November 2014 Dividend Income Update

It’s good to reflect…more on that in a moment.

For those of you new to these posts on my site, every month I discuss my approach to investing using Canadian dividend paying stocks and low-cost Exchange Traded Funds (ETFs), and how reinvesting the dividends and distributions paid from these holdings are helping us reach financial independence.  You can check out my previous dividend income update here.

Now the reflection bit.  Back in January 2014 I wrote this on my site:

Thanks to Canadian companies that pay regular dividends and tend to increase them every year we earned $7,645 this calendar year (2013) from our investments in tax-efficient and tax-free accounts.  Compare that to where we started 2013 it was a significant step forward for us and pretty much bang on with my prediction.  If we max out our TFSAs in 2014 like I think we can and reinvest most dividends paid throughout 2014, I could foresee us earning close to $9,000 in dividend income 12 months from now.

Those 12 months are almost up and my prediction largely come true.  With our “core” and “explore” investing approach established now, as of this month, we’re projecting to earn about $9,325 this calendar year.  This is real income we can (and will) use for our retirement while never touching the capital.  This is an increase of about $75 over last month, an increase from doing absolutely nothing but keeping our hands away from the portfolio regardless if dividends increased or decreased.

Investing can be simple but it’s not always easy.  Part of being an investor is making sure you do what you can to stay out of your own way.  I look forward to sharing another update next month to wrap-up the 2014 investing year.

Are you tracking your progress to financial independence?  If so, how is your progress coming along? 

34 Responses to "November 2014 Dividend Income Update"

  1. Congrats on breaking $9k for the year. That is a great goal that was achieved. Looking forward to 2015 I’m sure the compounding effects will certainly take hold and you’ll increase your passive income by a few thousand. Keep on inspiring with these types of posts.

  2. Mark,

    Looks like you were dead on with that prediction. Nice!

    Congrats on a very successful 2014. I don’t know how much more you could really want. You’re setting the portfolio up for a very nice run in 2015 as well. I’m guessing you guys will easily cross $11,000. 🙂

    Best wishes!

    1. Well, I prefer not to answer that question but let’s just say we’re investing as much as we can while trying to enjoy life and have some fun.

      I haven’t written about how much we have invested and don’t intend to but I can tell you our “retirement” goal is $30,000 in dividend income.

      We’re working towards that.

  3. Kudos Mark! I was doing fantastic this year, until this oil thing came into the picture these last few months… Glad I took some profits in August to clean up my balance sheet. I guess it’s just another bump in an otherwise long journey. On that note, seems like it is getting close to yet another time for bargain hunting 🙂 I love Christmas time! – Cheers.

    1. It’s all a phase. Things will be very doom and gloom for months, maybe a couple of years, I don’t know, then things will jump back up again. When the ride is over, I don’t know but it will be a wild ride I think. Oil prices are coming down!

      Yes, time to go shopping Phil, I just wish I had more cash to do so 🙂

  4. Hi Mark.

    Congrats on the excellent progress! Our capital has taken a hit along with oil prices but luckily our dividend stream has remained largely intact thanks to the recent dividend increase by IPL. As of the end of November, we’ve made $24,400 in dividends, which is the most we’ve ever made. Hope you have a great Christmas!

    1. Very impressive, great updates from you! Some dividend hikes, some cuts, it comes and goes as you know Calgary Girl. Well done to you and your husband on the passive income. I hope to get there someday!

      Merry Christmas to you and family and thanks for the 2014 blog support.

    2. @CG
      Isn’t IPL one of the greatest, so far at least. They are paying me over 21% on my initial COP.
      Oil is tanking lately and I am hard pressed to restrain myself from buying more of HSE, IPL, VSN. Oil is even taking down the banks now and RUS is getting interesting.

      1. Yes, if I can save money, time to go shopping this winter for O&G stocks. If thinks continue to tank, win-win since I can invest in my indexed products at cheaper prices as well.

        1. @Mark;
          Yes O&G is looking good but you will have to be very picky. I read that TET just shut down their dividend. So if I need any oil to grease my dividends then I would look more to the pipleines as they are usually a fairly steady cash flow as they just more the oil on a contract basis in most cases. Heck I tried to buy BTE at $40 a few months ago but they took off and I did not chase them. Look at where they are now. Looks like a bargain but they also made a big purchase early this year and they have to pay that off with low oil prices. I will pass on them for now.
          Aside from that I would stick with the big boys in the oil field but wait for some kind of stabilzed bottom or a bit of an upswing. Read the other day that US oil stocks (supplies) were low for this time of the year. I don’t know how as there seems to be a glut of oil out there but then maybe they are not telling us everything, That wouldn’t be surprising. At any rate if the supplies are low and for reason we seem to be heading in to the colder part of our yearly cycle oil may just scrape bottom fairly soon. I don’t think I’ll buy until oil stabilzes for a week or two, or more.
          In the mean time the divs are still coming in.

          1. Yes, TET divi gone. More to come I’m sure…

            This is a perfect indication for me to index more in 2015. I can’t predict anything, which makes indexing a perfect fit, I don’t have to guess what the market nor oil will or won’t do. I will be looking blue-chip O&G stocks in 2015, but that will be a very small investment compared to the indexing I intend to do.

      2. RICARDO: Yes, IPL has been one of our best performers! We bought the bulk of IPL at $8 so we’ve made out pretty well. We currently have almost 6,100 shares and I’m pretty hesitant to sell since they keep increasing the dividend!

        1. @CG
          $9K of dividends next year is nothing to lift your nose at. If oil stays low and IPL re-negotiates their contracts that may go lower. For now they are paid to transport the oil regardless of price. Nice company as they have also diversified to Europe.
          Time will tell how low oil can go and for how long.
          Have to be picky when the market is so squirmy. Your money can easily slip between your fingers.

  5. Congrats on that increase in divs and your projected increase for next year. The more you invest, and re-invest, the faster the div bell curve will rise.
    I max out my RRSP, TFSA and also run a HELOC (3% tax deductible interest) for non-registered investments.
    I strive for a 10% increase in divs year to year. So it looks like you are doing very well with your projections for next year.
    For myself I am presently up 21% over last year with the Dec divs left to come in. I t amazes me every year that the divs curve keeps accerateing above my 10% hopes.
    Mind you, when IPL announces a 14% div hike it helps out a lot.
    Keep up the good work.

    1. Yes, when dividend hikes are in the double-digits, this would certainly help an investor 🙂

      Our plan is to eventually max out RRSPs, after TFSAs and then kill the mortgage aggressively. I figure if we can max out all registered accounts and be debt-free in another 6 years we have done OK.

      Thanks for encouragement and sharing your journey as well!

  6. Congratulations on hitting the $9k goal! That’s a testament to a solid approach to investing. While I’m not tracking progress to financial independence closely, I believe we’re in reasonably good shape. (I do track my dividend growth investments in DivGro very closely, though). We’ve maxed out our 401k and 403b contributions for 12 years running and we’ve added to IRA accounts as much as possible. I only wish I could manage our 401k and 403b accounts like I’m doing with DivGro. Alas, our choices are limited to a small selection of mutual funds.

    Keep up the good word!

    1. It’s coming along Gary. Our savings rate could be higher but we are also really enjoying life and having fun now and again, dinners out, local travel, destination travel, small luxuries here and there. I figure while we have our health might as well enjoy some things. I don’t want to have any regrets.

      Thanks for the encouragement!

  7. I’m very interested in Div. investing. My investments, through a so-called reputably adviser, are on track to make about 2.9 % this year and his charge, of course, is 2.38 %.

    His excuse is it was a new fund starting in 2014 when I had my money transferred to him and he had to leave 30% cash on the side as there was too much that was overpriced in Jan.

    I want to pull out, but being a neophyte in self investment, I’m a little nervous. Any suggestions on how to get started. I am well read, thanks to this site and others similar to it, but, like I said, I’m just a little afraid of jumping in.

    1. Hey Ed,

      I can feel your pain and have been there, done that.

      I would first suggest you inform and educate yourself more. I can appreciate you are well read but sometimes you don’t know what you don’t know. Dividend investing, while a good strategy, is not without risks. Same goes for an Index Investing approach. In both cases, poor products, poor decisions and lack of a financial plan all have the potential to ruin a portfolio.

      I would first suggest if you are interested in dividend investing, reading a few books on it:

      1. The Single Best Investment by L. Miller.
      2. The Investment Zoo by S. Jarislowsky.

      Next, read a few indexing-oriented books:

      1. Millionaire Teacher by A. Hallam.
      2. The MoneySense Guide to the Perfect Portfolio by D. Bortolotti.

      After you read those books, you’ll have a very good feel for what works with investing in dividend stocks and what really works with indexing and riding market returns. Consider that reading part of your foundation for your up-and-coming, new and improved financial plan for 2015.

      Be patient, it will take time to wrap your head around some things in those books but soaking up the information in those books (at a cost of $100 or less) might be the best investment you’ve ever made.

      Hope that information helps you get started.

    2. @Ed;
      You are paying 2.38% to an advisor? I trust he is advising something other than mutual funds or even ETF’s as they would also be taking a cut of your profits.
      Personal opinion is that he can not beat the market by more than 0.52%, after his fee, you would be better of with GIC’s or the like at no advisor fee.

      Investing in stocks is touchy on the stress levels. If you can not tolerate seeing your portfolio going down, as it would probably be doing this week, you might want to consider something other than stocks. If you can handle the stress and have sufficient time line then have a good look at the blue chips – banking, telecommunications, even oil. Buy low. sell high. Easy to say, hard to do. Best to hold the good ones and they will pay you year after year.

  8. Great stuff, Mark. Things tok a dive for me (and many others) when oil went down. I am hoping they can figure out the political issues so that it can get back to a reasonably higher price. Tough to see companies like COS drop so much for very little reason within their own control


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