Dividend Income - December 2015 update

2015 is over and done so it's time to write an update on our December 2015 dividend income and look forward to what 2016 brings for us. 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 plan to use dividend income as one of the passive income sources once we reach financial independence, hence we keep a close eye on it.

Dividend Income
In December, we received dividend from the following companies:

Pure Industrial REIT (AAR.UN)
Care Capital Properties (CCP)
Corus Entertainment (CJR.B)
Canadian Natural Resources (CNQ.TO)
Canadian National Railway (CNR.TO)
Chevron (CVX)
Dream Office REIT (D.UN)
Dream Global REIT (DRG.UN)
Enbridge (ENB.TO)
EnergyPlus Corp (ERF.TO)
Evert Technologies (ET.TO)
Fortis (FTS.TO)
Intac Financial (IFC.TO)
Intel (INTC)
Inter Pipeline (IPL.TO)
Johnson & Johnson (JNJ)
KEG Income Trust (KEG.UN)
Coca-Cola (KO)
Liquor Store (LIQ.TO)
McDonald's (MCD)
Manulife Financial (MFC.TO)
MCAN Mortgage Corp (MKP.TO)
Qualcomm (QCOM)
Royal Dutch Shell (RDS.B)
Saputo (SAP.TO)
Suncor (SU.TO)
Unilever (UL)
Ventas (VTR)
WestJet (WJA.TO)
Waste Management (WM)

In December we received a total of $973.73 in dividend income from 32 companies. Of the $973.73 received, $342.64 was in US dollar and $631.09 was in Canadian dollar. 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 currency rate.

Dividend income Dec 2015

Dividend Growth
Compared to December 2014, we saw a YOY growth of 34.16%. Our dividend growth is contributed by three things - investing fresh capital, purchasing of additional shares through dividend reinvesting plan (DRIP), and increasing of individual stock's organic dividend payout each year. We see DRIP as a very effective way to utilize the power of compound interest. Since we use discount brokers like TD and Questrade, we can only enroll in synthetic DRIP, meaning only full stock shares are purchased instead of partial shares. Because of this, we need to ensure that dividend received is equal or more than the stock price. I'm extremely pleased to see that enrolling in DRIP allowed us to purchase additional 17 shares of dividend paying stocks in December and increase our annual dividend income by $24.44. If you think this is an insignificant amount of money, think again! With a conservative 3% dividend yield, adding $24.44 in our annual dividend income means we would have had to invest $814.67 of fresh capital. Every little amount adds up in the long run.

Moving Forward
In 2015 we received a total of $10,318.02 in dividend income or an average of $859.83 per month. Wow! That amount just blew me away! We accomplished our goal of receiving $10,000 in dividend in 2015. It's a great feeling to have accomplished this challenging goal. It feels totally awesome to know that we received over $10k for doing absolutely nothing at all. Our money did all the heavy lifting for us, gotta love that! 🙂 To put this into perspective, at $20 per hour wage, our 2015 annual dividend income would save us 515.9 hours, or an equivalent of 21 days. That's over 4 weeks of actual work day! Even at $48.08 per hour wage (equivalent of $100,000 annual income), that would correspond to almost 9 days of work days. Best of all, most of the income are generated in RRSP or TFSA, so we don't have to pay any taxes at all. Even the income generated in regular accounts, because dividends are very tax efficient, we will be paying very little taxes.

Compared 2015 and 2014 annual income, we went from $8362.30 to $10,318.02, or an equivalent of 23.39% increase. I'm extremely happy to see such HUGE increase. Imagine asking your employer that you want a +20% raise! I'm sure most of the time you would be told to get lost. Thanks to our continued savings and continued investing, such amazing growth was possible. I can only smile and feeling proud about our progress when looking at the chart below.

[show-rjqc id="1"]

So what lies ahead for us in 2016 when it comes to dividend income? We plan to continue saving and continue investing. After all, why fix it if it's broken? The stock market is off to a very negative direction so far in 2016. Since we're still in the accumulating phase of building our portfolio, the downtrend is actually a good thing to encounter. Why? Because this means we can continue building our dividend portfolio by buying stocks at a discount. In terms of 2016 annual dividend income goal, we are setting the bar very high this year to challenge ourselves. We are setting a 2016 dividend income goal of $13,000, or ~30% growth compared to 2015. Generating an additional $3,000 in dividend income will mean that we need to contribute $100,000 of fresh capital if we use a 3% dividend yield rate. Even at 5% yield rate, that's $60,000 needed in fresh capital. In any case, we will need to save and invest a lot of money to accomplish this challenging goal. I'm filled with excitement and can't wait to get started. 🙂

Dear readers, how was your Dec dividend income?

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  • Reply
    January 11, 2016 at 7:02 pm

    Hi Tawcan,
    Congratulations thats a great YOY dividend growth.

    Can you please help me understand this. I am considering buying energy ETF I-shares global energy producer FILL. Its holdings are great energy companies and it is in a really good price at the moment.
    I am a bit concerned as I can see its Net Asset is only 28 Million from yahoo finance. How does the asset size of ETF affects ?any idea, I only know if there is small volume the bid ask price can have big difference and can be volatile but other than this is there anything I need to focus on before I buy this ETF? I would appreciate your information

    • Reply
      January 12, 2016 at 12:46 pm

      Hi Dipu,

      Thanks. Regarding FILL, can't say I know too much about it. On iShares' site the net asset is only $25 million, probably affected by the decreasing energy sector. Personally I would be slightly worried about the small net asset as the trade volume is quite small compared to other ETF's. In the unlikely case that you need to sell this ETF, it might be more challenging. Any reason you want to have FILL on your radar rather than IXC or VDE?

    • Reply
      January 12, 2016 at 1:57 pm

      Hi Tawcan,

      Thanks for the advice. I really didn't have any specific reason to go for I shares FILL other than its holdings as I do not have enough knowledge about ETF's net asset other than small assets means more volatility and difficulty to sell. Anyways I didnt push the trigger I rather went for Fidelity FENY as it has similar holding as VDE including phillip 66 and valero as its top 10 holdings.

  • Reply
    January 11, 2016 at 7:42 pm

    Tawcan - congrats! It must feel great to break that $10k/5-digit mark. Having just started out and I think I am around your 2009 or 2010 point on the graph. Fingers crossed I can get to $10k of dividend income in 5 years.

    • Reply
      January 12, 2016 at 12:47 pm

      Hi Tom,

      Thanks. It's a good time to start out right now as the market condition allows you to buy some stocks on sale. 🙂

  • Reply
    January 12, 2016 at 1:19 am

    Impressive results all around. Nice income for the month, great year over year growth and a nice five figure passive income stream. What's not to like? Keep on buying those solid dividend payers. Look forward to following your progress in 2016.

    • Reply
      January 12, 2016 at 12:48 pm

      Hi DivHut,

      Thanks, definitely need to continue saving and investing in 2016.

  • Reply
    January 12, 2016 at 3:30 am

    Great job! The sum total of your dividend income last year was some total. 😀 I think your goal for this year is achievable. All the dividend growth stocks you hold should help give you some extra help. My December was pretty good. I made about $600 in dividends. One of the highest months of the year. 🙂 I'm thinking about writing a post soon about how great dividend investing is and want to feature successful dividend investors like yourself if you don't mind.

    • Reply
      January 12, 2016 at 12:49 pm

      Hi Liquid,

      $600 is pretty solid. Definitely would love to get featured on your great blog. Give me a shout.

  • Reply
    My Own Advisor
    January 12, 2016 at 6:33 am

    Very well done!

    We earned just shy of $12,000 last year in dividend income. We hope to surpass $14,000 by the end of 2016 although that will be a stretch given many companies might not raise dividends this year - they will continue to pay them, just not big hikes. That could be just me!

    We continue to save and invest in 2016 like you and if we can keep up a solid savings rate, I'm sure you'll hit your goal.

    • Reply
      January 12, 2016 at 12:50 pm

      Hi Mark,

      I thought we'd catch you guys this year but still quite a bit away. $14,000 by end of 2016 would be totally awesome. I think our 2015 dividends would be higher if we didn't see COS and KMI dividend cuts. Oh well.

  • Reply
    Team CF
    January 12, 2016 at 8:49 am

    Congratulations on breaking the 10K boundary! We sincerely hope you can reach your new target for 2016. As you already noted, with a volatile stock market you can buy stock at (much?) lower prices, which could give you a yield far above the average assumed 3% (so your new target may be very much attainable). Now companies just have to be able to maintain and/or grow their dividends, fingers crossed.

    • Reply
      January 12, 2016 at 12:51 pm

      Hi Team CF,

      We're looking forward to our 2016 dividend goal and beating this goal. Hopefully the volatile stock market will continue for a little while so we can continue buying stocks at higher yield rate than usual.

  • Reply
    January 12, 2016 at 10:34 am

    Thats amazing you crossed the $10K mark for the year. Keep up the great work, Tawcan. Wishing you the best for 2016 and beyond


    • Reply
      January 12, 2016 at 12:51 pm

      Thanks R2R for your kind words.

  • Reply
    January 12, 2016 at 12:21 pm


    Great numbers for december and 2015. great to see that you passed your 2015 goal and soon you will pass the 4 digit milestone in 1 month. also you have great YoY growth.

    Keep the snowball rolling for you.

    Sharon - Divorcedff

    • Reply
      January 12, 2016 at 12:52 pm

      Hi Sharon,

      The 4 digit per month milestone would be huge, we're very much looking forward to that.

  • Reply
    January 12, 2016 at 2:03 pm

    Congrats for breaking the $10k barrier in 2015! It won't be long before you will have regular 4 digit monthly income streams coming in. The 34% YOY increase for December is very impressive. I really appreciated your example of how long one would have to work to earn the same amount of income. It really drives home the power of having your investments working for you and growing their earning potential via regular contributions. Keep up the great work! Cheers, DN

    • Reply
      January 14, 2016 at 2:25 pm

      Thanks Dividendniche.

  • Reply
    January 12, 2016 at 3:55 pm

    Congrats on smashing your 10k! All the best for your 13k goal! (sorry if this appears twice, had some problems commenting)

    • Reply
      January 14, 2016 at 2:26 pm

      Thanks weenie, only showed up as one, no worries.

  • Reply
    Tristan @ Dividendsdownunder
    January 16, 2016 at 4:35 pm

    An amazing achievement, nice job Tawcan! It must feel amazing to look at that graph and see how far you've come and now you're receiving large amounts every month which can add even more investment money.

    I hope I can earn as much as you are some day.


    • Reply
      January 17, 2016 at 4:01 pm

      Thanks Tristan. I have lots to learn still too.

  • Reply
    Investment Hunting
    January 17, 2016 at 12:01 pm

    Awesome year-over-year growth Tawcan. You annual dividend increases are truly inspiring. Keep it up.

    • Reply
      January 17, 2016 at 4:04 pm

      Thanks Investment Hunting.

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