Welcome to my latest dividend income update, my Christmas-is-approaching-very-fast-edition. For those of you new to these posts on my site, every month I discuss my approach to investing using dividend paying stocks and how reinvesting the dividends paid from the Canadian companies I own are helping me reach financial freedom.
For the last few months, I’ve hinted about focusing more on low-cost Exchange Traded Funds (ETFs) to diversify my portfolio in 2014. Those plans are still intact but I’m not going to leave dividend investing behind in favour of just indexing anytime soon, not by a long shot. I’m convinced my plan to buy and hold many of Canada’s largest companies (along with indexing using ETFs) will pay off long-term and even in the short-term, it will serve me well.
Let’s look at two examples, recently, where the following companies I own announced dividend increases and 2-for-1 stock splits:
- National Bank
- TD Bank
This other company I own hiked its dividend by 11% as well.
While ETFs provide investors with low cost products to invest in, market-like returns, low effort and broad diversification, it still feels great to get a raise now and then. I’m currently on the hunt to buy some new stocks for my portfolio in 2014 and looking to find ways to fund our Tax Free Savings Accounts (TFSAs) early in the year. When I make those transactions, I’ll share them with you. In the meantime, as 2013 draws to a close, thanks to Canadian companies that pay regular dividends we’re on pace to earn about $7,480 this calendar year in dividends from our investments. November was a particularly popular month for stocks that pay dividends, about $700 was paid out into our accounts with most of that money reinvested into buying more stocks using DRIPs. Hopefully we’ll see a few more dividend increases occur before December is done but if not, I’m convinced more are coming in 2014.
What’s your take on my two-pronged approach to investing – using ETFs and dividend paying stocks?
Got a question about dividend investing? Ask away!
I haven’t done the math yet but I think there must be some benefit from an income perspective to having your dividend-paying-income-generating stocks purchased well before you need them to provide retirement “live on” income. I also like your double-strategy of dividend-payers for income and security and index-minimal-fee-ETFs for market diversity and/or growth.
And Happy New Year! (almost)
Hey Bet Crooks,
I’m biased but I believe so as well, having the money-making-money before I need it. It’s also a good cushion should something happen to my job. You never know…
In the years to come, I’ll be moving more towards indexing because all the literature says so but I can’t see me selling any existing bank, telco, energy or consumer stocks I already have. Just keep reinvesting dividends, rinse and repeat 🙂
Happy New Year to you.
Mark
I just looked up BRK. That’s Birkshire Hathaway, and the price is $174,250.00 US per share. Nice, if you can afford it.
Try the BRK.B shares Helen.
http://web.tmxmoney.com/quote.php?qm_symbol=BRK.B:US
Nobody I know can afford the A shares!
I follow a hybrid approach as well. I have dividend stocks and ETFs and even some non dividend paying but high quality stocks like BRK. So far has been working pretty well!
BRK is a stud MoneyCone. I know a few investors who own it and intend to keep owning it for many years to come. Heckuva holding company isn’t it? I will probably always keep my hybrid investing approach, it’s working well. Thanks for your comment.
Hello! I have the same comment as Daisy in the comment above mine. I am also asking if you have previously written about how to go about setting up a DRIP program, especially if you hold the stocks in a discount brokerage account. Is there a list of companies who have DRIP programs?
Thank you
Hi Helen,
I’ve written about setting up DRIPs with transfer agents here:
https://www.myownadvisor.ca/drips/
You don’t have to use stock transfer agents, you can reinvest dividends whenever you have enough stocks or ETFs to pay for at least one share every time dividends are paid each month or quarter.
Most blue-chip Canadian and US stocks offer DRIP programs. I can provide a post and some links about DRIPs in 2014.
Wow, over $7,000 in dividend income in one year? Do you have a post that is one huge post showing where you invest, how you invest, what platforms you use, etc? I’d be interested in that if you do.
Hey Daisy. I’ll work on those set of posts in 2014. That would be a lot of material to cover in just one post 😉 Thanks for the ideas.
Mark,
Awesome stuff. $700 in one month is fantastic! Really inspiring.
Keep up the great work. Your dividend snowball is compounding quickly.
Best wishes.
Thanks Jason. Coming along. I need to remain diligent with the plan for another 10 years to reach my goal.