March 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 in some key accounts. 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.
This month, we also received another nice surprise:
(This makes me believe a dividend increased from Power Corporation might be on the way later this year as well…we’ll see!)
Thanks to more cash flowing from the companies we own, we’re on pace to earn $16,150 this calendar year from Canadian dividend paying stocks held in our tax-free (TFSA) and non-registered accounts. Again, after many, many years of diligent saving and investing – to put that income in perspective – we believe that income could pay for the following today (if we wanted it to):
- All home property taxes this year, and every year going forward for the rest of our lives. (I just paid our first interim tax bill for 2018, that was $2,100. Another bill for another $2,100 will be due in June.)
- All home utility bills – for life. (Our heat, hydro, water, internet, cell phones, other utility bills cost us anywhere between $600-$650 per month; about $7,800 per year. With the dividend income earned this year, and likely some dividend increases in future years, we should be able to keep up with inflation. Dividends earned from various heat, hydro, telco and other stocks are intended to cover our utility bills – for life.)
Beyond property taxes and utility bills to operate our home, dividends will also need to cover more than that if we want a modest retirement.
I’m optimistic our dividend income, if it can grow in the coming 5-10 years (basically double what it is today (a reminder our goal is $30,000 per year)) will easily cover the following:
- All home maintenance and improvements/condo fees ($600 or so per month)
- All auto needs ($300 or so per month which includes saving for a used car every 10 years)
We’re now more than halfway to our goal to largely “live off dividends” – but there is considerable saving and investing to do.
Ideally, our goal is to use dividends (and distributions) earned from our investments each month to cover all home, personal, and day-to-day expenses.
When that occurs, and we’re debt-free, we’ll stop working full-time since we know even some small part-time work or seasonal work will be enough to sustain our lifestyle for decades to come. We’ll also have some small workplace pensions to draw from in our late-50s and 60s and beyond. Government benefits will kick in in our 60s for some extra inflationary insurance. We’ll have options about when to take our Canada Pension Plan and when it comes to managing our personal finances.
Stay tuned for my next dividend income update and thanks for reading.