November 2019 Dividend Income Update
Welcome to my latest dividend income update – where I share our monthly passive income progress report from investing inside our non-registered account and Tax Free Savings Accounts (TFSAs).
People keep asking me: why dividends Mark? People remind me dividends don’t really matter. The only thing that really matters is total return.
Yes, indexers, total return is very important. I get it.
But so are behaviours associated with investing. That is, my investing approach. Sticking to an investing plan I believe in. A plan that helps me focus. A plan that inspires me to save more because I see shiny stocks I want to buy.
For my readership, here are some key reasons (and reminders) about why I invest in Canadian dividend paying stocks.
- The income received from our Canadian companies we own is very real. Its tangible income I can reinvest or simply keep in my bank account as cash and invest whenever I please.
- I can count on many of my Canadian companies to increase their dividends over time. In fact, I have no less than two dozen dividend increases in my portfolio so far this year. In the coming weeks, I won’t be surprised if I get a few more (from Fortis (FTS) and National Bank (NA) in particular).
- I control the portfolio turnover, not a fund manager I have to pay money to. In fact, I’ve built my own no-cost Canadian dividend ETF in recent years by holding all the big names directly that are held in the same big ETFs and mutual funds. This is a big reason I don’t own any Canadian dividend ETFs.
Those are just some of the reasons I/we own dividend paying stocks inside our non-registered account and TFSAs – and we’ll continue to do so.
Hindsight always offers a dose of 20/20 vision. In particular, for this month’s update, I thought it would be interesting to see what I said many months ago and see what I invested in.
I wrote about 3 utility stocks I wanted to buy this year back in February. I ended up pulling the trigger and buying a bunch of Algonquin Power (AQN) on February 21 at about $14.55 per share. I’m glad I did.
Not only did I receive a dividend increase from AQN earlier this year (10% in May) but the share price at the time of this post is over $18. That’s a conservative return of almost 25% in 10 months.
I wrote about 3 REITs on my buy list in May this year. I went ahead a few days later and bought some CAR.UN (Canadian Apartment REIT). Another lucky call? No idea since I can’t predict the future and I don’t really care! At the time of my CAR.UN purchase the price was under $49 per share. CAR.UN is now trading over $55 per share. In just six short months, the stock has gained 13% and with urbanization on the rise throughout Canada I anticipate CAR.UN will be going much higher over time.
Again, lucky? Maybe. Focused on dividend paying companies in my portfolio that pour income into my account? Absolutely.
Thanks to dividend paying companies like these, including others that tend to increase their dividends with time, our ability to live off dividends is becoming very real. Maybe in the coming years my wife and I can work part-time at our current employer. We think that would be ideal if they’ll have us in that capacity…
This time last year, we anticipated just north of $17,000 in 2018 calendar year dividend income. By maxing out contributions to our Tax Free Savings Accounts earlier this year, and sticking to our boring-dividends-matter-to-me plan, we’re on pace to earn almost $19,400 in another few weeks.
We will earn $19,400 in 2019? I have no idea. Company decisions regarding their dividends policies are out of my control.
However I do firmly believe that shareholder friendly companies usually remain shareholder friendly, and as long as those companies we own continue to fork out dividends like they do (let alone increase them from time to time), I suspect we’ll have a very, very, good chance of realizing our passive income goals.
One more dividend income update for 2019 planned. I can’t wait to see where we get as January 2020 TFSA contribution room approaches with another $6,000 in room per account to contribute to.
What are your income plans now or in your financial future? Do dividends matter to you?
Great articles on dividend investing, Mark. You occasionally identify the names of some of your dividend investments. Do you have a post where you disclose all of your dividend investments so that I can view them?
Good stuff, Mark. So close to the $20K mark!! Keep those dividends piling on.
You bet! 2020 TFSA room should hopefully put us over the top in a few months 🙂 See you soon.
Love your stuff Mark. I was late to the dividend diy as I just started in September in a non registered account and made $117 in dividends which I reinvested so far. Now looking to move my maxed out TFSA into stocks as well as you have inspired me. Thanks
I feel the TFSA is a gift to all adult Canadians..I mean tax-free growth and/or passive dividend income!!! Pretty sweet 🙂 Great to hear you have some inspiration!
Keep it up Mark. Earning 19,400/year or $2.21/hour for every hour of the day sounds pretty darn amazing.
I liked the way Lloyd framed it too! Thanks GYM.
Wow, Mark, you have done so well with AQN and CAR.UN. I still have the $12K in my TFSA sitting in the money market. Maybe that’s why I am still working? Didn’t do research enough to see which stocks worth a while and also no guts. I meant to buy NA and scared by the market at that time. If I bought……. Big Sigh。
Anyway, I think we are still doing fine. I assume one of us should be able to safely retire now. But obviously none of us really wants to take the leap yet. Both of us still enjoy our jobs, also stressful from time to time but still in control. Financial wise, double income of course makes a big difference too. Well, with the market on an all-time high after such a long bull market, it’s prudent to wait for a while anyway. But I guess really need to begin to think about retirement more seriously. Lots of things to plan so it’s pretty difficult with full time job and young kids. But without a good plan, I won’t sleep tight. So here I am, in a dead loop for now.
I’ve learned to treat my TFSA as a 100% equity dividend paying investment account. I know not every person is comfortable with that but I felt almost 10 years ago this account was a gift to all adult Canadians and I best take advantage of it where I felt comfortable to do so. My approach may or may not work for others and that’s OK!
Also, regardless of what the market does or does not do I continue to invest even at all-time highs. Smart? I dunno. I just figure sitting on money waiting for something to happen when I know I can’t predict the future is not helping my mental framework.
No doubt you are very, very busy with a young family. I don’t know how some parents cope actually!!
I look at stocks that I already have that are off their 52 week high. Sure the *market* may be at peak, but there has to be something I have that is not doing as well. I just deployed some lazy cash in my RRSP into PPL yesterday. I don’t do much “analysis”.
I also had some lay cahs in my RRSP and just bought some PPL following your steps. 🙂
That’s somewhat one of the rules I use as well, buy stocks near or at least approaching 52-week lows. Doesn’t always happen though and I need to pull the trigger since I like to get my money working for me sooner than later.
Mark and Loyd, yeah, I need to learn from you to invest in market regardless the market status. One way I am doing it is forcing myself to invest with AA target being 60/40. Once the FI part exceeding 40, I will force myself to buy something.
When I said it’s prudent to wait a while, I didn’t mean wait a while to invest, I meant wait for a while to retire. I feel it won’t be good to face a market crush right after being retired. If I could manage, I would like to retire after the market crush. But who knows what’s waiting for us in the future. Meanwhile, we will continue to work for a few more years and keep saving and investing. Most importantly, enjoy the life as it’s good.
Even if you learn what you shouldn’t do May, based on someone else’s plan, that’s a great thing. You can tailor what you don’t like about someone else’s approach for you! Personal finance is personal.
I have debated adding car as my next reit. Granite looks pretty good as well though.
Dont forget about that enbridge raise coming in a week. I’m sure that will be a healthy boost to the port.
I’m considering SMU.UN (Summit) for my TFSA in 2020. I figure $6k should buy 400 shares easily and then I can DRIP it with the distribution at $0.045.
We’ll see about the ENB raise, I hope they lower their guidance on their future raises but I’m conservative.
Our friends at BMO increased their dividend for the second time this year 🙂 Happy investing and happy holidays!
I have no idea why it occurred to me but using your 19,400/year works out to $2.21/hour for every hour of the day! Made me giggle or it could be the NeoCitran Nighttime making me loopy.
I love that stat. Awesome. Making $2.21 per hour every hour of every day even when I sleep. Going to borrow that!
That is an interesting way to look at it!
I also like Tawcan’s way to look at it. Divide the investment income with your hourly rate from working. Then you have the hours that you have to work to get the same amount of income.
Yes, another way to look at things.
Alternatively if I take working 5-days a week (260 days per year – but would be less given holidays, etc.) but just for kicks that $19.4k means I’m earning about $75 per day.
It would need to be quite a bit higher to be equivalent to my “day job”.
We’ll get there eventually…
“WPT Industrial REIT” real-estate (symbol- WIR.u ) in another favourite fo mine. Trades in USD on the TSX . Unit payment are in USD as well. Great Industrial properties close to US urban areas. Its a smaller Industrial REIT with very solid books and management, hence I feel they will get run at just like my ‘Pure Industrial REIT’ was … taken out by Blackstone Investments at a nice premium . Just a FYI for you guy ! 🙂
Interesting and yes, thanks James, I did notice they pay dividends in USD $$. I should add them to my list!
AQN is a ‘keeper’ . Great management and future !
I think so too!
Well Done Mark.
Thanks Mr. CBB 🙂
“A plan that inspires me”
Yup….The best, most scientific, diet in the world ain’t gonna do jack if a person is not inspired enough to follow it.
Time to start looking at what to do with new TFSA contributions…(rubbing hands together)
Rubbing my hands together as well…almost have the $12k saved up!
Nicely done Mark! Our goal for this year is $23,000 in dividend income. Looks like in a few weeks’ time we might be able to hit this goal. *Fingers crossed*
$23k would be very impressive!! Well done!
Love seeing my dividends come in each month or quarter. Aiming for 8K+ this year. Money in the bank. You could go crazy trying to follow all the different trends. Pick a couple of strategies and stick with them. Combo of dividend ETF payers and Canadian stocks is working fine for me so far. I might sell the ETF’s and use the proceeds to purchase some more stock. The ETF’s haven’t increased dividends while I could buy a Canadian Bank and likely get two raises per year or buy a railroad and strive for capital appreciation. Such nice problems to have. Great comments Mark.
Ya, I’m not against dividend ETFs at all in Canada – I just so happen to own most of the same stocks VDY and other funds own outright.
Oh, I meant to add…thanks for the support!
I also figure a few of the usual suspects should continue to increase dividends for many years to come. Time will tell!
Great to achieve that much income using your strategy.
Hey Mark did you have to pay someone to build your website and who did you use as a host? I started my website but still building it. I was wondering if I should pay someone to build it.
Really up to you OJ Junior! I’ve used various hosts in the past but I would recommend any in the top-5 except for Bluehost. I had a terrible experience with them.
NIce calls Mark.
CAR is my largest reit holding and it’s a double without divvys in almost exactly 3 yrs. Who knows what the future brings?
As always best wishes on your journey to your goals. Very well done so far!
CAR.UN seems somewhat unstoppable in the years to come.
Thanks very much for the kind words and support! I own you an email reply at some point!!
You’ve earned that!
Ya, I admit I had been thinking of trimming CAR but then I thought what for and what else would I buy, and don’t tinker.
Fortis announced their increase on November 1st.
Ah yes, they did. Thanks for the reminder MG 🙂
Hi Mark. Have been a reader for a little over a year. Enjoy the read, have been a self directed investor for 35 years. One reit that has worked well for me has been DIR-UN. The last few years I have increased my portfolio in a couple of trusted MIC’s and would like your views on this avenue of income. Thanks.
Self-directed for 35 years? Geez, that is very impressive.
DIR.UN I don’t own yet but I am considering more REITs in 2020 inside my TFSA. Do you think this one has more room to run long-term? Yield around 5% is safe and can be funded well?
Distributions haven’t really gone anywhere for a few years. I like increases 🙂
Congrats – next year will be well over $20k for sure! $20,000 in passive income can buy a lot of beer 🙂
Nice buy on AQN & CAR. I’m up about 55% with AQN, my first purchase was around 9.90, and then topped up at 12.00. Hopefully with DRIPs, by the end of next year, I’ll have 1000 shares.
Yup, with 2020 TFSA room coming x2 accounts, as long as we invest in early 2020 we should be over $20k per year rather soon. Can’t wait. Need to figure out what to buy for TFSA…thinking some EMA right now. Maybe some CPX. Considering more REITs too.
Well done on AQN. I said a few years ago this would be a $20 stock. It’s going to happen. 1000 shares should deliver many shares every quarter – well done. Money that makes money can make more money!