July 2022 Dividend Income Update
Welcome to my July 2022 dividend income update – and again – I hope you’re having a great summer…
In case you missed it, last month, I posted this income update by answering a few reader questions.
I’ll do more of the same in this post.
Read on and enjoy, questions in bold font and my answers follow!
July 2022 Dividend Income Update – Q&A
Mark, are you investing in your taxable account as well this year? How so?
In a word: “yes”, in a few BTSX stocks but in also some of these.
From that list, I picked up some AQN and MFC. Those purchases provided a small income boost to this month’s tally and my forward dividend income for the year. Results to share soon!
Mark, are you worried you’re missing out on gains with your dividend income approach?
I actually covered that answer a bit already and you can read my reply here.
As I get older, and approach semi-retirement, I’m more concerned that my portfolio can deliver meaningful, growing income vs. the need to sell any assets.
I’m also focused on the income that our portfolio can generate to cover our day-to-day expenses – that’s always been our primary long-term goal to enter semi-retirement with.
I’m not relying on any 4% rule for semi-retirement.
I believe if you want to know how much you need for retirement, you really need to figure out how much you want to spend, with some margin of safety built-in.
For us that means:
- Our dividend income covers most expenses for semi-retirement to begin, and
- We have our cash wedge established.
And, of course, we have no debt.
Given our mortgage debt is scheduled to be gone in just over two years, well, that’s when semi-retirement is expected to begin. I’ll keep you posted if we decide to accelerate that date 🙂
What is your target spend in semi-retirement? It’s more than $30,000, right?
Yes, it is.
We figure our spend will be about $4,000-$4,500 per month without any major travel or “extras”.
My math tells us condo fees, Ottawa property taxes, utilities, subscriptions, and other monthly recurring bills are likely to cost us close to $2,500-$3,000 per month in 2024 dollars if we semi-retire that year. Food and transportation is likely another $1,000-$1,500 per month on average.
The goal is for our portfolio to largely cover all these expenses above without selling any assets, certainly in the first 5 years of semi-retirement. Our thinking is we will keep our portfolio largely intact throughout our 50s and potentially into our early 60s.
We figure we can pick up part-time work or occassion work to cover the international travel and extras in our 50s.
All told, if we include international travel a few times per year and other desired spending wants, we believe our total semi-retirement expenses will be approaching $6k per month on average. That seems to be a pretty good lifestyle for us and I suspect it would be for others striving for retirement as well, without debt to service. Of course, personal finance is forever personal…your mileage could vary.
We could of course spend more and work full-time longer. That’s not very appealing to us at this point!!
July 2022 Dividend Income Update Summary
Readers, keep your questions coming since I enjoy trying to keep up to every email, every comment and every interaction on Twitter with me as well.
Our July 2022 forward dividend income is now $27,519.
- That’s over $2,000 higher than just January 2022.
- That’s just over $300 more than just last 30 days.
To put that income into perspective:
- Almost half of that annual income is tax-free. Yes, all true my friends. We won’t pay any tax on any income when withdrawn from our TFSAs.
- Our forward dividend income continues to rise every month. That’s thanks in part for three reasons:
- Dividends are reinvested inside our TFSAs, all the time…
- We make new, strategic purchases a few times per year inside my taxable account…and
- We are fortunate to get some dividend raises a few times per year.
- Assuming we stay out of our own investing way (ha!), I anticipate we’ll surpass at least $28,000 in dividend income earned from our taxable account and TFSAs (x2) later this year – well beyond our initial target!!
- $27,519 in annual dividend income translates to earning $2,293.25 per month. A nice base for sure excluding RRSP withdrawals, my small pension, my wife’s small pension and more.
- This income also translates to earning about $75 per day.
Coupled with future RRSP withdrawals that will begin in a few years, we’re getting there.
Thanks for reading and sharing, and another reminder to please bring forward your comments and questions for any future updates!