May 2024 Dividend Income Update

May 2024 Dividend Income Update

Hey Everyone,

It’s a newish-month (more than halfway through June!) and that means it’s due time for another monthly dividend income update…happy to report May 2024 results today. 

For new and established readers, this is our monthly update to share how we are progressing with our hybrid portfolio that is designed to fund semi-retirement in the coming years:

  1. We invest in a mix of Canadian and U.S. dividend paying stocks – that deliver income (and some growth) into our accounts.
  2. We invest in a few low-cost equity ETFs – that should deliver some long-term price appreciation. One example is tech-ETF QQQ. 

May 2024 Dividend Income Update

As a follow-up to the April 2024 monthly update, I thought I would answer more reader questions and then share a brief update on our cash position/cash wedge plans that I wrote about in the previous years – as a means to sheild part of our portfolio from any major market meltdown, including rising tech stocks! 

Mark, you write about XAW ETF quite a bit. How much do you own now?

Well, I don’t share everything on this site for privacy reasons but I can say XAW has been and continues to be our single, largest holding, approaching 10% of our entire portfolio value at the time of this post. 

Then and Now – XAW

A reminder we own XAW for ex-Canada investing. I believe it remains a nice lazy way to own a world of stocks (beyond Canada) and earn the returns of those global stocks without any stock selection whatsoever. 

Mark, there continues to be many dividend investing vs. total return vs. other ways to invest debates.  Has your position changed on that? How you invest?

Nope. 🙂

I continue to believe our hybrid investing plan will help us realize some important income goals in the coming years.

I will be happy to keep everyone updated about what’s working or what could be better as we explore semi-retirement. 

I firmly believe growing cashflow from your portfolio is king. 

I think I read in your updated Financial Independence Update that you think you could spend $70k-$75k per year with 3% sustained inflation over time and still not run out of money? Am I understanding that correctly? Can I ask where that money is going to come from?

Financial Independence Update

Yup, those are our projections.

We could likely spend about $70k or just a bit more, as of early 2025, and never work again assuming 5% annualized portfolio returns and using 3% inflation for the coming 30-40 years.

Is that all going to happen, in a linear fashion?

Are we going to stop working entirely soon?

I highly doubt it.

This is why I firmly believe the process of planning is key to your cashflow and portfolio projections and why I personally re-run my own math every few months – because I can. 🙂

The more realistic path for my wife and I is we don’t “retire” from all forms of work at all in the coming 1-2 years but rather transition to semi-retirement by working part-time in the coming year or so. My wife has already started to work 3-days per week and loving it. I am naturally very happy for her. I hope to find my own transition path in the coming year or so to join her. 

Can I ask where that money is going to come from?

In theory, if we needed that cashflow in early 2025, that income would come from a mix of 1. RRSP withdrawals, 2. my approach to “live off dividends” from our taxable accounts, and 3. some small withdrawals from my corporation too. 

In any early retirement years, I will be far too young to tap my pension income, my wife’s DC pension, CPP or OAS as any income sources – but they are factored into our long-term retirement income projections for sure…

May 2024 Dividend Income Update – Building the Cash Wedge

Readers might recall this post last fall:

The Cash Wedge – Managing market volatility

In that post, I wrote the following:

“For investors building wealth, while tanking markets are favourable for owning more stocks at lower prices, the inverse is true for folks decumulating their portfolios in semi-retirement or retirement. For anyone drawing down their portfolio, a bad set of market returns can be a admirable foe to fight. Any portfolio down in value, without a cash wedge, may also be a double-whammy if you consider inflation:

  1. You are forced to withdraw from your portfolio when asset values are down, and/or

  2. You are forced to withdraw from your portfolio when inflation could be higher – eating into any purchasing power.

(#1 is bad enough but when combined with #2 it can be disastrous.)”

To fight any future stock market calamity, I’m preparing now: we are working towards keeping about 1-years’ worth of expenses in cash ready for 2025 if we really wanted it/needed it. 

At the time of this post, we keep our cash in these primary personal accounts for these reasons:

  1. Taxable accounts – a bit of money/cash is readily available (i.e., emergency, other).
  2. TFSAs – cash is available to be strategic to buy more equities over time, and
  3. RRSPs – cash/cash equivalents are home to fund some upcoming RRSP *withdrawals without touching the capital if needed. 

*In the very near-future, RRSP cash/cash equivalents will be ready such that if we wanted to make any RRSP withdrawals in 2025 – we could – without selling any stocks or equities in the process.

RRSP cash withdrawals will be ready in the form cash-alternative ETFs or money market ETFs.  

May 2024 Dividend Income Update Summary

In May we received dividends from some of these companies:

  • Bank of Montreal (BMO)
  • Emera (EMA)
  • National Bank (NA)
  • Royal Bank (RY)
  • Waste Connections (WCN)
  • Walmart (WMT)

Depending on where we own such stocks, some dividends were reinvested. 

Also last month, a few companies we own hiked their dividends, examples include but are not limited to:

  • Telus (T)
  • Bank Montreal (BMO) 
  • National Bank (NA)
  • Royal Bank (RY)
  • Sun Life (SLF)

Without buying anything last month, these dividend hikes increased our projected annual dividend income by over $600. 

The annual dividend income is up about $4,000 over this time last year. The chart I maintain is on this page. 

So, here is what the projected annual dividend income could be in 2024:

May 2024 Dividend Income Update

To put this monthy income update into perspective:

  • That’s averaging about $3,820 per month.
  • Since I like to treat part of our portfolio like a job, working for us that never gets any vacation (!), this portfolio job equates to earning about $22.04 per hour (income/40 hours per week x 52 weeks).
  • We earn about $5.23 per hour of every hour of every day (income/8,760 annual hours) even in our sleep. 

A reminder I share these posts not to brag (hardly) nor to replicate what I am/we are doing.

I know of folks that are just starting out on their investing journey in stocks and ETFs earning less $1,000 per year.

I know established DIY investors that are earning over $100,000 per year from their portfolio.

Everyone is on a different financial path. That’s A-OK.

We all start somewhere to define our own journey and adjust it along the way. 

A final reminder this is our projected annual income until the end of December 2024, mostly from taxable investing and from our RRSPs. It excludes all TFSAs. 

I hope to report a higher June tally since I might put some cash to work inside a higher interest savings account or investing in more stocks or ETFs, which might push our June total incrementally higher. 

Stay tuned!

I hope you had a good investing month. 

Mark

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

14 Responses to "May 2024 Dividend Income Update"

  1. I am surprised my total return on investment reports are low percentage whereas the simple calculation shows consistently above 12 % gain.

    Do you have a explanation of total return on investment? I am a hybrid investor like yourself with a chunk invested in in ETF as well as 18+ individual Canadian stocks and a small portion of American stocks. Like you, I’m mostly interested in dividend growth and low vol, high dividend growth, low yielding stocks.

    -Christopher

    Reply
    1. There is a great chart on my Dividends page from HonestMath = what total return means.

      https://www.myownadvisor.ca/dividends/

      I’ve been a hybrid investor for many years and don’t see any reason to change to be honest other than potentially selling some USD stocks in the coming years and moving that into XAW. Will continue to keep BRK.B and a few others though as they continue to run.

      You can find some low-yielding, low-vol Canadian stocks to consider by owning ZLB directly or some of the top-stocks in it.
      Mark

      Reply
  2. Hi Mark

    I was thinking of buying Telus but I noticed their payout was over 200%. Do you have concerns about them reducing their dividend?

    Reply
    1. Hi Terry,

      Nice to hear from you. I think BCE, Telus and various utilities have been hit hard by spiking interest rates.

      They just increased their dividend to shareholders so I would be surprised if in a few months they turn around and cut their dividend but you never know! That would simply be very poor management. I don’t have any near-term concerns.

      Mark

      Reply
      1. Hey Mark, I tend to agree, mostly because we just re-entered a position with Telus!

        However many an AQN investor thought the same not so long ago only to have the rug pulled out.

        I worry about my BCE dividend a lot more!

        Reply
  3. Good Afternoon Mark.

    I have noticed you do a lot of projections for people who want to retire early (before 65) and how much capital they will require to live on $5,000 a month, up to about $7,000 a month. I am one of those lucky ones that enjoys my occupation (I get paid for doing something I truly enjoy doing) and have been working on my own terms for several years now. I am beginning to think of slowly edging into retirement. I looked around your site but could not find any projections on how much capital you need if you retire at say 65 or 70. Have you ever done any projections like that? Just curious as there are a few of us around that enjoy the work experience and are working on our own terms. Thank you Mark

    Reply
    1. Don, great example.

      I don’t have an exact case study on that but do reply to this comment/thread and offer up an example. 🙂

      Desired spending per year/after tax = ?
      Combined or individual RRSP assets age 65 = ?
      Combined or individual TFSA assets age 65 = ?
      Combined or individual non-reg./taxable assets age 65 = ?
      Assumed % CPP = ?
      Assumed MAX OAS or other?

      That would be a great start from you…again, as an example.

      There are certainly lots of folks that want retire “to something” else in their 50s but I can also appreciate some folks love what they do, and have no intention of stopping work until their 60s or beyond. I will likely always work at something in my 50s, just not always full-time.

      I appreciate your comment.
      Mark

      Reply
      1. Hi Mark,

        One thing that I have learned in planning for my retirement is to use whatever resources you can. Your site certainly falls into that category for me of being a resource. I have also been taping into friends that are already retired to try and understand how they handle retirement. If nothing else “networking” is a very positive resource for getting information about my concerns and finding out what other retired people have as concerns or how they handle situations. All good.

        As an example, see below:

        Spending after tax per year $84,000 (combined for a married couple or 42,000 each)
        Combined RRSP assets $1,000,000
        Combined TFSA assets $140,000
        Combined Non Registered $50,000
        CPP one spouse 100% full CPP the other 50% CPP Not taking till 70
        OAS max and most likely waiting till 70.

        No debt.

        Retirement at age 65

        I suspect there may be others out there that might find something along the above lines as a case study interesting.

        Thanks Mark

        Reply
        1. Thanks for this information, Don. I’m sure I will come up with something 🙂 Stay tuned.

          I also see HUGE beneifts in learning from others, folks that have been there, done that, learned and willing to pay it forward. That’s part of the reason why I run the site for less-than-minimum wage, I enjoy the learning and engagement. I hope I will always have that passion here.

          Cheers,
          Mark

          Reply
  4. Awesome Mark !!
    Such a great example of how to build your future income, all on your own, and not relaying on others.
    No one looks after your money, better than yourself !
    Cheers and carry on !!

    Reply
    1. Thanks, Johnny! For sure I’ve made mistakes, I have some capital gains to deal with in our taxable accounts as I get older but such is life!!

      Onwards and upwards as I say.

      I hope your income stream is growing too.
      Mark

      Reply
  5. Hi Mark: Maybe you could have fun with figures also. If your portfolio is already over $40000.00 in annual income what will it be by the end of the year as EMA at least will raise dividends in Nov. Now what will it be next year and what do you project 5 years out. One never knows what the future holds but I find these musings fun and it shows that what looks like a little gain now is a lot 5 years out and with more annual cash one needs not to sell stock in the future. Only maybe a RRIF eventually. One should not have to sell stock to live in retirement. My annual income will be more every year henceforth because of dividend compounding.

    Reply
    1. Ha, yes, a good lil’ game maybe.

      I have a few Canadian companies that have not yet raised their dividend but should over time/before end of December 2024:
      EMA, FTS, CM, TD (maybe in 2025?), WCN, ENB (TBC?).

      Most of my small, handful of U.S. stocks have already raised or don’t have a dividend! (i.e., BRK.B), raises from WMT, BLK already done for 2024. I might get a raise from WM later this year in December.

      We’ll see where we get. I just try and stay invested as best I can.
      Mark

      Reply

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