February 2022 Dividend Income Update
I must say, I love these updates!
Welcome to my February 2022 Dividend Income Update.
But I’m biased. I mean, I’ve been on a path of trying to generate ever growing income for the better part of 15 years now. This is a long-game thing, this investing thing. I enjoy the journey…
What are my monthly dividend income updates all about?
I’ve been getting more questions from readers of late about my journey, what I invest in, why I focus so much on the TFSA and taxable investing account for these updates, so for this month’s update, I will revisit those Q&As.
Mark: I’ve been reading these updates for a few years now and it seems the income is going up every month. Is that really true?
Yes, it is.
My/our monthly income is on the rise thanks to two key factors:
- The dividends paid to us are reinvested every month and quarter, to buy more shares and units commission-free (i.e., money that makes money, can make more money), and
- I contribute to my TFSA, striving to maximize contributions to this account every year. That’s usually about $12,000 invested each January (both TFSA accounts are once again maxed out of contribution room).
I prefer to max out contributions to my TFSA, then RRSP, before investing in taxable accounts.
If we have any money leftover, after maxing out our TFSAs and RRSPs, then we invest in taxable accounts.
Mark: Aren’t you worried that your portfolio is not keeping up with market returns?
I’ve been very fortunate, with the stocks that I own, in that they tend to keep up or beat my Canadian dividend investing benchmark: ETF XIU.
That said, if you are not comfortable with investing in individual dividend paying stocks in Canada, I believe owning XIU is one of the best ETFs you can own: for income and growth.
I actually use XIU to “skim the index” and own what I believe are the top companies in that index although the future of any one company is always uncertain long-term. This is where diversification is important.
You can read these key articles below to learn more about my index skimming approach and some of the best companies to own that collectively and continually Beat the TSX 🙂
Mark: Do you think you’ll surpass your $30,000 per year income target before the end of 2024 like I’ve read about?
I hope so 🙂
Oh course, I don’t know for sure what dividend increases (or dividend cuts) will happen in the future. I mean, I have endured some dividend cuts in the past and changed part of my portfolio accordingly.
Then again, by sticking with many Canadian dividend paying stocks for years on end, I’ve also been rewarded. Some dividend stocks have not only recovered from their dividend cuts but I’ve also received a healthy capital gain as well.
The guys at Stocktrades.ca and I have discusssed this very possibility over the last year or so when thinking about some companies that may thrive coming out the pandemic. In some cases, we were very spot-on!
All this to say, I don’t know for sure (at all!) what will happen in the future. I do know, by sticking to a plan I believe in and keeping a good savings rate for investment purposes, good things should happen over time.
The same can apply for you.
You can read about why I have this $30,000 per year income target on this page here.
Mark: Will you ever share your total dividend or distribution income? I read the reasons you don’t share everything here:
I don’t know, maybe…. Never say never?
I do appreciate readers understanding my reasons but I do share as much as I can!
February 2022 Dividend Income Update summary
- Maintain a disciplined savings rate.
- Do #1 again.
That’s pretty much my process!
With stocks and ETF units DRIPping along nicely, our money is always invested for potential growth.
As of this month, our forward dividend income is $25,864 for the calendar year ending 2022 – what we might earn at the end of this year when all income is talled from a few accounts….
To put that ever growing income stream into perspective and context:
- Part of our portfolio is essentially a job – earning almost minimum wage over a 40-hour work week.
- We earn almost $3 per hour of every hour of every day (income/8,760 hours (24 hours x ~365 days)) even in our sleep. That $3 might not sound like much, but that translates to earning about $71 per day from part of our portfolio; about 50% of that income is tax-free.
Coupled with other income streams, we are getting closer to semi-retirement.
Here are just some of the companies that rewarded me/us this month:
- Real Estate – Riocan Real Estate Investment Trust (REI.UN)
- Financials – Bank of Montreal (BMO), National Bank (NA), Power Corporation of Canada (POW)
- Utilities – Emera (EMA)
I look forward to sharing more updates soon!
My best wishes and thanks for your readership. Ask any questions, at any time!
You can see how close we are getting to our Financial Independence Plan here.
Here are some ideas in how to invest to combat higher inflation (as in now).