This update is a little bit later than usual as I've been under the weather the last few days. 🙁
When I tallied our dividend income in middle of December, I knew we already met our goal of receiving $8,000 of dividend income in 2014. Obviously both Mrs. T and I are very happy with this progress but we are very interested to know what we'd end up on the final dividend income amount for 2014.
December was a busy month for us when it comes to dividend stock purchases. We made several purchases. First we bought some Suncor shares and then ended the month by buying shares of BP PLC, ConocoPhillips, and Unilever PLC. Let's just say January will be even busier when it comes to dividend stock purchases. We've already made a few purchases which I will write a blot post later.
Without further ado here are a list of stocks that we received dividend payment in December:
Pure Industrial REIT (AAR.UN)
BP PLC (BP)
Canadian National Railway (CNR.TO)
Chorus Aviation (CHR.B)
Corus Entertainment (CJR.B)
Dream Office REIT (D.UN)
Energyplus Corp (ERF.TO)
H&R REIT (HR.UN)
Intac Financial (IFC.TO)
Johnson & Johnson (JNJ)
KEG Income Trust (KEG.UN)
The Coca-Cola Co (KO)
Liquor Store (LIQ.TO)
McDonald's Corporation (MCD)
Manulife Financial (MFC.TO)
MCAN Mortgage Corporation (MKP.TO)
RioCan REIT (REI.UN)
Waste Management (WM)
In December we received a total of $725.78 in dividend! This is an increase of 39.06% compared to December 2013.
Please note, when it comes to monthly dividend income, I do not differentiate US and Canadian currencies. To keep the math simple, I'm using a 1 to 1 currency rate when it comes to dividend income received in US currency. This may not be accurate but it keeps life simple. I like simple life. 🙂
The biggest dividend contributor in December was Manulife Financial with $99.36
In 2014 we received a total of $8,362.30 in dividend income! That's 4.5% over our $8,000 annual goal. What's more impressive is our annual dividend increased from $5456.20 in 2013 to $8,362.30 in 2014. That's a 53.26% year over year increase! I'm ecstatic to see such growth!
To put this number into perspective....
We got paid $22.91 per day for doing absolutely nothing at all!
Please repeat that last sentence again if you don't understand how awesome it is.
If we were to work 52 weeks and 40 hours each week, the hourly wage would be $4 per hour. We're still a long way off from BC's minimum wage of $10.25 per hour but it's a very good start.
Another year in dividend stock investing under my belt and I've learned and realized a few things:
1. Continue executing the Dividend Growth Investing strategy despite the markets performance
The markets will go in either directions. We have no control over which way they'll go. So stop worrying about how the markets are doing and just keep executing your strategy. If you're into index investing, keep doing that; if you're into dividend investing, keep doing that. Don't give up your strategy half way through the year and decide to implement a whole new strategy.
2. Ignore the market stock price, focus on evaluation and future growth.
Don’t quibble over eighths and quarters on the stock price. If you think the company has great evaluation and excellent future growth, it's important to own the stock rather than trying to save a few dollars in the transaction and end up not owning it at all. At around 52 week high of $70 in end of 2012, Johnson & Johnson may have seemed pricey back then. If you tried to wait till the price to drop to $69, you have completely missed the opportunity of owning this great company. In case you're wondering, JNJ is around $104 and you would have missed $5.35 per share worth of dividend.
3. Finding a balance between high yield stocks and high dividend growth stock
Buying a stock that pays 4% or greater dividend yield is great. But if the company doesn't grow its dividend, inflation will slowly decrease the real purchasing power of dividend received. On the other hand, although a stock may only pay 2% dividend yield at the time of purchase, if the stock has a yearly dividend growth of 25%, in 5 years the dividend yield on cost would be over 6%!
The key is finding a balance between high yield stocks and high dividend growth stocks. Is the mix 50/50? Or 20/80? Or 40/60? That magic number will depend on the individual and his/her circumstances. For example if you're looking for dividend income to take over your monthly spending in the next few years, you might lean toward a higher ratio of high yield stocks; if you have 10+ years of time line before you need to use the dividend income, you might lean toward a higher ratio of high dividend growth stocks. Again this number will different per individual and is really what you're comfortable with.
I don't know about you but I'm very excited about 2015. 🙂