January 2024 Dividend Income Update

January 2024 Dividend Income Update

Well hello, and welcome to a new dividend income update.

As many readers know, we have maintained a hybrid investing approach for over 15 years now, almost as long as I’ve been running this site!

  1. We invest in Canadian and U.S. dividend paying stocks – that provide dividend growth. 
  2. We invest in low-cost equity ETFs – that deliver a bias of long-term growth for extra diversifcation. 

You can read more about what we own and why when it comes to individual stocks on this page here.

We do not invest in any Bitcoin. 

We do not own any bonds or GICs.

We do not own any real estate assets beyond our primary paid off home.  🙂

Mortgage free!!! Now what???

I/we focus on building a moaty stock portfolio, holding those stocks where I believe that makes sense for us, and then using low-cost ETFs for everything else. 

Weekend Reading – Building a moaty stock portfolio

January 2024 Dividend Income Update

As we start a new year of monthly income updates, another set of reminders before my updates this month and this year:

  1. I do not post these updates to announce that our approach to investing is superior to anyone else. Hardly. Rather, I have and will continue to share these updates as a path to chronicle both our financial independence journey and to share what’s working or not, in that journey. It is my hope you can use this information to make your own personal finance decisions to your benefit. 
  2. Through these updates, I am never suggesting that such stocks or ETFs posted on this site are for your direct purchase. Heck, I know lots of investors that own bonds, GICs, Bitcoin, real estate and more – and they’ve been very successful at some or none of these things in their own way! Instead, I offer up some insights into what I/we own, when and why, as it relates to our financial objectives – including when circumstances change. 
  3. Finally, related to that point, I share these updates to demonstrate that any meaningful long-term savings rate, including a long-term investing thesis you can stick to, can deliver wonders over time. It’s never been about all high-yield stocks and it’s certainly never been about only dividend stocks in our portfolio. Never has been for 15 years. In fact, I don’t know of any DIY investor that has not changed their approach, asset allocation, added new ETFs to the mix/dumped other ETFs over time, etc. to modify their portfolio over time. Failure to adapt and revisit how you’re investing is just silly. Time has a way of forcing all of us to challenge our assumptions, and make changes, usually for the better! 

As we put month one of 2024 in the history books, I’ve been reflecting a bit this month on our 2024 plans – beyond any financial goals.

Yes, we need money to live from of course but as we consider making some life-work changes at some point this year, it’s been very important to us to consider how we want to spend our time (and money) to ensure we’re making key decisions that add value to our lives.

Whether our workload later on this year applies to full-time work for another few years or part-time work or somewhere in between both my wife and I believe it’s very important to consider any decisions that strive to optimize our time and energy.

By far, the most common complaint I’ve read about in retirement is boredom and not having anything to do. Worse still, maybe feeling irrelevant. For many, long hours at work and raising kids gives some folks their purpose in life until retirement occurs and raising kids is no longer required.

Here are some things we’re considering answers for:

  1. Planning (some of) our time – what our days as individuals or a couple might look like.
  2. Having some purpose – what motivates us at this point in our lives, and why.
  3. Staying active – I aspire to become more fit (via walking/hiking, cycling, golf, and other activities too) so I want to consider what that may look like including the expenses of. 
  4. Unstructured time – after decades of working within rules, I look forward to embracing some form of unstructured time – I like planning but to a point.
  5. Considering hobbies – I want to be open to some new, available time, to pursue new interests or hobbies that might need to be unearthed. 

When it comes to semi-retirement time management or part-time work, I have far more questions than answers at this point but I will keep you posted of course…we have 11 months to go in 2024. 🙂

When it comes to second part of this equation, some things are becoming more clear:

Part-time work + dividends = FIWOOT

  • We will spend our taxable income/dividends generated from our non-registered accounts for the coming years, including selling any assets as needed for tax-efficient capital gains.  
  • We will make any relevant RRSP withdrawals as needed, including selling RRSP assets over time. 
  • We will leave other invested assets such as our TFSAs in particular intact for decades to come.

January 2024 Dividend Income Update

Unlike other advisors or money experts, we continue to believe cashflow is king. 

“Growth of course, is great, if you know when that is going to happen.” – My Own Advisor.  

We continue to believe higher dividend and distribution income (yes, from ETFs) across our portfolio, over time, will be an important near-term element to fund some of our semi-retirement needs and wants.

You can of course make your own dividends anytime you want.

As of this month, here is our Projected Annual Dividend Income (PADI) for this calendar year:

January 2024 Dividend Income Update

You’ll see we’re inching closer to a new barrier, earning $45,000 per year from part of our portfolio, mostly from our RRSPs.

I suspect even without any RRSP contributions that we hope to make later this year, we’ll surpass that milestone in the coming months thanks to reinvested dividends alone. 

January 2024 portfolio changes

None. 

Thanks to the recent BlackRock (BLK) dividend increase, our RRSP dividend income rose a bit. We also got a small 7% raise from holding Canadian National Railway (CNR) in our portfolio as well.

Leveraging a total return mindset for each of these holdings in our portfolio, in particular, whereby the sum of dividends and capital gains really matters over time, we’re optimistic that our financial future will be as friendly as the past holding these companies in our portfolio.

Yet there are no guarantees. The financial future is always very cloudy with just a few stocks so please do consider owning a number of stocks in a few different sectors if you are going to cherry-pick some favourites.

January 2024 Dividend Income Update - pic 2 BLK, CNR

Source: Portfolio Visualizer.

For the coming years, I will continue to keep a slight bias to dividend growth stocks to complement our existing growth ETFs until the dividend income stops rising. 

Of course, you should not have 100% of your portfolio in stocks – or maybe you should!!

Should you have 100% of your portfolio in stocks?

Thanks for reading and I look forward to your portfolio updates, whatever they may be!

Mark

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. 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.

20 Responses to "January 2024 Dividend Income Update"

  1. Hi Mark,
    I always enjoy reading your updates and I appreciate your insight into investing. I’m not a 100% dividend investor, I go mostly to ETF’s with a global split.

    I was disappointed to read that you’ve been getting negative feedback. While I don’t always agree with you, I like your content. Keep up the good work!

    Reply
    1. All good in my book, Chris. I don’t always agree with all readers and comments as well but I’m very open to listening and change.

      I firmly believe if all DIY investors are meeting their goals, whatever they are, that’s all that matters really. 🙂
      Mark

      Reply
  2. I had DRIP in all my accounts but are you saying to eliminate it in the taxable and RRSP accounts? So you decide how to reinvest the dividend in these two accounts?
    If stocks are sold but the cash is kept in the account but reinvested will this still trigger taxes?

    Reply
    1. It’s a personal decision to DRIP in one account, some accounts or all accounts.

      I got tired of tracking my adjusted cost base in my taxable account so for a period of time, I turned it off.

      Like this post mentioned, I won’t be touching my TFSAs for likely 20 years so might as well reinvest all shares or ETF units.

      When stocks are sold, in a taxable account, capital gains can apply. Taxable investing can have ongoing tax consequences.

      Hope that helps.
      Mark

      Reply
  3. Congrats and I’m sure you will blast through hat 45K barrier this year Mark…100% invested in dividend paying and growing blue chip stocks
    here, which are spread across all the big sectors. Also have a 1 year cash wedge just in case, but haven’t had to use it and hopefully never have to as our portfolio has kept pace with inflation and then some. Recently retired and reevaluating our portfolio as my wife still has 3 years to early retirement.
    Would love to see an article or perhaps be steered to one that talks about moving towards a monthly steady income stream as opposed to portfolio building. What has worked for others and what might be best tax wise etc. I already own some higher paying closed end funds e.g. eit.un as well as monthly divided payers like AP, SRU etc. Wondering what else is out there that would sustain a withdrawal in perpetuity. Wondering if you might be looking at something like this or if it is likely too early as you are just contemplating semi retirement and I am just finishing 10 years of it before I can even look at govt pensions.

    Reply
    1. Thanks very much – we are getting there…

      Hopefully a few more dividend raises put us past $45k per year soon…we’ll see.

      From all the successful retirees I’ve chatted with over the years, Lou, all these savvy DIY investors have a cash wedge (just in case). Some have 1-years’ worth tucked away (for expenses), some have 2-years and even some have closer to 5-years if you can believe it with a 2-3 year GIC ladder. Everyone seems a bit different on their risk tolerance, etc. but certainly a common denominator for all successful DIY investors (stocks, ETFs, real estate, etc.) have cash on hand. It’s been a very good lesson for me too over the years.

      I will absolutely take you up on that offer.

      The hard part to write an article like that is there are so many ways and variations how to earn income from your portfolio. Some examples:
      1. Live off dividends
      2. Make your own dividends – sell assets
      3. Use a bucket strategy
      4. Have “enough” passive income from dividends, ETFs, real estate etc. whereby you don’t sell anytihng….and on and on.

      For the most part, what I’ve seen for “a withdrawal in perpetuity” is #4. Your portfolio is large enough whereby even with a 2-3% withdrawal rate of stock dividends + ETF distributions you never really touch the capital. Depending on your spending needs, that portfolio for some folks using starts at about $1M or so and can go up (to what I’ve seen from readers/folks at Cashflows & Portfolios) into the $4-$5M range….

      Have you seen some of my case studies? 🙂

      https://www.myownadvisor.ca/how-much-do-you-need-to-retire-on-5000-per-month/

      https://www.myownadvisor.ca/how-much-do-you-need-to-retire-on-6000-per-month/

      Hope that helps a bit but do reply with some specifics if you wish.
      Mark

      Reply
  4. 100% stocks here with four years to go to retirement. We have about 1/8th of the portfolio in non-dividend payers (but not ETFs), including my work group RSP. We will eventually shift those to buy more of our blue chip dividend payers. I don’t see us ever getting into ETFs, as our goal is to keep building a dividend growth portfolio of banks, telcos, pipelines and insurers that will continue to raise dividends (somewhat) inline with inflation. We’re not too fussed about market pullbacks, but yes, dividend cuts or the lack of a raise is something to keep an eye on. Between our government pensions and my wife’s indexed DB pension I think we’re taking an appropriate level of risk.

    Time will Tell.

    Go forward dividend income now $51,600 across all accounts as of end of January.

    Reply
      1. Hi James, my wife and I retired in 2020 with a 100% stock portfolio and her DB pension as well. I switched to investing in Canadian dividend growers in 2018 and by 2021 had a dividend income of 53K. Sounds like you are investing in the correct stocks to grow your income, we are now at 73K with no money added since 2021. You will be amazed at how fast your income grows if you keep an eye on dividend increases and adjust your stock selections as necessary.

        Reply
        1. Awesome, Howard. Congratulations on your plan and approach.

          Great work staying the course: “I switched to investing in Canadian dividend growers in 2018 and by 2021 had a dividend income of 53K. Sounds like you are investing in the correct stocks to grow your income, we are now at 73K with no money added since 2021.”

          Mark

          Reply
        2. Thanks for your comment Howard! Sorry I didn’t reply sooner.

          It’s great to hear from those with some experience, especially in a similar timeframe to what I’m looking at today!

          Much appreciated,
          ~James

          Reply
    1. Wow, nice work.

      That’s impressive.

      “100% stocks here with four years to go to retirement.”

      Yup, I know a few (not all) DIY investors that invest this way…but they also keep a sizable cash position too just in case…

      Nothing wrong with a basket of banks, telcos, pipelines and insurers (I’m biased) in that some might offer much growth if they continue to funnel dividends to shareholders. Just the way it goes. That said, I do and have always liked a good part of our portfolio as dividend paying and dividend growth stocks. I’ve been posting that here for 15 years. LOL.

      “Between our government pensions and my wife’s indexed DB pension I think we’re taking an appropriate level of risk.”

      I would also say any workplace pension, DB, is a “big bond”. Very wise to take some equity risks for growth because of that.

      Onwards and upwards beyond $51,600 for you!!
      Mark

      Reply
  5. Hi Mark
    You mention a hybrid approach where you have dividend stocks and low cost ETFs. Are you still buying individual stocks or are your new purchases ETFs? I too have dividend paying stocks and only recently started purchasing ETFs. Some readers here buy only one or two or three ETFs per account type. Going forward, would it be a good strategy to buy only ETFs with any contributions made? If for example you like 3 ETFs in, let’s say, your RRSP, would you simply divide your contribution into 3 and buy all three equally? For the existing stocks, would you continue the DRIP or take the dividend cash and reinvest in ETFs? Are there dividend paying ETFs and if yes, which ones would you recommend?

    Reply
    1. I still do a bit of both, Pat, some stocks and ETFs.

      Lately, I’ve been buying more ETFs to offset my CDN stock holdings and diversifying away from Canada. I’ve done that in recent years.
      https://www.myownadvisor.ca/lessons-learned-in-diversification/

      I think selection stocks or ETFs, is a personal choice. I have mentioned for years on this site, when in doubt, own low-cost diversified ETFs. There are a few I like but those are my preferences from the 1,000+ now available.

      https://www.myownadvisor.ca/etfs/

      Usually simple is better when it comes to investing. 🙂

      Eventually, all income from stocks and ETFs will be taken as cash but I continue to focus on just DRIPs inside my TFSA.

      You can check out some other links on my site for Dividend ETFs, etc on that ETFs link above.

      Ask away!
      Mark

      Reply

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