October 2019 Dividend Income Update
Welcome to my latest dividend income update for 2019.
With my October dividend income update, that’s a sign we’re getting closer to year end! Hard to believe really…
For those of you new to these posts on my site, for a few years now, every month I discuss our approach to investing using Canadian dividend paying stocks and how that approach is helping us realize financial independence.
My approach
To recap our investing journey in the nutshell, we take a hybrid-approach to investing.
- Approach #1 – we own a number of Canadian dividend paying stocks for income and growth.These updates focus on that progress and the performance of our TFSAs and non-registered accounts to support any semi-retirement dreams.
- Approach #2 – we’re owning more units of low-cost U.S. Exchange Traded Funds (ETFs) inside our RRSPs over time.I believe owning more U.S. ETF units (over time) is a great complement to our Canadian dividend income machine…
Financial Independence (FI) is getting closer…
Dedicated readers will know I’m not a huge fan of the Retire Early (RE) part of the #FIRE movement but I am a huge advocate of (and diligent investor striving towards) FI.
In this detailed post here, I outlined with a fellow blogger why striving for financial independence might be a much more worthy goal for GenX or GenY than any retirement. You can be the judge!
Back to our saving and investing goals, I continue to believe earning ~$30,000 per year from our Canadian dividend paying stocks should cover most of our basic expenses, for life.
Ottawa, Canada is an expensive city to live in (compared to other parts of the country (Toronto $$$ and Vancouver $$$$$ excluded)), so based on this choice so we’ll need a decent retirement portfolio to cover the following (in 2019 dollars):
- food/groceries, basic household supplies = $8,000 per year or $667/mo.
- condo utilities (heat, hydro, water, internet, cell phone bills) = upwards of $6,000 per year or $500/mo.
- condo property taxes in Ottawa = $6,000 per year or $500/mo.
- condo fees = $6,000 per year or $500/mo.
That’s $26,000 per year without any auto expenses or healthcare expenses.
Throw in some car expenses from time to time (our car is paid off) and then a healthcare plan when our workplace benefits end and it doesn’t take much to need $30,000 per year after-tax to live where we do.
(Here is what to consider when your workplace benefits are disappearing.)
Get your tax-free money!
Thankfully, to help us with our semi-retirement dreams my wife and I have long understood the powerful merits behind our Tax Free Savings Accounts. So should you!
These are incredible things you can do with your TFSA.
We’ve essentially considered our TFSAs as another retirement account from Day 1 – and because we have, via owning some of my favourite Canadian dividend paying stocks inside this account, we’re accelerating our path to earning our $30,000 per year goal. Much of that income will be tax-free!
Later this year, we’re projecting our tax-free (i.e., TFSAs) and tax-efficient investing (non-registered account) might yield close to $19,300 this calendar year. That’s a $50+ increase from just a few weeks ago. It’s a solid $2,200+ more from this time last year. Beyond TFSA contributions, that’s money earned simply from letting our dividends flow in and become automatically reinvested commission-free.
Not all roses when it comes to dividend income
While this has been a nice year of growth, I’m actually a bit disappointed.
The Canadian portion of our portfolio is up about 20% this year which means it’s costing me more in dividends to reinvest in more shares that I own.
I would be interested in your take on this comment: it would be great to see a 10% or even 20% market correction soon.
Buying stocks on sale always seems like more fun.
Thanks for reading and sharing this update, and do let me know what questions you have about saving, investing, Canadian stocks, low-cost ETFs or anything else on your financial mind. I probably have a post about it or I could consider writing a new one! I would be happen to answer and share what I know.
Mark
Further reading:
We’re getting closer to FI security and our investment Crossover Point. What the heck is that?
I’m putting a higher priority on my personal wellness of late. Some of these wellness benefits even escaped a financial classic that sold millions of copies – The Millionaire Next Door.
A fellow blogger asked me a number of questions about my income investing strategy. So, I answered them of course – right here.
Mark
My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I've surpassed my goal and now investing beyond the 7-figure portfolio to start semi-retirement with. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.
I checked out the Telus gain today and then checked another stock I own. Was surprised to see it was up 27 percent today (US$41) good quarterly results. Nice to have some big winners to compensate for the losers.
Telus is doing well. I recall they have guidance in place to keep their dividend raises going. Love that company. Operates like a utility.
Nice mark
You continue to make some fantastic progress.
While its unfortunate seeing stocks up. It’s kinda nice mentally seeing the green beside it. haha
Also bep hitting new highs, gotta love that. Renewables are the future.
Congrats on that telus raise.
keep it up
cheers
Thanks. It’s really rather boring now. Telus, BCE, are like utilities so with every quarter dividends flow in, get reinvested, more dividend income next quarter – helps these reports. Then there are the dividend increases with adds another juice of cash into the compounding machine.
Now that I have about 30 CDN stocks, most DRIPping, the machine runs itself! Just need more time to get the income where I want it to be and then I can work full-time or part-time as I please.
Big fan of $BEP, $INE, $AQN and a few more in this space in Canada. Might buy more $INE for the TFSA in 2020, a couple hundred more shares.
First congrats to Mark for the progress.
Regarding to the market, I actually like to watch my portfolio to grow. Although a market correction means a great opportunity for investors, I found I was always feared to buy when market down a lot. And I don’t like the feeling to see my portfolio going down.
I think if one has guts, one can always find opportunities no matter what the market status. One of my friends is new to investment and listened to my advice, bought 100 shares of Telus yesterday. She is surely very happy today with both price and dividend up a lot this morning. Too bad I didn’t dare to buy more Telus as I feel that I have already too many of it.
Thanks very much May.
Ultimately I buy when I have money and when I feel prices are decently valued but the latter is subjective.
Then again, I would definitely prefer prices to be lower when I buy my stocks but such is life 🙂
I own a few hundred shares of Telus and likely always will unless they change their dividend!
May, I am so unhappy with Telus from a customer’s point of view, that I am thinking I should sell my shares. My logic is that any company who can piss off customers so much, shouldn’t do well. Lol, who knows?
LOL. Own the companies you love to hate to some degree. That said, I’m a KOODO customer for my cell phone. I’ve been very happy with them. (KOODO is a sub-set of Telus.)
“The Canadian portion of our portfolio is up about 20% this year which means it’s costing me more in dividends to reinvest in more shares that I own”.
This is one of the hardest things for most investors to realize, especially if they recognize that dividends and dividend growth is important. They still get excited seeing prices rise, not realizing it is costing them income.
I think so cannew. I’ve tried to train my investing brain but I’m certainly not perfect!
Dang dude, almost $20k in TFSA/RRSP income? That’s insane.
Not sure if you’ve shared this before or not – but I’ve been asking everyone else to see if they’d be willing to start sharing, not just their monthly incomes but also their portfolio returns (either last 12 month returns, or total returns since they started).
Almost $20k from TFSAs and non-reg. RRSPs are beyond that. The dividend/distribution income is modest for RRSPs but still very good given I own some U.S. ETFs like VYM that offer lower-modest yield.
Ultimately when TFSAs (x2) + non-reg. = > $30k per year, we should be “good” to work part-time given we’ll have RRSPs assets and future pensions as well.
I don’t mind sharing my returns. I think this was my last benchmarking effort:
https://www.myownadvisor.ca/benchmarking-my-portfolio-january-2018-update/
Good idea. I should do another update in January.
How are things? Bought any good scotch or bourbon lately?
Well…damn..then you are even further ahead ..right on…haha
Funny you should ask……haven’t bought anything lately – however I’m going to a special release this Weekend to grab a few bottles, and if I am LUCKY get a couple super rare ones. (Need to get a ticket and hope to have name drawn..for the CHANCE to buy a bottle) haha
A few I am hoping to grab are:
Weller CYPB
Weller Full Proof
Elmer T Lee
Mister Sam (this one is pretty pricey tho..so we will see…and most likely they will only have 1 bottle for sale)
Weller 12 year
Stagg Jr
They have a few others I might look at too…we will see 🙂
Cheers