December 2022 Dividend Income Update

December 2022 Dividend Income Update

Quite the investing year that was…

Welcome to my December 2022 dividend income update.

This time last year, our portfolio was up about 30% overall. I have the post to prove it.

2022 was different.

This year was not lots of investing fun but we saw it coming (I think?) and I tried to prepare along the way accordingly…

Fear and market doom-and-gloom triggered many investors to sell in 2022. 

With a good financial plan you don’t need to react that way. 

2022 will go down as a year many investors may want to forget, or at least put behind them – unless you were buying cheap assets of course.

The S&P 500 ended the year down about 20%, while the Canadian TSX index was (only) down about 9% in 2022. The tech-friendly Nasdaq offered up a lump of coal to investors, down 33%.

In a year where there were few places to hide, the energy sector rebounded and long-term buy and hold investors in Canadian energy assets were rewarded. Myself included. The S&P energy sector shot up over 55% and our Canadian TSX energy sector was up over 45% in 2022 – calendar-year returns we probably won’t see again for some time although if I was a betting man, I suspect most energy stocks might continue to buoy investors in 2023….just not as much as 2022. 

Source: https://www.spglobal.com/spdji/en/indices/equity/sp-500-energy-sector/#overview

Strong energy prices heading into 2023 are likely to favour a home-country-bias given our resource-rich Canadian market, where energy stocks represent close to 20% of our index vs. energy stocks that make up only a small portion ~5% of the U.S. S&P 500.

Even bonds might get some love again in 2023.

That said, I personally won’t be buying any bonds myself and instead I’ll load-up on more of my favourite stocks or ETFs for higher dividend income and distributions to compound away. 

What does this mean for my December 2022 Dividend Income Update?

2022 was another teachable moment for me as a DIY investor since it reinforced staying invested is essential for wealth-building, regardless how far down or how high certain stock prices might go.

I’ve learned that sticking to an investing approach I believe in, that I can maintain, is essential for goal achievement. 

I’ve also learned that owning a little bit of everything (energy stocks, financial stocks, healthcare stocks and other companies from other sectors) will provide some necessary diversification when any one sector shines or performs poorly over time. Market returns from 2021 and 2022 tell us market history rhymes although there are stocks that tend to Beat the TSX over time and it’s worth owning those.

December 2022 Dividend Income Update

This time last year, we reported a final 2021 dividend income tally of $24,997. That was income delivered from the capital invested inside our TFSAs (x2) and one, then non-registered account. 

By staying invested, reinvesting dividends, maxing out our TFSAs in early 2022 and with some additional investing in our taxable accounts where possible/where we had any money to do so, we blew past our 2022 dividend income target as we consider stepping into semi-retirement in another year or so. 

In 2022, we earned a total of $29,316 from a few key accounts. It was a great year of higher income. 

(A reminder our RRSP assets are always excluded in these monthly dividend income updates, for privacy and other reasons. You can find more answers from readers on my FAQs page here.)

To put that juicy 2022 dividend income stream into perspective:

  • Even with some low-cost ETFs inside both TFSAs, we averaged over $1,000 per month in tax-free income for the year.
  • We earned $3.35 per hour of every hour of every day (income/8,760 hours (24 hours x ~365 days)) even in our sleep. 
  • This income translates to an average monthly income stream of $2,443 (which is bound to be higher in a few short months as I fund our TFSAs again for 2023.)

Here is my updated chart for 2023 including a new year end target we hope to achieve by the end of December 2023:

MOA Dividend Income Target 2023

For almost 15 years now, dividend investing remains at the core of my investment plan.

Here are just some of the *companies we own inside these accounts (non-regs. and TFSAs) that we hope to get some dividend increases from again in 2023:

  • AQN* Likely a cut coming in 2023? I’m planning for this. 
  • BCE
  • BMO
  • BNS
  • CM
  • CNQ
  • EMA
  • ENB
  • EQB
  • FTS
  • NA
  • RY
  • SU
  • SLF
  • T (Telus)
  • TD
  • TRP
  • WCN

We also own low-cost ETF XAW inside our TFSAs for growth. 

Of course, they are many ways shareholder value is created. 

Dividends are just one important part of total return. 

Shareholder value can be gained from many sources: dividends as part of total return, price appreciation, increasing free cash flow, share buybacks, company acquisitions and paying down debt. Shareholder value is the value delivered to owners – based on management’s ability to increase sales, earnings, and free cash flow – which leads to an increase in dividends and capital gains for the shareholders.

I must say, I do enjoy getting paid to be an investor.

December 2022 Dividend Income Update summary

For new investors out there, new readers to this site, a reminder this income stream has taken years to build. This investing approach is not without some *risks. Meaning, dividends from *individual companies can and do get cut from time to time. (Looking at you *Algonquin Power (AQN) in 2023…). 

For all investors out there, a reminder I don’t believe in any magic bullet when it comes to investing, let alone predicting the future. As such, owning any one individual dividend paying stock won’t deliver investing success unto itself but owning a basket of Canadian and U.S. dividend growth stocks should tip the scales in your wealth-building favour.

As a guideline, for any individual stock no matter how good it seems today: I tend to follow my “5% rule”.

That is: don’t let any one company reach too much higher than 5% of your total portfolio value.

I also answered that question and posted it with others on my FAQs page.

I look forward to seeing what new highs this portfolio can deliver in 2023 as financial independence and work on own terms #FIWOOT draws ever so close.

Further Reading:

I’ve always preferred FIWOOT to FIRE.

Ignore the 4% rule for any early retirement planning.

Here are 5 important factors to consider when it comes to semi-retirement or full-retirement. 

My Dividends page was recently updated so you can learn more about my investing journey including what stocks I own where. 

I don’t intend to withdraw from my TFSA, for decades, but I do intend to tap my RRSP in semi-retirement. Read on: how and when to withdraw from your RRSP and TFSA. 

How and when to withdraw from RRSP and TFSA

Happy 2023 to you and your family.

See you around the site!

Mark

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I've surpassed my goal and now investing beyond the 7-figure portfolio to start semi-retirement with. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

35 Responses to "December 2022 Dividend Income Update"

  1. Congratulations Mark on your record breaking dividend increase. What a way to start a new year with a great ever-increasing income stream from 2022. I understand you are very focused on dividend income year after year. But, if someone’s stock portfolio has gone down by, say, 30%, valued at $50K and you receive $30K dividend income in a year, is’t still worthwhile to stay in the stock market? You have, on paper, a $20K $ loss. Or is it better to invest the majority of your money in fixed income, say, earning 5% a year on your investment. That way, you have capital growth and income growth. This is particularly important if that investor has to withdraw and sell his stocks at a loss if he needs the money. I know the ideal investment is to have both capital growth and dividend income at the same time. What are your thoughts.
    Thanks Mark for your valuable comments.

    Reply
  2. Deane Hennigar (RBull) · Edit

    As always well done Mark. Cheers to a prosperous 2023, but I know we’ll just simply take what we get and make the most of it!

    Reply
  3. Hello Mark.
    Congratulations! You’re on your way to your financial goal. Keep it up.
    I noticed your list of dividend stocks are: AQN, BCE, BMO, BMS, CM, CNQ, etc. for your TFSA. These dividends are in US funds (TSE) as opposed to Canadian? What’s the advantage of having it in US funds rather than buying the Canadian counterpart (i.e., AQN.TO, BMO.TO and so on).

    Thanks for your time.
    Karl

    Reply
    1. Hi Karl,

      I only own BCE, CNQ, etc. – some Canadian stocks that pay dividends in CDN $$ inside my CDN $$ TFSA at this time.

      Hope that helps!
      Mark

      Reply
  4. Hi Mark: Yes I have ENB, PPL, TRP and I used to have IPL but it got bought out by BIPC. I received 500 shares of BIPC for my shares in IPL so when it comes to pipelines I guess you could lump BIPC in there also. Yes by 2024 I will have over $30000.00 for each of those months. Thanks for the heads up Lloyd. Does that mean that I will receive .6525 instead of .2175 which I receive monthly now. If so that will put me over the $30000.00 this year for those four months. Stay well and keep investing.

    Reply
    1. “will receive .6525 instead of .2175”

      I have not seen an announcement on the dividend amount yet but I am assuming (at least on my spreadsheet) that it will just multiply the monthly by 3 to get the quarterly. They *might* use this change to adjust the dividend but I’m not anticipating it. Doesn’t really change much for me. PPL is in my RRIF so I’ll just have to get used to seeing residual cash in the account.

      Reply
      1. Thanks Lloyd. I own a small bit of PPL but much more ENB and TRP but considering adding more PPL over time. I like your call on that in the RRIF for an income stream with other stocks. My parents have a RRIF now (that I help set up) but they are far and away not income / dividend investors so I put them into some low-cost ETFs.
        Mark

        Reply
        1. PPL and AQN 🙁 are the last two stocks I hold in the regular RRIF (BIP.UN and T in the LRIF). I got out of most of the individual stocks in both of those accounts and moved into XEI and XDIV just to make things simpler. No real reason I kept them other than I just never got around to getting rid of them. All four were part of my early March 2020 sell off and re-buy so the ACB for them was fairly low.

          Reply
          1. Well, it will be interesting to see what happens next week with $AQN.
            https://www.theglobeandmail.com/investing/markets/inside-the-market/article-why-is-algonquin-power-rallying-any-news-on-the-dividend-is-good-news/

            “So far, the company has said nothing about what is coming next week. In a statement on Tuesday, Algonquin said that its chief executive officer and chief financial officer will provide a business update on Jan. 12.”

            Stay tuned. Many DIY investors are looking at next week for some signs of life!

            XEI and XDIV are good income ETFs, as you know, but likely no need to own both? Thoughts?
            Mark

            Reply
            1. “but likely no need to own both?”

              Need? No, not really. I had started to go with XEI in the beginning right after RRSP/LRSP conversion and it was and still is the larger holding (20% of overall versus 10% XDIV). When I moved further away from individual stocks in the RRIF & LRIF, I had a look at XDIV and “thought” that the much lower exposure to energy was not a bad thing. No real analysis done at all. Turns out XEI had a great year (relative to overall market) with all that energy component. I’m not disappointed with either. They churn out a good portion of the entire monthly mandatory payments required in the RRIF and more than enough in the LRIF. The other dividends are in excess and I have just been accumulating them in TDB8150. I’ll likely to a small GIC ladder in the following weeks to capture the higher rates.

              Reply
              1. Fair enough and yes, lower energy exposure for sure – balanced differently. XEI is a good income fund overall. I know others that own it instead of XIU. XIU is still my favourite in Canada for an ETF to own – a blend of income and growth (over time of course)!

                I consistently rank it in my top-4 (XEI and XIU):
                https://www.myownadvisor.ca/top-canadian-dividend/

                XEI has a recent tilt to energy which makes sense since SU, CNQ and others like some pipelines could have a good 2023.

                Have a great weekend Lloyd,
                Mark

                Reply
                1. I utilize XIU in the non-reg account and have been donating some of those shares to the endowment funds to avoid any capital gain tax. It’s a good product for that type of account and purpose. The only issue is that I don’t want to add to it in that account as it would effect the ACB so I’ve switched to XIC for new investing there.

                  Take care.

                  Reply
  5. Hi Mark ~

    A great read, as usual!! A question: In an earlier article on dividend investing, you wrote, “Living off dividends” to some degree can help reduce any income worries about when to sell shares during any market downturn of 20% or 30%. I can simply take the dividends and distributions as cash and live off that.” If a stock held in your TFSA pays a dividend, and you take that dividend as cash to live off, do you know whether taking just the dividend counts as a withdrawal from your TFSA? You don’t sell the stock itself, you just scoop the dividend it generated. Many thanks!

    Reply
    1. I love questions 🙂

      Yes, I believe and my behaviour reinforces this that I tend not to worry (too much!) when markets last year tanked in value because I believe in a “live off dividends” apporach as I strive to work part-time in semi-retirement in the coming years.

      To recap, what I intend to do is:
      1. Live off dividends from our taxable accounts,
      2. Make slow RRSP withdrawals over the coming 20 years, and
      3. If I need too, withdraw TFSA dividends tax-free.

      So, if a stock is held in my TFSA, and pays a dividend, I might take the cash paid inside the TFSA and withdraw that money – no selling that stock at all. The capital/investment/stock stays intact inside the TFSA.

      I will be updating this post, soon, for more details about my potential drawdown plan.
      https://www.myownadvisor.ca/financial-independence-update/

      The drawdown plan is included in that post.

      Thanks for reading!
      Mark

      Reply
      1. HNY Mark
        Long time since I commented but I’m still kicking.(in Mexico)
        Re: withdrawing only cash dividends from Tfsa. I believe this counts as a cash withdrawal and could be recontributed the following year.
        However my brokerage charges $50 plus gst for every withdrawal.
        Do you know if there is a way to funnel cash dividends from TFSA into a chequing account ongoing without having to pay for each withdrawal?

        Reply
        1. Nice, Mexico. Love it. 🙂
          HNY back!

          Correct, you can withdraw from your Tax-Free Savings Account (TFSA) at any time and for any reason, with no tax consequences, including the cash dividends or distributions.

          I would need to shop around and look at the brokerages to see who does/does not charge withdrawal fees for removing any $$ from TFSAs. All brokerages are not created equal. If they charge you, you can negotiate with them. Otherwise, they might lose your money!

          I hope that helps a bit. Enjoy Mexico and stay safe and well!
          Mark

          Reply
  6. Hi Mark: The stock market is like a yoyo as what is up one time is down another, but in the end it always seems to rise so there is no point sweating the year over year values as 2022 was a bad year compared to other years but not that bad. Yes my net worth decreased from the previous year but when the banks are near $100.00 that is not bad. Also Nutrient at around $100.00 is not bad. If you don’t panic you can still rake in the dividends and distributions and your pay increases. As for me when it came to dividend and distributions these are the increases. AX-UN, BCE, BAM (they also spun off the manager in DEC.), CU, EMA, ENB, EIF, FTS, Manulife, NA,PPL, T, TA, TD, TRP, VERMILLION ( restarted dividend and gradually increased it in RRIF ). There might have been more such as BIF-UN, but I think that was pretty good. TD made a mess of my activity page when it came to the Brookfield spin off and also I was puzzled by my PPL dividend. They pay on the 15th and I got it on the 15th, but as I was looking through Brookfield I noticed a PPL payment on the 30th, The same payment as on the 15th. It appears that I received a double dividend from the company. In 2024 I will have $30000.00 for Mar., June, Sept. and Dec. Keep investing and don’t sweat the month to month, year to year workings of the market as each year your dividends will be more than the previous year. That is the secret of compounding.

    Reply
    1. Very much a yo-yo, Ronald!

      Like many DIY and dividend investors in Canada, I also own many of those stocks: BCE, EMA, ENB, FTS, MFC, NA, PPL, T, TD, TRP….

      Do you own a lot of pipelines in your portfolio? ENB, TRP, PPL?

      Are you also saying by 2024 you will earn on average about $30,000 every quarter in dividends??

      Wow if so :)))

      Thanks for the kind words…
      Mark

      Reply
  7. Another great update Mark that puts you closer to your target to reach your FIWOOT, I haven’t started planning my retirement yet maybe because I still have about 13 years to go , for now we’re just being disciplined about our investing and saving but of course enjoying life as well because tomorrow is not guaranteed.Our portfolio is down 8.5% for this year but it doesn’t matter because our income from dividends doubled from 2022 after selling all our etfs and just invested in 30 Canadian dividend growers following the TULF portfolio with couple of reits added to it 🙂 , I know the big debates about total return and I don’t think there’s a rigth or wrong about this as long as you save and invest, as for AQN I’m excited to hear what they have to say and do and even if they cut the dividend by half it still good.

    Reply
    1. Thanks very much, Gus!

      …being invested in some 30 Canadian dividend growers following the TULF portfolio with couple of reits added to it – should put you in great shape over time.

      I expect AQN dials back some debt/shares a debt reduction plan and cuts the dividend by 50% – basically personal finance 101 – don’t spend more than you make! LOL. We’ll see.

      Happy New Year to you!
      Mark

      Reply
  8. Love seeing this and what a number to achieve, kudos for your diligence and consistency…Before you pull the semi retirement plug, bank a little more than you planned on while you are still gainfully employed. This helps in 2 ways. Allows a little more time for asset accumulation, and helps cover the what if’s. Speaking from experience as looking back I pully the plug .75-1 year too early on starting semi retirement. Yes I planned and had a contingency, so no major damage at all but, that extra cushion was eroded away some (as life got in the way due to something unforeseen). Now almost 8 years later I am back to where I should have been with some very slight sacrifices.
    As for AQN I have a 5% position and I am down almost 47%. I just bought some more(sub $9 dollar cost averaging) as I am banking on them doing the prudent thing and cutting the dividend. The day that is announced I see as another buying opportunity as shareholders will spook and some will panic sell. Then I will scoop some more at bargain prices and wait for a rebound as I agree with a 24-36 month timeframe.
    Please keep on publishing this blog after you semi retire, as I have literally referred over 60 people, who now follow you. I try to educate where and when i can, on buying quality dividend stocks, starting young and holding for decades to eventually reach FIWOOT. It worked for me and judging buy your readers responses, it has for many others…your blog just puts it all together nicely in a visible way.
    Invest and prosper Mark
    I wish you continued success in 2023 and beyond!
    L

    Reply
    1. Lou, love the comments. Very kind. These comments make my day!

      It’s amazing how long I’ve been at this, blogging this journey for 15 years – almost half of my investing career!

      I like your call on the semi-retirement advice. I hope to bank 1-years’ worth of expenses in cash before I start part-time work. It is my hope for that safety net. I think that should be enough but I won’t really know until I get there…

      As for AQN, you’re not alone I don’t think. I know of other DIY investors adding right now and happy to so given AQN is a regulated business and it’s not like their income is drying up entirely. I’m holding for now, not adding.

      I sincerely appreciate the referrals to the site. It’s fun to run and engage with others like you. That’s probably the best part 🙂

      I look forward to FIWOOT sometime in 2024 – that’s our plan and I will keep you and others posted.

      Stay in touch,
      Mark

      Reply
  9. You continue to grow your dividends at a very good rate. Well done. And you told us how the various markets fared. Can you also tell us how YOUR total portfolio changed in value, including dividends? The BTSX list did very well last year vs the market and it would be good to compare individual portfolios also. I was down 10% in total value in 2022, but grew my dividends by 13.5%. I will take that in a year like the last one.

    Reply
    1. Thanks very much. I’m really focusing on TFSAs for investing now, every year, (have been for 10 years but I focus on that account first) and then after RRSPs are contributed to I do some taxable investing although not very much…

      Only so much money to go around!

      Overall, my portfolio was down about 11-12% in total value since I own many CDN stocks but also own some U.S. stocks and ETFs that are down in value. So, that’s a big # but I don’t focus / have not focused on portfolio value for years (as you know) and instead focus on the meaningful cashflow that my portfolio can deliver. That includes dividends and distributions. I figure once I reach a point whereby the dividends and distributions cover most basic expenses (condo fees, taxes, bills, groceries, etc.) then I can work part-time/work on own terms.

      There is a growing sense of relief in that the portfolio (combined with my wife), from the capital invested, does all the work and I don’t need to do any more heavy lifting (i.e., work) than wanting to work or necessary.

      BTSX in 2022 did very well indeed and I own 10/10 stocks from 2022 list, since I added a very small bit of PPL during the year.

      I also own 10/10 BTSX stocks for 2023 as well since as you know, that list doesn’t change much. I do see AQN cutting their dividend soon but a good thing overall and responsible for management to do so IMO.

      If I look YoY at my income updates I share on this site, 2021 ended with $24,997 and 2022 ended with $29,316 so that’s a difference of $4,319 or about 17% growth. That’s pretty good when I’m down tens of thousands in portfolio value.

      I will be investing in some BTSX stocks again in 2023, but also some lazy XAW for the TFSA. When I have more $$, more CDN stocks for the taxable account later on in 2023 as well but likely lower-yielding stuff like railroads.

      I’ll keep ya posted via the site 🙂

      I appreciate your comments and engagement,
      Mark

      Reply
    1. Holding for now. <1% of my portfolio so taking a wait-and-see approach. I recall guideline from CEO and CFO is coming out next week. The good news is, this company has a lot of regulated assets for income so maybe the next couple of years are rough but then a rebound?? Thoughts?
      I wish my crystal ball was clear 🙂

      Happy New Year to you too!

      You?
      Mark

      Reply
      1. I am about the same. I agree about rebound in the 3-5 year range as I can”t see any gotchas I missed in analysis. Interest rates are going to be a challenge for them to continue aggressive growth and likely a dividend cut but fingers crossed.

        Reply
        1. Ya, I think the price will rebound in time. Very cheap now. I anticipate a 50% haircut on the dividend and likely a very smart thing for management to do, to be honest.

          I continue to own many shares and will hold and see what happens over time. Most of my AQN is in my taxable account.

          Stay tuned Murray 🙂
          Mark

          Reply

Post Comment