Welcome to my first dividend income update for 2016. For those of you new to these posts on my site, every month I discuss my approach to investing using Canadian dividend paying stocks and Exchange Traded Funds (ETFs), and how reinvesting the dividends and distributions paid from these Canadian holdings are helping us reach financial freedom.
It’s easy to be pleased with the progress we’ve made over the last few years, getting our financial act together, largely thanks to a good (an improved) savings rate:
Prior to 2008, I wasn’t focused on dividends or ETFs or much of anything related to our portfolio. The Great Recession was definitely a rude wake-up call and time to re-evaluate things. I started this blog in earnest early in 2010 and I’ve been using it ever since to chronicle our saving and investing ways to financial freedom.
- In 2010 we began the transition out of (costly) big bank mutual funds and into lower-cost, Exchange Traded Funds. That transition was completed later that year.
- In 2011 we continued contributions to TFSAs and RRSPs, along with paying down our fat mortgage debt. We also invested using full Dividend Reinvestment Plans (DRIPs) in some companies like Bank of Nova Scotia and Fortis.
- In 2012 we successfully maxed out our TFSAs and took a balanced approach to our financial goals, saving for a great trip to take in early 2013.
- In February 2013 we returned from that trip, Costa Rica, after two weeks of learning to surf, visiting beautiful rainforests, hiking and drinking Imperial beer on the warm, vast, gorgeous beaches in Santa Teresa. I want to go back…
- By the end of 2014 I learned to appreciate the merits of indexing more, and started to embrace this approach as part of our investment composition in registered accounts. We also started saving for home renovations to be undertaken in 2015 as well as another overseas trip, to Scotland for two weeks.
- 2015 was a big year for us, with lots of moving parts financially. We renewed our mortgage at a rock-bottom rate thanks to our star mortgage broker, we took the aforementioned trip to Scotland, we completed the ensuite bathroom renovation we wanted (and needed) and we recently set new goals for this financial year.
I have no idea what 2016 will bring, hopefully health and wellness first and foremost. I do know on the financial front keeping a modest savings rate this year should lead to good financial outcomes. I also know that having some money left over to enjoy is important to us, very important.
Based on our chart, should new capital be invested largely as planned, I don’t give in to buying new, shiny toys I don’t need, and as long as dividends and distributions are reinvested to buy more shares and ETF units commission-free, I think we have a shot of reaching some of these passive income milestones in the years to come. This month, we’re at just over $12,000 and by the end of this year I’m optimistic we could hit $14,000.
I’ll keep you updated where we get to later this year. Thanks for reading and sharing.
What do you make of our financial plan? Do you have a similar financial plan in place?
$12K is great and your goal of hitting $14K is even better. This downturn is a good chance to add more of good quality dividend stocks. After all, you can buy more than several months ago. Thanks for sharing!
Absolutely, any correction in price is a good thing – at least for the next 30 years 🙂 Thanks for following and the support.
WOW I’m impressed by all that you accomplished in 2015. I have so many renovations to get done around here my head spins. Hopefully this year I can finish the bathrooms, flooring and the new kitchen. I know my wife keeps going on about finishing the basement so our son has more room to play so that’s on the upcoming agenda too. We’re planning a trip back to the UK to see family and then a holiday to a travel destination flying out of the UK while we’re there. It’s been 8 years since I’ve been home. Well done with the dividend income… you must be proud of your accomplishments.
Thanks Mr. CBB. Over the years, we started to get our financial act together and it feels good. There are a number of other health-related goals I have but it’s nice to see some progress over the years. 2015 was a good year financially so I hope more of the same in 2016.
Our trip to Scotland was great in the summer and I’d like to go back to the UK at some point – tour England. Maybe in a few years. Good luck with your travel plans.
Thanks for sharing Mark. You’re doing wonderful bud. Your family will be in a great financial state in a couple more years so keep it up. It’s a great feeling travelling on this journey. Life changing for sure. I know how you feel. It’s very enlightening. Let’s appreciate each day and keep it up bud. Cheers Mark.
…the plan is coming along. We simply need to stay the course, focus on our health and hopefully things will work out. We are enjoying the journey for sure. Thanks for reading and the support.
A forward looking chart like this really great. 14K by year end and 32k by 2023.
Living in Belgium, I opted for efts that do not per dividend but reinvest internally. Not being able to show a graph like this is a downside…
Enjoy Life while rolling the snowball
Good to hear from you Amber. That’s the goal, hopefully, by 2023, we’re close to calling it a day or working on our own terms. We’ll see!
Nice work Mark.
Keep investing, reinvesting and building the base. The income is sure to look after itself then.
Thanks RBull. The plan is coming along – just need to stay with it and enjoy the journey as well – and we are 🙂
I know you are, and I totally agree.
Good on you.
Awesome progress and well on your way towards the end goal. I love seeing a chart rising in the right direction like yours!
I like the chart too – but I’m biased 🙂 Thanks for reading and supporting the site Special Agent.
Congratulations on your progress towards reaching your financial goals. A slow and steady accumulation of income producing assets, coupled with reinvestment of those distributions, is what I am doing as well. I would imagine that when you are closest to the finish line, your organic dividend growth and dividend reinvestment will have a much larger impact than contributions alone – the power of compounding is a beast.
I hope so DGI, re: dividend reinvestment power. We’ll still many years away and lots of things need to come together but I believe the plan is working.
Love the chart Mark. $14,000 forward dividend by end of the year would be fantastic!
It would be great – I hope we reach that milestone! Thanks for the support.
Your dividend income stream looks great and is definitely on track towards financial freedom. Congratulations! My portfolio return looks very similar. $12000 returned last year with a projected $14000 this year. I’m a little nervous about the banks exposure to the oil and gas sector, and hopefully we’re near the bottom.
Thanks Brendon. The plan is coming along. I’m not too worried about the stock market, I have no control over what will or won’t happen. I simply need to save, invest and then enjoy my life – what will be is what will be!
Good luck on your saving and investing goals for 2016.
I just heard today that Canadians are losing interest on mutual funds and ETFs. I just started on ETFs this year. Should I be worried?
Since the Canadian dollar is low, I am not interested in buying US stocks now. My goal is to maximize the TFSAs of my spouse and mine in the next two years. Another goal is to transfer all of the Investors group RRSP to self directed ones.
You are doing a great job with your investments and motivating others.
Smart call on maxing out the TFSA BRS, your future self will thank you!
If I understand your comment correctly, I think investors are becoming impatient with the stock market – so yes, I would agree. Should you be worried? No, since if you’re in your asset accumulation years you want the stock market to crash/dive/correct/fall. This means you’re shopping when things are “on sale” – this is a good thing 🙂
Even with a Conservative projection, your doing a great job! I believe you’ll see higher growth. Yes, it’s your future Income that will allow you to achieve your ultimate goal.
Thanks Cannew, I appreciate the support. I feel we’re on a good path and we’re not sacrificing today to do so.