Dividend Income – April 2016 Update

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. šŸ™‚

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

Pure Industrial REIT (AAR.UN)
Agrium (AGU.TO)
BCE Inc. (BCE.TO)
Bank of Nova Scotia (BNS.TO)
Corus Entertainment (CJR.B)
CIBC (CM.TO)
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)
Coca-Cola (KO)
Liquor Store (LIQ.TO)
Rogers (RCI.B)
RioCan REIT (REI.UN)
Telus (T.TO)
TD (TD.TO)
TransCanada Copr (TRP.TO)
Domtar Corp (UFS.TO)
Wal-Mart (WMT)

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.

Dividend income April 16

Dividend Growth
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.

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. šŸ™‚

Dear readers, how was your April dividend income?

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42 thoughts on “Dividend Income – April 2016 Update”

  1. Thanks for letting us follow your journey. Unfortunately, I am not familiar with some of these companies (I assume they are Canadian), but happy to have a similar long term goal in mind!

    -TDM

    Reply
  2. Awesome job Tawcan. Don’t stop! Congrats on baby 2 and hope you’re enjoying the ride. Cheers bud.

    Reply
  3. Awesome job for April. You are really rocking and rolling over there… and yes, it’s nice getting paid while changing diapers. I know all about that šŸ™‚ Nice to see your 2016 buys are plentiful too. Keep sticking with the quality names and enjoy watching that passive income grow. Thanks for sharing.

    Reply
    • Hi DivHut,

      Rocking and rolling but wishing we can get more income. It’s certainly comforting to know that we’re getting paid regardless what we’re doing.

      Reply
  4. Congrats on another good month, keep changing those diapers and keep getting paid! Great work and congrats on #2.

    The Green Swan

    Reply
  5. Very well done. That’s a LOT of buying since the start of the year! We’ve started to save up, a little bit, for 2017 TFSA contribution room ($11k) so no new buys non-registered and inside TFSA.

    Keep the pedal down šŸ™‚
    Mark

    Reply
    • Hi Mark,

      Thanks! Most of these purchases in 2016 are all inside TFSA and RRSP. We’re planning to start buying in non-registered once we max out the RRSP contribution room. Keep the pedal down indeed!

      Reply
  6. Excellent numbers again! The ball starts to roll really hard now.
    It must feel good to get money to change a diaper…!

    The perspective you bring on bigger portfolios is true… at a certain size, getting big YOY increases gets more difficult.

    Reply
    • Hi ambertreeleaves,

      Thanks! The snowball is getting bigger and faster now. The power of compounding is pretty amazing.

      Reply
  7. Being able to see your Income grow and know it will be higher the next month\Quarter regardless of market conditions is what makes this strategy work. Keep reinvesting those dividends and add to your positions. If Sideways market for the next few years becomes a reality, you’ll continue to see growth and buy more shares when prices drop.

    Reply
    • Hi Cannew,

      That’s why I like dividend income so much. As long as the companies keep paying the respective dividends, you’ll get income regardless.

      Reply
  8. Hello: Congratulations on the new family addition. I enjoy and learn from your posts. I was just looking at your portfolio and on the main page, it says ” We are currently investing in 59 companies and 2 index ETF.”
    while your latest update says you get dividends from 21 companies. Is the list of 59 companies out of date? I was interested in seeing your complete portfolio.

    Reply
    • Hi helen7777,

      We own 59 companies and 2 index ETFs. Since not all companies pay dividend at the same time, that’s why we only received dividends from 21 companies in April. If you go back to our other dividend income updates, you’ll see dividends received from number of companies varies each month.

      Reply
  9. I really enjoy the way you lay out the post. As you know I am now starting my dividend investing career at the age of 22! I have learnt a lot from your blog and can tell that the compounding effect is working wonders! I have seen Telus on a number of Canadian Dividend bloggers and am really curious about the stock. Got a really beginner question for you. I can purchase Canadian stocks with my American brokerage firms as a normal transaction right? Not sure if the purchasing/tax implications are different.

    Reply
    • Hi Stefan,

      I think a number of Canadian stocks are listed in the US market too. For example Telus is listed as TU on NYSE. If you hold Canadian dividend stocks in regular account you’ll have to pay the 15% withholding tax. If you hold the stock in your 401(k) then you don’t have to.

      Hope this helps.

      Reply
  10. wow! That’s some great income for diaper changing! Mr. PIE and I are just starting to realize that we need to understand dividends better as a source of income – especially once we reach FI. Any resources you can recommend for reading and learning?

    Reply
  11. Man y’alls monthly dividend totals are looking awesome. Soon they’ll all be over $1k per month but that’s fantastic that April saw you get over $1k. Even better is that it came while changing diapers! All the best!

    Reply
  12. You’re so very close to being on track for your goal for the year — I think you’ll make it. šŸ™‚ We have recently started tracking dividends more closely, not because we’re shifting to dividend investing (we’re still happy with our index strategy), but because we want to have a better sense of how much dividend we can expect our index portfolio to generate a year. Since we have to pay income taxes on dividends regardless of whether we cash them out, we figure those should be our first line of income in retirement, and then only sell whatever shares we need above and beyond the dividends, to minimize our capital gains taxes.

    Reply
    • Hi our next life,

      Yes very close to be on track, gotta work hard to get on track though. Given you track everything I’m a little surprised that you haven’t tracked your dividends from index funds until now. It’s definitely a good idea, even Justin at Root of Good tracks dividend income from index ETFs.

      Reply
  13. That’s a great April! I’m a bit jealous and hope to get there in a few years. Lots of purchases in 2016 that will hopefully spur some growth towards the end of the year and get you to that goal!

    Reply

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