August 2017 Dividend Income Update
Welcome to my latest dividend income update.
For those of you new to these posts on my site, every month I discuss our approach to investing focusing on Canadian 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.
Geez…better late than never with this post eh? Hard to believe there are only a few months left in 2017 – and September is half gone now…
Time to put the pedal down and get things done – including realizing our financial goals. Anyhow, back to this post…
Last month was kind to our Canadian stock portfolio. Some selected highlights:
Royal Bank increased their dividend by $0.04 per share (which translated into a $50 per year cash for life raise for us).
CIBC also increased their dividend recently, now $1.30 per share, also providing more future cash flow for an early retirement.
While dividends are never guaranteed (and total return is always important), I must admit, getting a raise for doing nothing except remaining a shareholder regardless of the stock price is a pretty good gig. This makes our investment plan rather boring.
We buy a number of Canadian stocks, some of them listed here, and hold them. We don’t trade, we don’t chase hot stocks and we don’t panic or sell when we hear bad company news. Inside our non-registered account we collect dividends. Those dividends are saved up over time to fund new stock purchases, once or twice per year. Inside our beloved TFSAs we collect dividends and reinvest those dividends every month and quarter for future income. That’s about as exciting as it gets in these accounts – sorry to disappoint. (Note: RRSPs are managed this way – not included in these updates.) If I want excitement, I’ll go watch the Senators play or the REDBLACKS play (and consume a few cold pints in the process). Watching and monitoring the Canadian stock portion of our portfolio is as exciting as watching grass grow. And like growing grass, as long as you don’t cut into it, it will continue to grow.
We’re optimistic if we keep maxing out our TFSAs every year, reinvesting most dividends paid and with any money left over we invest inside our non-registered accounts, we’ll come close to reaching $15,000 in dividend income per year in a few short months. This would be exactly halfway to our passive income goal for an early retirement.
So far, so good. I’ll share another update next month. Thanks for reading and sharing.
Got comments or questions about this part of our financial plan? Let me know. Happy to answer.