. My approach us similar to yours. I have been un-dripping some , but others keeping dripping. I don’t need to stop those yet. I don’t need all the cash flow. Eventually, they will all be cash dividends. It’s all a process. I have the option of going all cash,if inflation, causes the market to crash. To increase cash holdings
That seems quite smart Richard – don’t stop DRIPping what you don’t have to 🙂
Eventually, all DRIPs will be stopped eventually and the last ones I will probably turn off are those inside the TFSA – I don’t expect to tap that money until my 70s or 80s.
Nice to hear from you 🙂 See you on the Twitter machine!
I still have about 18% of our overall portfolio in cash for now, as I see very hard times on the horizon. I’m roughly 1/6 cash, 1/6 gold, 1/6 REITs, 1/6 Mortgages, 1/6 Utilities and Healthcare ETFs, and 1/6 odds and ends. Everything is in Retirement accts, two RRSPs, a Spousal RRSP, and a LIF. My LIF was modest, at 150K when I retired, and I’ve been pulling about 4% out of it, and it’s still grown to 210k in the last 5 years. About 1/4 of my LIF is in cash right now. And I’ve also bought some split share preferreds, FTN.PR.A and RS.PR.A. FTN pays 6.5 points and RS about 5 points, and the market has to tank about half to have any risk of capital loss. I think these are a safer choice than individual corporate preferreds.
Governments are broke and I think it’s always wise to keep some cash/cash position with higher % of stocks.
What % of your portfolio is in preferreds? I just own common stocks but not against changing my plan as I get older!
Way to go keeping the needle moving the right way!
Trying!! Thanks again for the comment and support of the journey.
TD Bank (TD)
Royal Bank (RY)
“That said, I feel it’s OK to keep any one stock up to even 10% of market value”
Personally, I wouldn’t worry too much even if I owned just these four stocks and had 25% ownership in each.
Those seem to be good companies but I’m biased too! 🙂
April I invested less because I’ve also been holding back cash in anticipation of shifting gears to self-employment soon so I wanted to have a cash nest as my own business ramps up. Admittedly, it’s hard for me to see that cash sitting in my account while the market is down.
My RRSP is about $30K of room a year so I have not maxed it out yet. I’ve got lots of time. I’ve also not maxed out my TFSA yet because I want to get a definitive word from the CRA about my contribution room as I over contributed one year and now I’m nervous.
My mom says I should spend more money on me but I tell her I have everything I need – what do people spend money on? My mortgage is paid off so I buy groceries of course and some entertainment out of the house but beyond that, I don’t have anything to buy. So I invest it. When I travel I travel largely on points and I keep it very cheap so I don’t spend a lot on travel either although I’m going on several trips out of country this year.
Still incredible on your part…the investing so much. Kudos.
Yes, that TFSA contribution room can be tricky.
Our mortgage is soon done and after that, likely some part-time work as part of semi-retirement. We also enjoy travel, nice dinners, etc. The ability or luxury to travel largely on points is awesome. Well done. Do you use a Aeroplan or related credit card for that or other? I hope to travel overseas this summer a bit.
Most of my pre-existing Aeroplan points came from a ton of business travel I’ve done pre-COVID.
Gotcha! Well played 🙂
Don’t quite see the max contribution of $30K for the year unless you under contributed in previous years.
“For 2021 the RRSP deduction limit is $27,830,”
Still keeping cash with inflation running higher? Couldn’t you just take your taxable and/or TFSA dividends for the period you needed them (assuming no other income to cover the shortfall) rather than hold a lot of cash?
Well, not holding lots of cash but a bit. I sleep better that way 🙂 RRSP, TFSA all full right now and 100% invested with very little cash there. Only taxable really to invest in for the rest of 2022.
How about you?
I can’t believe how much you invest every month 🙂
This is so inspiring Mark. I love yo see how your annual dividend income has grown over time since 2009. I find it so inspiring and reassuring that with financial discipline, anyone can do it too. Thanks man.
Thanks very much 🙂
It’s really only a few key ingredients: money saved + time + staying out of my own way 🙂
I hope you keep checking in on the progress – May report should be out in a few weeks!