June 2018 Dividend Income Update
Welcome to my latest dividend income update.
For those of you new to these posts on my site, every month I discuss our approach to investing focusing on Canadian dividend paying stocks. We believe buying and holding a number of Canadian dividend-paying stocks in our tax-free (thanks TFSA) and non-registered accounts will, over time, provide some steady monthly income for future wants and needs in retirement.
By adding this income to our RRSP assets (that focus on U.S. stocks and low-cost ETFs), we believe we’ll have a comfortable retirement once the mortgage debt dragon is slayed!
Last month, I answered a number of reader questions – and more reader questions pour in.
Mark, are you worried about over-saving? Owning a $1 million portfolio seems to be more than adequate. Thoughts?
Great question (and a pointed one at that)!
For your honest question here is our honest answer – this is our goal and not anyone else’s. So, while it may make some sense compare our needs (and wants) in our financial future to someone else, the reality is, it doesn’t matter.
Our financial goals may or may not be the same as others. That goes for personal finance or anything else in life. Therefore when it comes to money management we save, we invest and we spend money that is leftover. That might not work for you – but that’s how we live our life. We intend to follow this approach until we realize our big portfolio goal.
Here is a question via Twitter:
Thanks for your question. You’re right, you won’t find details about that on this site or within any one blogpost because I feel I already disclose a great deal about our financial life online. I will continue to write about our dividend income goal, various money subjects over time but I hope you respect my decision. Should you have specific questions about stocks, ETFs, bonds, where to find great deals on a variety of things – let me know. I’m happy to help and offer a perspective!
I have a clarification question or two… when I look at your “goal chart” since 2009, every year is indicating your annual income from dividends. So these figures every year are actual income that you’ve earned from your stocks? I understand you are aiming for $30,000 annually in dividends. I realize you may keep some cash (earned via dividends) in a cash account but what I’m trying to get my head around is….is this annual income from dividends only OR from reinvesting some of these dividends? I’m not sure I’m asking these questions very clearly!
Hopefully this can help clarify.
As you have referenced, our longer-term dividend income goal is $30,000 per year from Canadian dividend paying stocks. These updates provide evidence that we are more than halfway there; which is awesome.
To answer your question, re: is this annual income from dividends only OR from reinvesting some of these dividends – it’s both.
Our income keeps growing every month inside our TFSAs and non-registered account largely because of reinvested dividends. Money that stays invested can make more money over time. There is a modest ‘bump’ in the dividend income earned each year, between December and January in particular, because of maxed out TFSAs, and stocks purchased each January that pay dividends. Otherwise, beyond the January contributions, pretty much all of the dividend income is growing thanks to the power of compound growth.
As a footnote to the reader’s question, it looks like we’re going to surpass $16,500 in dividend income this calendar year in some key investing accounts by doing nothing but staying invested. I’ll keep you posted (including if we surpass that milestone) on this journey in the coming months.