It's hard to believe that it's May already and 2016 is already 33% over. It felt like it was only a few days ago that Mrs. T, Baby T1.0, and I were celebrating Christmas with my family and Mrs. T's family visiting from Denmark. Now it's May and we have Baby T2.0 with us, wow where did the time go?
After seeing a bit of recovery in the last few months, the market has been quite negative the last few days on growth concerns. While a down market is not good for your portfolio value and net worth, it's great when you're in the accumulation phase. Why? Because this allows you to buy shares at a slight discount. Ideally you want to see a bear market during the accumulation phase of your portfolio and bull market during your usage phase/retirement. Due to this, we'll be looking to purchase more stocks and trying to increase our dividend income moving forward.
For those of you that are new to this site, each month I provide an update on our dividend income and our dividend growth. We love dividend income because it's money that we receive for doing absolutely nothing as all. Gotta love getting paid while changing Baby T2.0's diaper. 🙂
In April, we received dividend from the following companies:
Pure Industrial REIT (AAR.UN)
BCE Inc. (BCE.TO)
Bank of Nova Scotia (BNS.TO)
Corus Entertainment (CJR.B)
Dream Office REIT (D.UN)
Dream Global REIT (DRG.UN)
General Electric (GE)
H&R REIT (HR.UN)
Inter Pipeline (IPL.TO)
KEG Income Trust (KEG.UN)
Liquor Store (LIQ.TO)
RioCan REIT (REI.UN)
TransCanada Copr (TRP.TO)
Domtar Corp (UFS.TO)
In April 2016, we received a total of $1,033.73 in dividend income from 21 companies. Of the $1033.73 received, $157.51 was in US dollar and $876.22 was in Canadian dollar. It's great to see that we have again received over $1,000 in dividend income. Hopefully for the rest of 2016 we'll be able to receive over $1,000 in dividend income every month. This, of course, assumes there's no more dividend cuts. Unfortunately, like many dividend growth investors, we've encountered several dividend cuts over the last 6 months or so.
Please note, we use a 1 to 1 currency rate approach, so we do not convert the dividends received in US dollar into Canadian currency. Reason for doing this is to keep the math simple and avoid fluctuations in dividend income over time due to changes in the exchange rate.
Compared to April 2015, we saw a YOY growth of 19.32%. It's a solid YOY growth given all the dividend cuts & freezes we've encountered. Having said that, I would definitely love to see the YOY growth number in the 20-30% range. But perhaps that's a bit ambitious. As our dividend income becomes more significant, it will be increasingly more difficult to have a higher YOY growth. For example, going from a $100 monthly dividend to a $150 monthly dividend, a 50% YOY growth, will require an additional $20,000 (given a 3% dividend yield). Going from a $1,000 monthly dividend to a $1,500 monthly dividend, again a 50% YOY growth, will require an additional $200,000. Unless you're making $300,000 a year or more, I'd argue it's very difficult to have that much spare cash to be able to continue the 50% YOY growth. Here's another way to see this, if you add $20,000 from our $100 to $150 monthly dividend scenario into your portfolio, that'll only result in a 5% YOY increase when your starting point is $1,000 monthly dividend. Same amount of cash invested but the YOY growth is significantly lower.
Luckily we've been busy on the buy front since the beginning of 2016. We've made the following purchases:
30 shares of Bank of Nova Scotia (BNS.TO)
71 shares of Inter Pipeline (IPL.TO)
38 shares of Magna International (MG.TO)
87 shares of RioCan REIT (REI.UN)
115 shares of Vanguard Canada All Cap Index ETF (VCN.TO)
51 shares of Telus (T.TO)
20 shares of Canadian Imperial Bank of Commerce (CM.TO)
46 shares of Saputo (SAP.TO)
32 shares of Royal Bank (RY.TO)
123 shares of National Bank (NA.TO)
26 shares of Target Coropration (TGT)
40 Shares of Telus (T.TO)
15 shares of Agrium Inc (AGU.TO)
20 shares of Starbucks (SBUX)
40 shares of Brookfield Renewable Energy Partners Ltd (BEP.UN)
100 shares of High Liner Foods (HLF.TO)
These purchases, in conjunction of organic dividend growth and DRIP, should hopefully allow us to have a strong dividend growth moving forward.
So far in 2016 we've received a total of $3,842.81 in dividend income. Given our $13,000 in annual dividend goal, we're behind the target by about $490, or about 3.77% behind. Looks like we have a bit of work to do!
The cool thing about receiving dividend income is that we're getting paid regardless what we're doing. We're getting paid when we're changing Baby T2.0's diaper in middle of the night. How cool is that? If we use a $20 hourly wage, that means the dividend income that we've received so far in 2016 has saved us over 192 hours of work. That corresponds to 24 days of work. Given that the work days is typically 22 per month (23 at most), we've already saved ourselves a month of active work. That's pretty awesome if you ask me. 🙂
Dear readers, how was your April dividend income?