August 2019 Dividend Income Update

August 2019 Dividend Income Update

Welcome to my latest dividend income update for 2019 folks – happy to have you on the site.

For those of you new to these posts on my site, for the last few years, every month I discuss our approach to investing using Canadian dividend paying stocks.

To recap, we take a hybrid-approach to investing.

These posts are only a portion of those updates.

• Approach #1 – we own a number of Canadian dividend paying stocks for income and growth. These updates focus on that progress.
• Approach #2 – we’re owning more units of low-cost U.S. Exchange Traded Funds (ETFs) inside our RRSPs over time. I believe owning more U.S. ETF units (over time) is a great complement to our Canadian dividend income machine…

Over the summer, I’ve received a number of emails about our investing approach; what stocks in particular we own, what is our biggest holding, and what stocks we’ve held the longest.

All great questions!

So, let’s answer them as part of this dividend income update.

What do you own and why do you own what you own?

I answered those questions and much more here.

I don’t intend to sell any stocks anytime soon.

What is your biggest holding?

Actually, it’s not a dividend paying stock at all.  It’s low-cost U.S. ETF VYM.  I’ve owned VYM for many years now and I have no intention of selling any units.  In fact, I hope to own more units of the ETF over time.

At the time of this post, VYM is approaching 10% of our entire portfolio.  Eventually, it would be nice to see U.S. ETFs comprise about 25% of our portfolio.  We’re working on that…

My hope is I can use the distributions earned from VYM to cover some of my semi-retirement expenses in 5-10 years without selling any ETF units.

Since these updates are strictly about our Canadian dividend paying stock holdings and dividend income derived from those assets, our biggest Canadian stock holding is Bank of Montreal (BMO).

I’ve owned BMO for over a decade now, and again, there is no intention of selling this stock.

What stocks have I held the longest?

A few come to mind:

• BMO
• Enbridge (ENB)
• Canadian Imperial Bank of Commerce (CIBC)
• Fortis (FTS).

Unless these companies stop paying a quarterly dividend in the coming years, or decades, let alone stop increasing their dividends like they tend to do every year, I will continue to own them.

Am I looking at any other stocks to buy and hold?

Not really.

Like I mentioned last month, the sloth-like energy I expend to stay invested (in my basket of dividend-paying stocks and low-cost U.S. ETFs) is really starting to pay off with this extended bull market run. 

After the early years of seemingly seeing little progress within the fish-bowl of investing, it’s motivating and gratifying to look back years later and see some major gains.

If you want to read more about my boring approach to successful investing you can find more details on these pages here:

This is how I built my dividend portfolio.

Check out why I love dividends.

Check out why I’m a huge fan of some ETFs and how many you should own.

Where are we at now with the dividend income?

Thanks in part to some recent dividend raises (thanks Royal Bank), I’m forecasting we might earn close to $19,200 by the end of this calendar year (December 2019) from our tax-free and tax-friendly account (TFSAs and non-registered respectively) as long as the companies we own continue to pay dividends at the rates they do.  Who knows?  We might get more dividend increases in the coming months….pushing this income total higher and closer to $19,500!!

For those paying attention, this total is $200 more than just last month.  To earn this money, I did nothing more than stick to our plan and hold the same (boring) stocks as we did last month while reinvesting dividends paid to buy more shares commission-free.

You can read about the pros and cons of dividend reinvestment plans here.

If it ain’t broke – don’t fix it.  That’s my plan. 

I look forward to sharing my next update with you.

Mark