February 2018 Dividend Income Update
Welcome to my latest dividend income update for 2018.
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 in our non-registered and Tax Free Savings Accounts (TFSA) for income and long-term growth. Canadian stocks are not all we own but it’s a healthy portion of our portfolio.
In my last post, I shared these dividend raises for early 2018:
After those juicy raises, I got a few more!
These increases continue to occur at a time when our Canadian market has been largely flat for the last 10 years. Yes, sadly, ten years. Is this a lost decade? Do you think we’re in for another one? It’s entirely possible folks and you need to prepare for it.
More bad news maybe. Our Canadian market is down about 3% as I write this post but on a more positive note – the income earned from my portfolio is up for 2018….WAY up. I love it when a plan comes together!
Will it always be this way? I have no idea. But the benefits of buying and holding my 30+ Canadian dividend paying stocks remains the same:
- I can control the portfolio turnover, or lack thereof, with a buy-and-hold approach for many our companies. (Canadian companies that have paid dividends for decades are the same companies paying me as a shareholder today.)
- I don’t pay anyone a money management fee for my Canadian stocks. I buy and hold and reinvest all dividends paid inside our TFSAs. That’s it. Boring – but when it comes to investing boring works very, very well.
- Dividend-growing companies tend to be solid performers over time. You can’t fake dividends for very long. Either a company can afford to pay a dividend or they can’t.
- Dividends help me stay invested. Better still, and I’ve told people for years about this, you should celebrate falling prices as a long-term dividend stock investor. Consider your favourite food in your local grocery store now on sale!
Thanks to dividend increases over the last month and based on our maxed-out TFSAs to start out the 2018 calendar year, our dividend income expected from Canadian dividend paying stocks as part of these updates is approaching $16,100 per year. That’s great. Actually, it’s amazing (I’ll be honest) considering where we were 10 years ago. While great progress has been made things might get even better…
I predict if we keep up our boring ways in another 8-10 years we’ll realize our HUGE goal of earning $30,000 per year from our non-registered investments and investments inside our tax-free accounts. That will be extremely good since if we’re debt-fee by then we’ll surpass our crossover point based on other assets we currently own. Income derived from our investment assets will be > our expenses. We’ll be able to work on our own terms. We will be able to leave any full-time work in the dust – for good.
We believe our lofty $30,000 per year income goal from a few financial accounts remains in reach – as long as:
- We don’t dare touch nor tinker with the portfolio,
- We keep maxing out our TFSAs every year going forward, and
- Just as importantly – we reinvest all dividends paid within our TFSAs so money can make more money commission-free.
Dividends are never guaranteed. There are risks with my approach. This approach is not for everyone but I’m optimistic I can provide another increased portfolio update next month. Stay tuned to find out and thanks for reading.