Weekend Reading – How I built my dividend portfolio
Well hello again!
Welcome to some new Weekend Reading related to How I built my dividend portfolio, an update triggered by recent reader questions as our retirement draws near…
In case you missed some recent posts here they are:
Last weekend I heard from dozens of readers who stopped detailed budgeting. They track expenses instead.
…and a reminder related to this Weekend Reading theme, this was our August 2025 dividend income update.
Weekend Reading – How I built my dividend portfolio
Thanks to all readers for their questions. It’s a pleasure to engage with you.
For this edition, I updated this post below and I highlight some thoughts on progress that follow…
In summary from that post you’ll read:
- We’re now invested in less than 30 Canadian stocks (down a dozen from 10-years ago).
- We focus on one (1) main equity ETF in our portfolio for growth.
- We still haven’t invested my wife’s LIRA for retirement – that should be coming our way in a few months.
- That post re-shares our income streams to pay for expenses but ignores the future, small, defined benefit (DB) pension plan coming my way in another 13+ years. I will consider taking that pension at age 65 along with CPP and OAS government benefits. We’ll see how the spending goes!
Year to date for Canadian stocks including many dividend paying stocks has been excellent. I certainly didn’t predict this latest market upswing from the TSX but it has happened… All the experts are getting it wrong too. 🙂
Even with such a huge upswing for many TSX stocks this year, the negativity from some in the investing universe continues to pile on towards dividends and/or dividend paying stocks. I’ve read as much of late. So much vitriol from some!
Maybe part of the reason is online behaviour – the desire to be right – some folks love to shout from the virtual mountain top that dividends are forced withdrawals, which is true, since the Board of Directors makes the dividend policy decision for the shareholder. This is of course how it works. 🙂
Yet another reason could be advisor or wealth manager or planner shrinking margins – some negativity comes from those areas. I mean, every dime you keep is another dime someone else doesn’t get paid. There are some great people in that service area, but I also know from my own experience being targeted on this subject that some industry experts just want to tout dividends are flawed; because they are part of total return, just like interest and capital gains are part of total return. Yes, most know that or should know that. Just like most investors should already know that high, sustained fees paid to industry advisors or wealth managers or planners might make them wealthy and not necessarily you in the process…
For the better part of 16 years now via this site I embrace and welcome all forms of DIY wealth-building however you want to go about it. I’ve done my best to largely ignore the negativity related to my investing approach and stuck to my own plan as My Own Advisor. The journey has not been perfect, I forever admit that, and I’m not shy in sharing some financial mistakes too!
Yet I don’t know of any financial journey from anyone that has been optimal. Success doesn’t work like that.
You fail and then you pick yourself up. You test, you learn, and you move on. And if you get very good at falling down and healing from your scar tissue, only to make yourself continually better over time, you might decide to pay those lessons learned forward to others…
My reflection this week aligns to one of my favourite blogs (@FarnamStreet) on progress…
I will paraphrase in point form:
- Everyone looks for the miracle moment – the moment when success happens – the spotlight of success.
- But there is no moment, rather, a series of very small almost invisible moments that creates the outcome.
- Much like bamboo, success happens over time. Bamboo takes up to 5 years to develop its roots. To the outsider, there is no visible progress. Meanwhile, the bamboo grows below the surface, developing its roots and storing energy. Then, it grows. Years of stored energy and momentum result in exponential growth, sometimes reaching over 50 feet in a matter of weeks.
That’s how big results can happen. They start slow, they start small, but things eventually accelerate and success happens.
Everyone seems to want results and gratification but nobody really wants to engage in the process.
Investing is like that. Financial independence is very much like that.
Getting your financial house in order, like a building, is not constructed in one day.
It is built one strong brick at a time.
Continued success on your financial journey and the engagement in your process. I always look forward to hearing from you.
Have a great weekend!
Mark
Other Weekend Reading – Beyond how I built my dividend portfolio
Morningstar recently shared four (4) U.S. must-own dividend stocks to own for both income and growth. I own them all via my low-cost ETF XAW.
Thanks to my friend and fellow DIY investor Tawcan who featured my financial independence story on his site.
Nick Maggiulli has decided to go “terminally offline” from social media. I sense many others are considering the same. The thought has crossed my mind too…
Part of his reason is this:
“And with Twitter paying people based on overall impressions, the system is incentivizing this kind of behavior more than ever. This change to the platform has even impacted me personally. I’ve had to block long-time acquaintances because their replies became increasingly negative over time. These people would never say anything like this to me in real life, but online it’s a different story.”
Signs of our sad times…
On a more positive note, Dividend Growth Investor believes you should start investing with an end goal in mind.
Akin to building your portfolio brick-by-brick:
“In this article, I showed that it pays to focus on the end goal in mind when investing for retirement. The first step involves coming up with a target monthly dividend income to pay for retirement expenses. The next step involves creating a dividend strategy that allows the investor to build a dividend portfolio that showers them with a growing stream of dividend income. Depending on current condition, investors can see how each dollar they invest generates a certain amount of dividend income. As a result, investors can see their progress towards the coveted dividend crossover point after every new investment they make, after every dividend increase and after every single action to reinvest dividends. By investing regularly, keeping investment costs low, and sticking to their strategy through thick or thin, our investors have a very high chance of hitting their retirement objectives.”
Well said.
Mark
Insightful and well-explained finance content. Looking forward to more!
Thanks!
thank you for another excellent article that was honest and interesting… I will continue to follow your progress and hopefully gain some knowledge and insight. Keep up the good work!
Very kind, Greg.
So far, so good…just trying to stick to my plan and hopeful to start retirement in 2026. 🙂
Mark
Hi Mark: I would have wrote earlier but Sunday was wall to wall football with a little Jay’s celebration thrown in. Mark you are right on in your thesis. Building a portfolio is like a person growing. You start small because you don’t have the money at the start and after saving and investing in a few companies you start to have a small base. Your job is to slowly build that base but the market has a way of throwing a wrench into your plans. With me it was the Arab oil crises as oil prices shot through the ceiling. That’s when I made my first mistake as I stopped buying stock and bought bonds but that only lasts so long and then in the ’80’s you are back to buying stocks again. Your base grows and then your base has a growth spurt. In the ’90’s we have exuberance with the Dot Com craze and the price of all stocks rise. Stocks bought in the $20.00 range in “92 and ’94 are now splitting 2-1 in ’99. This act in of itself grows your base and allows for more dividends in the future. After this the market trades sideways but allows you to still build your base and then the market slowly rises which allows you to still participate in the buying cycle. Then we have a pandemic and the market drops like a stone which makes all the stocks you wished to buy now on sale. A very happy state of affairs indeed. Now the small base you started with has grown exponentially. Now your portfolio has another growth spurt as your shares are pulled higher by the AI craze. People say this is different as now we are dealing with large substantial companies but what about the startups dealing in AI. Not all will make it and could be the start of a new down turn. This is just part of the investing journey as you keep on expanding your base. The larger your base the more money you make and as a result more security. This is a never ending job of managing the money because there are all kind of sayings to the contrary like “you snooze you loose” and if you stop the world will pass you by. So for me managing my portfolio is one of my hobbies. This is the path but what really adds to the journey are the business stories encountered along the way. According to Morko I have 917k of artificial dividend payments in my account. Oh well I guess I’ll have to just put up with them. Each year more is added to the portfolio so you might say that a lot of the portfolio is grown organically. Time, adding to it and the power of compounding works wonders.
Incredible comment. If you’ve been investing since the 1980s, then your war chest of boring, annual dividend income must be phenomenal.
It will be interesting to see what AI brings. I own some of that tech-stuff like my ETF XAW.
Keep me posted on your dividend income progress, very inspirational for a young lad like me!
Mark
Hey Mark,
Loved this Zinger!
“Yes, most know that or should know that. Just like most investors should already know that high, sustained fees paid to industry advisors or wealth managers or planners might make them wealthy and not necessarily you in the process…”
So good, and such a good point to wrap your your point
Onward!
Thanks, Garrett. The way I see it, while there are some good fee-based folks out there; good advisors out there, for folks that need those services, I figure every dime you can keep and invest on your own and not pay $$ to other people, is likely going to generate more wealth for you vs. buying someone else’s yacht.
How is your investing going these days?
Mark
Going well! I’m building up a big chunk in XEQT and I’m at the point right now that any distributions I get I take as cash and I’m starting to buy all the big name, typical Canadian stocks. ENB, RBC, TD, CNQ, T, etc
Snowball is moving now, looking forward to growing it as I go
Seems like an excellent plan to me! XEQT is great for extra diversification if you decide to own some individual stocks on top. I know quite a few folks that take this hybrid approach!
Snowballing will happen = time + money invested. 🙂
Mark
Mark,
You have to ignore the others and continue to be independent in your own thoughts towards investing.
No need to conform to others standards.
Reminds me of the 1964 song by Pete Seeger. “Little Boxes”.
I enjoy your honest and humble thoughts and I think I might be doing something similar. I’m 63 and didn’t really start seriously working on my retirement unti I was 50. However, through some bold real estate moves, downsizing my home, and becoming debt free I created a dividend flow that coupled with my OAS and CPP will be higher than my current income. I have a lot of Canadian Dividend stocks or ETF’s but I’m currently working on US growth ETFs to provide long term growth. Those who knock the peace of mind that comes from dividend income are not retired. Selling stocks in a down market would really bother me. Maybe if I started sooner I’d not let it bother me. In addition, I want to leave my children a hand up at my departure so I don’t want to sell precious shares. I see it like an Apple orchard and I’m a farmer. I can either cut down my trees and sell the wood or have enough trees to simply sell the apples and keep the trees that produce them. Thanks for your thoughts and encouragement.
Thanks for your comment, Michael.
I got serious about DIY investing a few years before starting this blog, and therefore launched this a few years later, as My Own Advisor.
It is our hope that cashflow from all our accounts, within the year, will be > expenses. CPP and OAS will be extra spending on top about 14-15 years from now.
There is certainly some peace of mind that comes from income investing but to your earlier point, I also want and need growth in my portfolio too including from the U.S. and other countries. Can’t ignore that.
The farmer/gardner metaphor is a good one: you plant enough and the fruits keep coming to avoid digging up the entire garden.
I appreciate your thoughtful comment.
Stay in touch!
Very kind and yes, I hope to continue to press on, DividendsOn. 🙂
Same process largely that made you and others that comment here very successful.
Best wishes back,
Mark
If dividend investing is flawed how come there are so many of us comfortably living of our portfolios w/o ever selling our equity? I’ll bet few of these so called advisors are. If you don’t walk the talk keep walking and stop waiting my time.
Building wealth is easy no advisor needed if fact better to not have one. It takes time and capital yes but how you invest is less relevant plenty of strategies can be quite successful. Extraction on the other hand is harder but as long as you never have to sell equity it is very likely you’ll be successful. I do not even consider “total returns” as overly relevant as long as I reliably meet my income needs I don’t care that much if I’m “worth” $x or $y or if I’m up/down. I prioritize income growth over capital growth, unrealized gains are great but exactly worth $0 unless you sell.
That said even an income focused portfolio can grow your wealth. If I just look at my RRIF since start of 2024 my income has increased by 44%, my withdrawals are up nearly 50% and even with a >10% yield my capital increased by 15% simply by reinvesting excess income and capital appreciation.
As for the risk comments, any decent dividend/income portfolio is a lot safer vs. anything else or even a job in the private sector. if you hold quality assets like ENB, RY, TD or FTS you should sleep well every night.
Yes TSX on fire but so is everything else (ex US), not because we are in great shape but more a reflection of the mess down south. Another interesting tidbit, many of the big funds (CPP but more importantly the massive European pension funds) have been and are actively hedging against USD. USD will go lower seems to be the consensus so hedging your US focused holdings might be something to think about (not advice).
Yes, fair point and pretty much where I am coming from…
“If dividend investing is flawed how come there are so many of us comfortably living of our portfolios w/o ever selling our equity?”
Or, at least selling assets as they wish?
Some advisors saying it doesn’t work and actively trying to recruit more new clients.
Yet, there are retirees earning $100,000 per year from this strategy and enjoying their time not working.
Who is right? 🙂
I’m convinced income investing works, I’ve written as much, just that there are concentration risks that Mordko and others point out.
https://www.myownadvisor.ca/investing-for-income-works/
Until I see lots of successful retirees fail with their income investing approach and/or their hybrid investing approach, I’ll remain pretty convinced that owning a collection of Canadian stocks, U.S. stocks or a mix of both can work wonders for the long-term disciplined investor.
Mark
For me, I need a way to invest that would avoid my desire to tinker and trade. I started with the core BTSX approach and later diversified a bit further from that. Today, we own 21 stocks/funds ranging in weight from 7.6% to 2.5%. Watching the dividend income grow monthly makes it easy for me to ignore market gyrations and stick to the plan. It’s optimal for me even if it’s not mathematically optimal.
Good stuff. That can be a challenge with individual stocks, the temptation to tinker but I tend to fight that now in buying more XAW in our portfolio as my “when in doubt” investment decision.
Mark
“We’re now invested in less than 30 Canadian stocks (down from about a dozen 10-years ago). ” 30 is not less than a dozen. Did you mean “:down about a dozen”?
Ah, great point and thanks for catching that grammar issue = down a dozen.
Cheers,
Mark
Hello Mark,
Your post came at a time when I’m almost sick of reading articles of investors from both camps dividend or income vs growth , it’s sickening really and I try to ignore it but a lot of times I can’t.
You always repeat that beautiful phrase “Personal finance is personal” but a lot of investors they don’t get it yet they keep bashing other investors for following what they feel like it’s right for them.
To me whatever you invested in whether growth or income your a thousand step ahead from someone who’s not doing either so be happy with what you got and celebrate other people success as well.
Have a great weekend Mark and thank you for many years of fruitful posts on this blog that helped me and many others.
You are very kind, Gus.
Like my reply to Barry, really trying to tune out the negativity and focus on my/our plan. It has lead us to semi-retirement in 2025 and it is my hope that it will work in 2026 in full retirement too….if we both choose.
At the time of that updated post, we own 27 CDN stocks and we’re now focused on XAW for ex-Canada diversification as a “just in case” selection. So far, so good.
Happy to celebrate the success stories of others whether they are like Mordko with 100% ETF approach (well done!) or people like Barry and many others on this site that invest in a collection of individual stocks to meet their objectives.
Personal finance will forever be personal.
My best to you,
Mark
Ah yes … the negativity.
Unless one goes the dividend route you’ll never get it. Do these guys ever mention the federal and provincial dividend income tax credits or do they have any clue of how much extra you keep rather than CRA? In BC it’s the best in the country for some odd reason given the notion some have of an NDP government (since 2017) as “the Dippers” – more for government, less for you. Think about that for a moment and reassess your perception. Or the ease with which you do your income taxes every April? Or feeling less panicky when a periodic market plunge takes your aggregate portfolio down by 20 or 30%? If you have ready cash – and I do – what an opportunity!
I felt a lot better when I stopped paying attention to the online pundits or others with an ax to grind. But since I can be a generous soul I can further enable them with some ammunition. Our TFSAs have a combined market value of $660,000 and we only own two stocks – ENB and BNS. That’s better than 99.8% of the rest in this country according to Statistics Canada. The aggregate amount will go up and down but whatever. The increasing $35,000 income will likely keep going up if my over 40 years experience in the stock market are any indication. We don’t need it … yet. Add it to the tentative $14,000 contribution this coming January and the income flow will probably grow another $4000 with a 3 – 4% dividend increase.
Patience.
The tax claim might be accurate sometimes (eg of you have little other income) but It all depends on circumstances.
For someone earning good wages, focusing on high dividends in non-reg accounts leads to higher taxes vs tax deferral. Thats not good.
For someone retired on $70K income from RRSP/CPP with $20K in eligible divs, grossing results in phantom income and loss of $1K in OAS. So, your $20K divs leave you with $14,800 net. Had you realized $20K as cap gains, you would have been left with $17,800 or $3K better off.
These subtleties are often missed out when looking at tax impacts of div strategies.
I view OAS within its original mandate as an entitlement for lower income seniors. The clawback begins at $93,454 for assessed 2024 income. This is way beyond fair in my estimation and another reason why federal government deficits are rising as our Senior population grows. But to your point re. circumstances which is a good one.
Collapsing one’s RRSP before receiving CPP/OAS at 70 is one strategy. Again circumstances play a role. Longevity runs in my family and I’m in good health at 72.
We have an option to defer OAS until 70 for a 36% premium and CPP for 42%. I did just that re. OAS and do not have an RRSP. The payout is almost $1000 a month and the clawback in my personal case is presently $499. The remainder at $501 gets recycled back to government as taxes and I’m OK with that. Last year it covered all monies owed to CRA.
By the way OAS clawback is assessed on Gross and not Net income which I discovered to my chagrin at 70. I had substantial capital gains for the prior tax year (while 69) and in the following July (they reassess every July) after receiving a payout in March after my 70th birthday in February, and receiving the maximum amount for 5 months, Service Canada reassessed the the rest of the year based on Gross income.
The OAS clawback (officially called the OAS Recovery Tax) is based on your net income before adjustments as reported on line 23400 of the T1 return. That line already includes the gross-up on Canadian dividends. So even though you never actually receive that grossed-up amount in cash, it gets added to your income for the purpose of calculating whether you’re over the threshold.
Regardless of how you view OAS, in the circumstances i quoted above dividends leave individual worse off vs same cap gains income.
You are correct in the portfolio outline as described above.
Hi Mordko – you wrote: “So, your $20K divs leave you with $14,800 net. Had you realized $20K as cap gains, you would have been left with $17,800 or $3K better off.”
I understand what you’re saying (with the gross-up calculation affecting OAS), but although you are “$3K better off” in your example, you have to sell the assets to realize that capital gain – and then you would no longer have those assets to realize future growth/collect dividends. So although you’re better off the first year, you’re behind in future years as you keep collecting dividends on those assets (and also hopefully realizing growth).
Am I missing something?
Yep. Dividends are artificial accounting numbers. Whether you extract (rather than reinvest) dividends or sell stock of BRK.A, there is no fundamental difference. The real measure driving value is profit rather than divs.
You do lose “asset” by selling stock vs not selling it, but you equally lose asset by extracting dividends vs reinvesting.
And your TFSA strategy worked out very well but one has to consider risk/return ratio. High risk strategies of having just 2 stocks could be justified in TFSAs but thats what they are: Strategies with very high risk.
I’m aware of that. Cash is too when interest rates decline but I still want a hefty 6 figure amount in case I’m wrong about everything. Bonds are risky. In the nineties the good people at the now defunct Everest Funds at TD Canada Trust strongly encouraged me to buy an ATT Canada bond. Later I wanted to sell as the company was in serious trouble as reflected in the bond price. Two guys at the Bond desk strongly encouraged me not to … I wonder why. Later the company was bought by Manitoba Telecom and I received stock priced at 32 cents on the dollar price of my original bond purchase.
And so it goes.
Sure I’ve had dividend cuts – TC Energy, Manulife and this year BCE ( over the years BCE paid out $90,000 in tax efficient income on a original $70,000 investment which I then sold for a tiny – but needed – capital loss). I still have more income flow than ever. That’s part of a “very high risk” strategy which I’m prepared to take without wiping me out (see above cash note). I doubt given BNS history of paying dividends since 1832, and with the last cut during WW2 as “a patriotic gesture” that the latter will happen during the rest of my life. ENB may fix their dividend as they did for 10 years from 1986 at 7% but with all the huge increases in reliable and consistent energy consumption at AI data centers it’s hard to beat what Enbridge provides – “30% of the crude oil produced in North America … nearly 20% of the natural gas consumed in the U.S … North America’s largest natural gas utility by volume” and “early investor in renewable energy, and … a growing offshore wind portfolio.”
But of course I’m not infallible. Risk is best defined as “what’s left after you’ve thought of everything”
Correction on BNS … dividends since 1833.
Thanks, Barry!
https://www.myownadvisor.ca/top-canadian-stocks-to-buy-and-hold-forever/
Yes, I recall BNS has been paying since 1833. Paying me today too! 🙂
Indeed, patience.
I’m getting there, slowly, Barry.
I too, have felt better in recent years ignoring experts or related online pundits who might disagree with how I invest.
That is incredible…
“Our TFSAs have a combined market value of $660,000 and we only own two stocks – ENB and BNS. That’s better than 99.8% of the rest in this country according to Statistics Canada.”
No doubt!!
We own lots of ENB and BNS – both in our top-10 stock holdings along with RY, FTS, CPX, CNQ, TD and others.
You? How many stocks are you owning these days?
It is our hope that once my wife’s LIRA is invested in a few months, we will have enough income from our portfolio to cover our annual expenses. Keep you and others posted.
Mark
13 dividend or distribution companies.
Forget the naysayers, learn from the critics with thoughtful advice and read more from Tom Connolly’s website and his suggested mentors.
Yes, many folks have referenced Tom over the years as a big of a “godfather” of Canadian dividend investing.
Continued success with your 13 Canadian stocks, Barry. Quite the year for the TSX in general.
Mark
One man’s “forced withdrawal” can be another man’s “reliable income”. 🙂 🙂
I will use that in the future. 🙂
Mark