October 2024 Dividend Income Update
Hey Everyone!
Wow, quite the week to date in U.S. politics!
I’m going to ignore too much more coverage and thoughts on that since it can be far too polarizing to discuss. Instead, I’ll try and stick to financial updates here on My Own Advisor and this month I have a new October 2024 dividend income update to share.
For new and established readers, this is our monthly update to share how we are progressing with our hybrid portfolio – a structure that was established about 15 years ago as follows:
- We invest in a mix of Canadian stocks in our taxable account – to deliver income and some growth, and
- Beyond the taxable account, while we own a mix of stocks we own (increasingly) more-low cost ETFs in our registered accounts like our RRSPs, TFSAs and my LIRA for extra diversification.
I like the approach, the process and the results.
How high can things go in 2024???
In a recent Weekend Reading edition, I shared some market all-time high information including my investing approach when at market all-time highs.
That investing approach at all-time highs is very simple actually:
Just. Keep. Buying.
I have done so.
In mid-October, I bought a few more shares of Brookfield (BN) in my taxable account. That was aligned with what I said I would do in that Weekend Reading post:
“Well, if we have some more money to do so inside our taxable accounts, I’m leaning on adding more Tourmaline (TOU), more Canadian Natural Resources (CNQ), and potentially more Brookfield (BN) to our portfolio. I like those stocks (have always liked those stocks) in particular: more potential growth for all of them to come IMO.”
Otherwise, I remain commited to my longer-term approach as I enter 2025:
- I’m VERY likely to buy more low-cost XAW for my TFSA in January 2025.
- I’m balancing all purchases with my desire to grow our cash wedge for 2025 as well.
How high can things go in 2024??
I’m really not sure. I cannot predict the future nor can anyone else – although I do like making predictions on this site for fun. 🙂
Year to date, although not every stock (or ETF) is a HUGE winner in my portfolio, many are:
*Equity ETFs (at the time of this post):
- HEQT is up over 21%.
- QQQ is up about 25%.
- XAW is up close to 24%.
*Stocks (at the time of this post):
- BLK is up about 27%.
- BN is up approaching 50%.
- BRK is up about 27%.
- CM is up almost 40%.
- CPX is up nearly 50%.
- EQB is up about 23%.
- MFC is up over 50%.
- NA is up over 30%.
- WCN is up nearly 27%.
- WM is up about 23%.
- WMT is up approaching 60%.
*These ETFs and stocks listed above represent well over 50% of our entire portfolio*. Again, your mileage may vary!
Beyond these gains, we also recently received more dividend increases from the following in October: CNQ and WCN, and of note, CNQ was the second dividend increase just this year!
There was also a spinoff from TC Energy with South Bow (SOBO) shares that has juiced the dividend income stream as well.
Will things go higher in 2024 with post-U.S. election results now in? With higher tariffs coming?
Who knows.
What I do believe is if you think there is A LOT of uncertainty in the air today, well, get ready for much more uncertainty and broader instability to come…with a new U.S. President back in charge – who loves to celebrate himself as a genius of anything and everything.
October 2024 Dividend Income Update
Like many other DIY investors and some key experts I follow, I don’t believe politics should ever play a role in any investment decision. I do not see how any politician as genius as he may seem to many has any active control the over the economy or the stock market.
Also, and I have mentioned this numerous times on my site, I don’t believe there is a perfect portfolio. There is only a financial plan and investment plan designed for you. Nothing else will do.
In our house we continue to focus on our investment plan regardless of politics.
Probably a good thing.
Here is the new (end of year) projected tally for our *Projected Annual Dividend Income (PADI) in 2024:
*Recall these PADI updates focus mostly on our non-registered accounts and RRSPs, along with my small LIRA value. I have reported things this way since January 2023 since these are the first accounts I will use to fund semi-retirement with: part-time work + “live off dividends” = fun.
To put this new monthy income update into perspective for future retirement spending:
- That’s averaging over $3,900 per month.
- We earn almost $130 per day, every day, even in our sleep.
Compared to just last month, even with my minor BN purchase when I add that to the other changes/dividend income increases that pushed our annual income over $500 higher per year moving forward.
This is how we’ve decided to invest – a hybrid portfolio – that delivers dividend and distribution income from our mix of stocks and ETFs. Other approaches could be right or better for you!
I look forward to hearing how your portfolio is coming along. Share in a comment please!
I look forward to keeping you updated next month too!
Mark
Hi Mark and congrats on what i consider to be your balanced approach to investing (translation: an approach that is not too investments/personal finances-centric but rather one that is measured and consistent with a happy life).
I am a relatively frequent observer here but a very sporadic commenter. A brief post this time because of
– the attention given here to the 50ks in divvies mark
– my very likely spring 2025 launch into retirement
In point format:
– I plan to stop my contract work in spring 2025 and continue channeling revenue from that work into my small corp until then, while at the same time activate my RRIF in January (set up last week. I am yet to partially or totally transfer the RRSP funds into it);
– i am sitting at the 50k divvies point across all my accounts (registered personal and unregister in the corp)
– will withdraw much more than the prescribed minimum from the RRIF (i am 65), hoping to smooth out taxation to some degree. Even at that, i project (assuming 7% return and 2.5 inflation) the RRIF will last to age 83-84 (or my date of departure, if earlier 😌).
– the RRIF will contain a 5 year GIC ladder
– will burn the GICs for the first two years, which together with the divvies in the RRIF and corp income (from rents) distributed as divvies will be sufficient to cover all my personal income requirements, while completely insulating me from (stock and real estate) gyrations for those initial 2 years. I intent to launch into retirement from this position of complete independence
– i will keep the other 3 years of GICs for the foreseeable future to deploy in case of markets turmoil after the first 2 years of retirement
– no plan to touch the TFSA but leave to the estate, together with the principal residence
– will delay CPP and any OAS not clawed back (most/all will, despite the fact that i could play the OAS game, given that i can modulate the amount of dividends my corp will pay me)
– need to decide what to do with my corp accounts and the two real estate properties it holds. Will need to speak with an estate and tax lawyer about it. How much to withdraw and distribute (to children and donations) while on this earth and how much to leave to the estate. Several considerations on this, which are beyond the scope of my post here.
Should add that, since reaching a comfortable divvies level, i have been de-empathizing canadian individual divvy payers and bolstering my ex-Canada etf exposure (e.g. XAW which you like as well).
Very good, Giovanni. I like XAW for lazy ex-Canada investing and have owned it since 2016, when I only purchased a very small bit. I’ve been adding to it since then and now have a few thousand shares/units of XAW and growing by the year.
YTD the XAW returns have been great but who knows?! about the financial future!
Mark
Very kind, thanks very much. 🙂 Your comments make my day.
Seems like we are going to launch semi-retirement / retirement around the same time?! Spring 2025?
In point replies:
-congrats on your own $50k per year in dividend income. No small feat!!
-super smart, I write about that a lot, to “smooth out taxation”. If you can get your RRIF to last into your 80s WHILE meeting your income needs, that is incredible.
-again, very wise on the GICs or cash/cash equivalents. We have our desired $50k cash wedge established and I will update that post before the holidays on that.
https://www.myownadvisor.ca/how-much-cash-should-you-keep/
-like you, I hope to delay CPP.
Question: are you planning to sell corp. assets over time and gift the money to kids?
(Certainly, giving/gifting them money while you are alive, can see them / guide them to enjoy that money for their own wealth-building (max out TFSAs?) would be smart; it would make them millionaires in their 50s and 60s) but I can appreciate everyone is different on estate planning).
Mark
To elaborate a bit further on the most important comment in my first post, and in your reply: your light-hearted posts here on your site and in the CMF, sprinkled with kindness, to me are evidence of a kind heart. Key attribute for happiness. Reading your fin advice then has added importance because of that context. Unfortunately, greed may take one over when thinking and planning finances, pulling us away from ‘true’ happiness. i don’t think it is your case.
To your question: i am not sure yet what i am going to do with the corp and its assets, i will first consult with a tax and estate lawyer (may consider options like an estate freeze). I am giving myself time for that, as well as to establish myself first in retirement and assess lifestyle and expenses when there. Vacation costs are already significant (almost 20k for 2 months in Europe last sep-oct) and possibly growing (planning 3 months overseas next year). In the meantime, i will be flowing the rents from the two corp properties to myself to complement my RRIF. Until i decide what to do with the corp i plan to keep the divvies, RE and equities in the corp accounts alone and use as backup if need be.
The idea of gifting while alive is very enticing, of course, for the reasons you mention. Maxing out my children TFSA would be joyful. It will very possibly be part of the mix going forward. I am giving time to time and events (meet estate lawyer, tax planner, 1-2 years of actual retirement to measure things on the ground). In the meantime, i set up and been funding my grandson’s RESP to start.
Best of luck to you, your life partner and everyone here.
Great comment, Giovanni. You strike me as a kind-hearted soul!
Sounds like you’re a person that really thinks things through…
Ya, I could see our vacation costs going higher over time. We are budgeting about $15k next year in 2025 and hope to increase to $20k in the coming years for our mid-50s.
I would be curious to know what your tax accountant and estate lawyer suggest. At the end of the day, your decisions of course but it seems that gifting money now, if you have the means, is wise (tax-wise and helping your kids or grandkids as they grow).
Keep me posted!
Mark
Totally agree with this statement of yours “ gifting money now, if you have the means, is wise (tax-wise and helping your kids or grandkids as they grow”. It will hopefully be part of the mix going forward. Have to put it in the context of everything else and check with a tax and estate lawyer. Will let you know when i meet with one.
Keep up the balanced and good life. Let us not forget to see the sun, it is always there,
Giovanni
Great stuff!
Mark
$47,147 is excellent, however, I do like round numbers, such as $50,000 🙂 I suspect that’s a common human trait. I see no reason why you won’t get there, unless BCE have started a trend by putting their future dividend increases on hold.
I sold my entire BCE holding and bought T with the proceeds. This move wasn’t about running away from BCE, (which perhaps I should), but was to grab the loss to offset gains I’ll have when we transfer about $50K from our non-registered accounts to replenish our TFSAs in January. Over the next 30 days I’ll mull over buying back into BCE or perhaps just call it a day. Decisions, decisions. That’s why I like my index funds.
LOL. I like round numbers too. I will do what I can to save, invest/stay invested for you so I can hit the $50k mark and make you feel better. 🙂
I still own some BCE but only in taxable accounts. I don’t own any inside TFSAs (more growth stuff there) and I don’t own any BCE inside RRSPs or LIRAs, etc.
I’m not planning to buy any more BCE despite the high-yield it pays now. I’ve been on record / this site to say I have a few stocks I want to buy more of inside taxables accounts (like TOU, CNQ, BN as my major examples) and have done a bit this year.
My plan is to dump everything into low-cost XAW for both TFSAs in 2025 for growth in another 7 weeks.
Boring but that works well for me over the last 15-years and no need to change my plan.
Thoughts?
Mark
I’ll keep on watching for that nice round number!
The BCE stock was in my taxable account for the dividend tax credit.
I think when it comes to investing, boring is good and it gets results.
Ha, good stuff. Yes, BCE only in taxable account for me for the divi credit. 🙂 Not buying more, just holding what I have for now.
Mark
Spend the cash wedge and replenish with the dividends. I will be using CSU for my donations this year. Lots of capital gains there. And still re-investing all leftover cash in more dividend payers at the end of each month. Also just came back from a cruise from Venice to Athens. We spent 3 days in Venice before, 2 days in Athens after, and then 4 more in Germany visiting relatives. Dividends are paying the bills.
Very much aligned, including my RRSPs. DRIPs turned “OFF” for RRSPs and likely going to let cash build up via dividends and distributions and withdraw the cash that is there. Rinse and repeat for a few years in early retirement until I decide to sell some assets here and there as I go.
My “live off dividends” approach is very much alive and well.
Wow, nice trip. Been to Italy but never north to Venice. On the list. You would suggest to go?
Kudos Div on the trip. Dividends paid for it. 🙂
Mark
Yes I would recommend Venice. I don’t need to go again but it should be experienced once. Our trip was very similar to yours otherwise. On an Azamara ship which is smaller but very good. We visited 8 ports along the way.
Ya, I see that – been there, done that kinda thing. I think we’ll make it to Venice and other parts of Italy eventually.
We are toying with our next ideas for the cruise to do a transatlantic one in the spring or fall of 2026. Not sure yet.
I’ve got 2025 expenses “almost” figured out if we start semi-retirement in 2025 like I think we both will but not quite there on our spending plans for 2026 yet. Working on that over the coming months in fact.
The withdrawal strategy for 2025 will be fairly straightforward as you probably already know Div:
1. Spend non-reg. dividends +
2. Withdraw some registered/RRSP dividends as cash vs. selling stocks or ETFs +
3. Part-time work/blog/other currently TBC for 2025.
We are too young and/or we won’t be touching LIRAs/LIFs, my small workplace pension, TFSAs, CPP nor OAS in the coming years. Only 1, 2, 3.
Thoughts on my 1, 2, 3? 🙂
Mark
Congrats those are some good results, if I was close to your dividend amnt I’d be sitting on the beach this week! My portfolio is up 21% YoY including the withdrawn income. My sustainable income is up ~30% which is helpful as well.
Politics determine the market more than anything else like it or not. The US market is detached from reality and economic fundamentals it’s behaving more like a cult than a market place. The key driver is the toxic mix of manipulated Money supply/Liquidity/Interest rates not PE, PS, PB or any other rational investment metric, this chart says enough imo.
https://www.currentmarketvaluation.com/models/buffett-indicator.php
That plus the all but guarantee that #47, formerly known as #45, will as usual turn things to @#$@ does make me pause. Smart and big money is not buying US equity as far as I can tell, long term bond yields are not is a good place relative to the rate cuts so I remain cautious. Remember the last time a Republican president deregulated the US banks?
My hypothesis is that the US (and therefore unfortunately Canada given we export 70% of our goods to the US) is unlikely to be in a better spot 4 years from now. My 2 cents (not financial advise); enjoy the ride up while it lasts and unless you have a long time horizon I’d think long and hard about managing your downside risk along the way. I know that’s not “passive” but having a plan B does not have to be complicated even a a simple stop loss order on some of your positions can do wonders for your peace of mind.
Thanks, Ben.
I certainly worry about the future… Yes, some signs say Canadian financials should benefit from new Trump policies but who really knows what will happen since he brings, what is for certain for me, is instability.
My plan all along is to stick to plan that includes buying more stocks and low-cost ETFs over time, while, minding my cash wedge. I hope my plan is correct, it seems good “on paper”/via the spreadsheets and such but only in time in real-life while executing it will I know for sure.
Thanks for your detailed comment,
Mark
Yeah sorry about that Mark another touchy subject I think I need a spa day:)
If I were in your shoes I’d be less or even not worried financially. You have significant AUM and a plan with a sizable cash position, not in the old mattress I hope:) Add >$47K in dividend income (and counting Telus just increased theirs again Brookfield will do the same soon enough) and one can take a 20% hit plus several years of equity drought and still be just fine. Effectively you’ve insulated yourself from the circus so grab that popcorn and enjoy watching the clown in charge bumble his way through the next 4 years. One thing is certain there will be no shortage of entertainment be it drama, tragedy, comedy or horror I think I’ll cancel my Netflix subscription.
All good, Ben!
We’re starting to be less financially worried as we age a bit and dividend income moves higher.
We hope to cross $48k by the end of the year? We’ll see. I have a few other investments I might make.
That said, I did notice Telus just increase their dividend this month/November so I will report that next month and it should boost our income a bit higher. 🙂
Keep ya posted!
Mark
“One thing is certain there will be no shortage of entertainment be it drama, tragedy, comedy or horror”
I’m considering volunteering for a four-year medically induced coma/freezing experiment, with the option to extend as needed.
It’s going to be interesting for sure, Bob. Geez.
Wow – over the 47K threshold – that is incredible! Well done Mark! I’m sure it will only be a matter of time before you pass the 50K mark!
Thanks very much, hopefully by mid-2025 but if I’m living off my portfolio it will be different for sure and the numbers won’t be going up nearly as fast! We’ll see?!
Mark
Mark:
I thought that the first $50 M of Canadian dividends were tax free.
Yes, if no other income, the first $50k ($50,000) of dividend income earned is pretty much tax-free per se in a taxable account.
Put me in the camp of not knowing what the heck is going to happen as well. Having said that, I’m not going to take any actions that I normally wouldn’t. I believe we’re in a decent position to ride through any reasonable turbulence that might happen. If the wings fall off the aircraft it won’t matter in any case. 🙂
Not related to the political issues, I elected to crystalize some of the capital gains of the BAM stuff I bought last fall. Donated the equivalent of about three years worth of donations. So instead of donating from cash flow annually, I’ll carry forward and use this donation up for the next three tax years. Didn’t want to just sell and get nailed with the capital gains.
Good luck to all.
Well done on the BAM gains. Why sell, you want the money to spend? I hope to keep adding to Brookfield for a bit.
Mark
Just wanted to crystalize some of the accrued CGs without any detrimental tax results. I’ll likely use the cash flow from not donating said cash and picking up some growth leaning stock (looking at BN) to replace the BAM I donated.
Oh, gotcha. All good. You’re in a position to do pretty much anything you want. 🙂
I hope to buy more BN before the end of this investing year. We’ll see if I can find the $$.
Mark