Welcome to my latest dividend income update. For those of you new to these posts on my site, every month I discuss my approach to investing focusing on dividend paying stocks and how reinvesting the dividends paid from the Canadian companies we own are helping us reach financial freedom.
This month, I’ll provide you with our magic formula for growing our dividend income to over $11,500 per calendar year, since we started our hybrid investing approach – owning dividend paying stocks and index investing.
Magic pill #1 – We buy Canadian blue-chip dividend paying stocks that have a history of paying shareholders for decades.
Magic pill #2 – We reinvest the dividends paid by these companies where possible, as much as possible.
Magic pill #3 – We avoid selling these companies, regardless how far the stock price might fall.
Magic pill #4 – We own many of these companies inside our Tax Free Savings Accounts (TFSAs), some of these companies are non-registered investments. We index invest (more using low-cost ETFs like VTI) in our Registered Retirement Savings Plans (RRSPs).
That’s about it. We haven’t reached our goal yet but we’re 39% of the way there (if you’re keeping track we gained 1% towards our goal within the last month). Sure, there are more details but this is the essence of my super-secret recipe. Please don’t tell anyone.