July 2019 Dividend Income Update
“Do not save what is left after spending, but spend what is left after saving.”
“Wall Street makes its money on activity. You make your money on inactivity.”
“The stock market is a device for transferring money from the impatient to the patient.”
– all quotes from, you guessed it, Warren Buffett.
Simple, sage and time-honoured investment advice by someone who knows a thing or two about successful long-term investing.
These are things I try to employ in our investment plan, and so far, I believe that approach is working.
Save first, then spend
This has been our approach for years, and we’ll keep it that way for as long as we can.
Although we’ve blown part of our 2019 financial goals to smithereens lately, I do believe we can recover a bit later this year.
By saving first, then spending thereafter, we get our money working for us sooner than later (even if we aren’t perfect all the time).
You make your money on inactivity
I wouldn’t have believed this over a decade ago, but I certainly do now.
The sloth-like energy I expend to stay invested (in my basket of dividend-paying stocks and low-cost U.S. ETFs) is really starting to pay off with this extended bull market run. With subtle check-ins on the portfolio, it seems there is little progress. Looking back years later, it’s motivating and gratifying to see that owning a $1 million investment portfolio (outside any existing workplace pension assets, excluding any of our home equity) may actually occur.
If you want to know what I own and learn about my boring approach to successful investing you can find more details on these pages here:
The stock market is a device: it transfers money from the impatient to the patient
Akin to the advice above from Mr. Buffett, while I’ve learned there is nothing magical about dividends per se they are very darn good for my wallet.
As we march towards our “magical” passive income goal of earning $30,000 per year from Canadian dividend stocks, inside a few key accounts, I remind myself that dividend income is our money to keep and spend as we please.
With dividends I don’t have to worry if the company I own will put the cash earned to great use – killing debt or making acquisitions or other. As a shareholder of the dividend friendly company, I get some of their earnings to do as I please. I don’t have to sell stock shares unless I want to either.
What are some of my favourite Canadian stocks?
You’ll find some of them here: I’m a big fan of dividend friendly companies like these.
Where are we now?
As at the end of July 2019, we’re on pace to earn more than $19,000 this calendar year from our tax-free and tax-friendly account (TFSAs and non-registered respectively) as long as the companies we own continue to pay dividends at the rates they do. Who knows? We might get a dividend increase or two from our portfolio before the end of December 2019…
Like last month, to increase our dividend income by over $100 over the previous month, I did nothing more than stick to our plan and hold the same (boring) stocks as the previous month, and the previous month before that – reinvesting dividends paid to buy more shares commission-free.
You can read about the pros and cons of dividend reinvestment plans here.
Where will we end up in a few months? I have an estimate in mind based on the chart I use to track our dividend income progress and via this blog I will absolutely keep you posted!
How are your investing plans coming along? Use dividends for income? Use ETF distributions for income?