June 2021 Dividend Income Update
In our prolonged low-interest rate environment, I have every reason to believe that early retirees (or folks working towards it…) like myself should largely ignore fixed income.
So, in owning more stocks than bonds and by reinvesting my dividends paid today, I hope to ride the returns of many Canadian dividend paying stocks. Via dividends, I will get paid in the process. I will rely on my growing stream of dividend income for any early retirement. That’s the plan – always has been.
Money compounding away
A decade ago now, I wrote about my decision to buy more Enbridge stock.
In those very early posts for this site, I was just hoping to be able to reinvest my dividends paid from this one company in order to buy more shares commission-free. My how things change if you simply let some dividend paying companies do their work…
In this past month alone (June 2021), I received dividend payments from the following key stocks inside my taxable account and from our tax-free (TFSA) accounts, and DRIPped the following shares:
- Canadian Utilities (CU) – DRIPped 1 share
- Enbridge (ENB) – DRIPped 11 shares
- Fortis (FTS) – DRIPped 4 shares
- Great West-Life (GWO) – DRIPped 3 shares
- Manulife (MFC) – DRIPped 2 shares
- RioCan REIT (REI.UN) – DRIPped 1 share
- Smart REIT (SRU.UN).
In fact, when it comes to Enbridge, we now own enough ENB stock such that when dividends are paid – ENB dividends cover our condo utility bills (heating, cooling, gas, and water bills) every month.
These commission-free shares earned above this month ignore the other months I/we get paid from other stocks, including Telus (T) and Algonquin Power (AQN). Both companies announced dividend increases in May 2021. Those increases will only accelerate our dividend income journey using our taxable account and TFSAs for investing.
In the coming months, more dividend income increases can be expected specifically from many Canadian banks. Our big-6 banks are sitting on mountains on cash, ready to be distributed to shareholders by Christmas.
What about your RRSP assets?
A reminder I don’t include any RRSP income in these dividend income reports since a) I’ve always reported it this way and b) RRSP assets are increasingly, mostly, U.S. assets. For sure, there is an income stream to be tallied from RRSP assets owned. I/we hope to leverage that to “live off dividends and distributions” in the coming years as I/we enter semi-retirement.
June 2021 Dividend Income Update
With stocks and ETF units DRIPping along nicely, our money continues to compound away.
Assuming no dividend cuts occur, and dividends continue to compound as they might, we have a great shot at earning $22,500 this calendar year in dividend income, from the capital invested inside our TFSAs and a non-registered account. As of this month, our forward dividend income is at $21,959.
To put that passive income in perspective:
- That’s like earning $2.51 per hour of every hour of every day (income/8,760 hours (24 hours x ~365 days)) even in my sleep.
- Part of my portfolio is essentially it’s own job: earning $10.56 per hour (income/2,080 hours (40 hours x 52 weeks)). Then again, some of that income is 100% tax-free (thanks TFSA).
I share these updates, this way, to demonstrate the power that any committed plan can deliver with time. As always, I look forward to sharing the next update with you and any feedback you have on this one!
You can see how other successful investors are using low-cost ETFs or dividend investing (or both) to fulfill their retirement income needs here – there are dozens of essays and case studies to check out!
Check out some great questions asked, and answered by me, on my dedicated FAQs page.