Your Ever Growing Income – Giveaways and U.S. edition
“Do you want to find a simpler method of investing, one that makes sense and will help you earn a growing income during your retirement?” – Henry Mah, CMA, author of Your Ever Growing Income.
You bet Henry.
Thanks to the success of the last giveaway on my site – about Your Ever Growing Income by author and fan of this site, Henry Mah – I thought it might be nice to offer more copies to win, interview Henry some more, and share details about the U.S. edition of his book as well.
I’m happy to hear Henry feels the same!
Welcome back to the site Henry!
Thanks Mark. I was overwhelmed by the response and positive comments to the first post and your review of my book. Not just on your site but on Amazon and from emails I received, stuff like:
- “I’ve created my DG stock list using your excel sheet. Very user friendly and I particularly enjoy the detail oriented nature of this exercise. I feel more confident of knowing my own game plan”.
- “I am retired, reading your book and planning on shifting allocations toward dividend growth and dividend stocks”.
- “Your 4 step plan is excellent”.
- “As I read your book, I felt like you were preaching to the choir because of the success that we have experienced with the approach but what I didn’t expect was how many new wrinkles that you have added to the concept”.
- “Easy to read and very informative. No matter what investing knowledge you have, you will still learn something from this book. For anyone doubting if they can do their own investing, look no further this book explains it easily. So glad I purchased it”.
- “Great book! Formatting just a little distracting”.
- “I was a late adopter of the Connolly Report but discovered it a few years ago and subsequently have brought my portfolio in close alignment with Tom’s advice, which I find well documented and clearly reasoned. Your book reinforces and expands on that”.
- “Thank you for writing your book. I have recommended your book to my sons and extended members of our family”.
It’s one thing to say I tried to accomplish something with my book, it’s more satisfying to have others acknowledge it. Thanks everyone!
So, like Mark wrote above, I’m back and I’ve offered Mark three (3) copies of the Canadian version and one (1) copy of my U.S. version to giveaway.
Great stuff Henry! So, in both the Canadian and U.S. editions of your books, you focused on repeating this mantra frequently: “…instead of concentrating on capital appreciation (price of your stocks rising), we will focus on the income your stocks generate.” What are the reasons you feel this is so important?
My simple explanation is that you don’t need to watch the daily stock price changes or worry about market movements. Look at what happen at the end of 2018 and how did one feel, even though the market recovered several months later. I believe by concentrating on (your ever growing) income, you will see your income grow each and every month or quarter regardless how the market does. Receiving good news all the time beats stress and worry.
In your book(s), you suggest investors focus on stocks that grow their income (i.e., they raise their dividends consistently over time). I’ve shared this list of shareholder friendly Canadian stocks here.
How can investors be assured this will always occur? I don’t think they are any 100% guarantees, including dividends, with investing. Thoughts?
Income investing, as opposed to Dividend Growth, is not just about dividend increases. The Canadian banks did not raise their dividend for several years 2009-2011, but even without dividend increases, by following the process described, ones income will still increase each year. All our bank stock income increased during those years of no dividend increases. That’s what the strategy teaches, a constant increase in income regardless of how much one invests, even if they stop adding money or if the dividend is not raised. The income will increase faster with dividend increases and the more one invests.
In the U.S. edition of your book, you suggest investors start their stock selection process using U.S. dividend aristocrats. Why? What are those companies? Is there a U.S. ETF they can use as a proxy?
The 57 U.S. dividend aristocrats (they can easily be found with Google) have increased their dividend 25+ years, which means one need not search out U.S. dividend paying stocks. I would add, these are likely the best of the U.S. dividend growth stocks available. The NOBL ETF holds the same 57 companies.
Why not just buy the ETF? Well Mark, like most ETFs not all the holdings are equal. I want to teach one how to sort through the ETF holdings to identify the best of the group; companies that can further increase their potential income. I believe no fee (to hold ongoing stocks) is better than even low fees.
What other criteria should investors consider when buying and holding dividend stocks? In Canada or U.S. or beyond?
I came up with some simple rules for evaluating dividend growth stocks. Four rules apply for Canadian stocks and three different rules for U.S. stocks. They are simple and the process to evaluate the stocks is clearly spelled out. For example if a Canadian company has cut their dividend in the past 10 years, eliminate it as a choice to consider buying. This rule would not apply to the U.S. dividend aristocrats, since they’ve increased their dividend for 25+ years. The other rules are not as strict and allows one to use some discretion on whether a stock qualifies or not for their dividend growth portfolio.
Henry, in our last interview together, you mentioned you owned 30% telecommunications companies, 24% banks, 24% pipeline companies, and 22% utilities. Can you highlight some of those stocks you own and why you don’t own any U.S. stocks at this point? Do you keep a cash wedge of emergency money?
Don’t just copy what others own or suggest! I want to teach others how to evaluate and develop their own list of stocks to choose from; you’ll be much happier. Having said that, you’re right, I own just 12 Canadian stocks. Most Canadian (or U.S.) dividend investors could likely guess my holdings: I own 5 banks, 3 pipelines, 2 utilities, and 2 communication companies. (We own many of these same stocks across accounts.)
Since you asked about U.S. stocks, I sold the two remaining ones when our Canadian dollar was way down and the U.S. dollar was way up. We reinvested the money back into the Canadian stocks we already held and increased our income considerably. For folks in their asset accumulation phase, like you Mark, I would definitely recommend investors if they hold U.S. stocks to hold them inside their RRSP – to avoid withholding taxes.
Regarding the emergency fund, yes, I have sold some stocks to hold cash (about $80k) and I keep the money with Tangerine.
Henry, I own some U.S. ETFs (like VYM, VTI) and I’ll likely own more units as I get older. I know you’re not a fan of ETFs. In fact, you also don’t care (too much!) about the latest set of all-in-one ETFs including any VEQT from Vanguard.
Why do you not like these products?
One of the reasons I wrote the book Mark was to show that by investing for income, growing income, possible to grow your portfolio to meet your retirement needs without investing in as large an amount as most believe.
To achieve that goal, one has a better chance of success by investing in individual stocks, than ETFs. Consider what might happen during the next financial crisis (and how many might there be before one retires). The value of ETFs and DG stocks will drop, but with a portfolio of quality DG stocks, it is very unlikely ones income will drop (our income actually increased during the most recent financial crisis). I doubt we’d had the same results with ETF distributions.
With VYM (a U.S. ETF) it had an income growth of 117% over 10 years (which is excellent for an ETF by the way – XIU in Canada only had 31%). Now, the U.S. stocks I screened out of the NOBL ETF, had a 166% income growth over the same period (42% higher). It is likely the difference would be the same regardless what happens in the future. I believe in quality over quantity.
As for those All-in-One ETFs, I think any ETF with 12,000 holdings is a bad investment. What percentage will be quality and what percentage is just speculative? And how does one determine it? I suggest sticking with what you can evaluate.
I’m not saying one can’t achieve their retirement goal by concentrating on price growth or ETFs, but, I know that income investing works, it’s easy, you will see the results grow as time passes, and you won’t have set backs when the market or your stock prices drop.
Henry was very kind to answer these questions, and even though we differ in our investing approach.
One thing we certainly agree on: we both enjoy seeing our dividend income rise over time from our respective portfolios!
I have no doubt Henry’s book, either edition, can help some investors – even if those investors decide to follow a different path. At least it’s an informed decision.
A BIG thanks to Henry’s contributions to this site and offering up another book giveaway. If you don’t want to wait for the raffle to end you can:
For the curious, the nuts and bolts between the Canadian and U.S. versions did not change. The big changes to the U.S. edition:
- There is a 3-step selection process (vs. 4-step).
- Most U.S. discount brokerages allow for a full DRIP vs. synthetic DRIP.
- The Canadian cover has a Maple Leaf!
Enter to win one of four copies of the book. Three random names will be drawn for a copy of the paperback of the Canadian edition plus a pdf of the U.S. edition and one random name will be drawn for the U.S. edition paperback and a pdf of the Canadian version. Good luck!