November 2018 Dividend Income Update
“I am an advocate of investing in individual, high-quality stocks, provided you can take care to avoid certain pitfalls. Historically, stocks have proven to offer as good as return as any other investment vehicle – and nothing I’ve seen over the past 50 years of investing has shaken my faith in stocks.” – Stephen Jarislowsky, author of The Investment Zoo and Canadian billionaire investor
I first shared those words on my site over six years ago in this dividend income update post.
Back then, I was absolutely thrilled to see the dividends paid and reinvested across our portfolio of Canadian dividend paying stocks – churning out (then) close to $480 that month.
I continued in that post to write:
“As long as dividends aren’t reduced and the companies we own keep paying them, hopefully we’ll surpass $6,000 in dividend income this calendar year. We don’t dare touch this money today, it’s growing every month for our retirement living expenses.”
Times change, some things stay the same.
To borrow another quote from a bank CEO, a company we own that just raised their dividend for the second time this year:
“This year, we continued to make good progress against our strategic objectives.” – Darryl White, CEO, BMO.
Me too Darryl. Sticking to a long-term financial plan can work wonders.
Our financial plan for 2018 was rather simple: continue to kill debt and maximize contributions to our TFSAs.
So far, so good on both.
By employing this simple plan, and simply letting assets purchased inside our TFSAs and in other accounts do all the heavy lifting for us, at the time of this post we’re on pace to earn $17,050 in dividend income this year calendar year excluding RRSP assets. This is a new milestone – over $17K per year. That’s an increase of almost $2,000 more from this time last year.
Sure, any rational investor will tell you a dollar of dividends is equivalent to a one-dollar increase in the price of a stock. However, I believe it’s the discipline of sticking with companies that increase their dividends and the phenomenal compounding power of those reinvested dividends over time that some investors just don’t appreciate. You can see the chart of my long-term multi-year journey here.
Stay tuned for my December dividend income update to wrap up 2018 in a few weeks.
On the subject of wrapping, I hope your holiday plans are coming along too.