Thank you for dropping by. It’s that time of the month where I share my favourite post of the month – our monthly dividend income. The reason for loving dividends so much is because once we own shares of these dividend paying businesses, we get paid regardless of what we are doing. We get paid when we’re on vacation, when we’re driving, when we’re working at our 9-5 jobs, when we’re taking a shower, or when we’re on eating dinner, it doesn’t matter what we’re doing, the money will just keep coming in. On top of that, most of these dividend paying companies raise their dividend payouts every year so our dividend income can keep up with the inflation and possibly beat it! No wonder I’m so happy like Dilbert and Wally in the above picture, having a celebration!
It’s amazing to see so many fellow bloggers utilizing the dividend growth investment approach. And it’s wonderful seeing these bloggers listing their dividend incomes each month and encouraging each other along the journey towards financial independence. This is why I love the personal finance/FI blogosphere.
Without further ado, Here’s a list of stocks that we received dividends in August 2015:
Pure Industrial REIT (AAR.UN)
Bank of Montreal (BMO.TO)
Chorus Aviation (CHR.B)
Corus Entertainment (CJR.B)
Canadian Oil Sand (COS.TO)
Dream Office REIT (D.UN)
Dream Global REIT (DRG.UN)
Energyplus Corp (ERF.TO)
General Mills (GIS)
H&R REIT (HR.UN)
Inter Pipeline (IPL.TO)
KEG Income Trust (KEG.UN)
Kinder Morgan (KMI)
Liquor Store (LIQ.TO)
National Bank (NA.TO)
Omega Healthcare (OHI)
Procter & Gamble (PG)
RioCan REIT (REI.UN)
Royal Bank (RY.TO)
In August we received a total of $927.24 in dividends from 23 companies with $338.57 in US currency and $588.67 in Canadian currency. It’s amazing to see that we broke the $900 mark for the second time this year! We also happened to received over $900 in dividend income for the second month in a row! Woohoo! I’m pretty excited about this awesome progress. Please note we use a 1 to 1 currency rate approach, so we do not convert the dividends received in US currency into Canadian currency. We’re doing this to keep the math simple and avoid fluctuations in dividend income over time due to changes in the currency rate.
We invest US stocks in our RRSP’s to avoid the 15% withholding tax. Most of the dividend stocks that we own are in tax-deferred accounts like RRSP and TFSA. We do hold some dividend stocks in regular accounts and we do not taken taxes into account when reporting dividends received in these accounts. Having said that, all the dividend stocks that we hold in our regular accounts are designated as eligible dividend so the tax rate will be minimum. Please consult to a tax expert when it comes to tax strategies.
Compared to dividend income from August 2014, we saw a 10% YOY growth. A pretty solid growth but we can certainly improve on this number. However, considering that we are receiving a significant amount of dividends already, having a significant amount of growth every month ma get tougher and tougher. For example, if we were to receive $1,000 per month in dividend, to get a 50% YOY growth means we’d need to get additional $500 per month the year after. This means that we need to inject new capital of $200,000 in our dividend portfolio ($500 multiply by 12 then dividend by 3% of estimated dividend yield). It would be a piece of cake if we can make millions of dollar each year like Bill Gates but we don’t, so having 50% YOY growth rate may not be feasible moving forward.
When compared to dividends received by end of August 2014, we see a growth rate of 19.9%. I’d be pretty happy if we can end 2015 with a roughly 25% annual dividend growth rate compared to end of 2014. We’ll have to wait and see if we can achieve this number or not.
It’s nice to see that we’ve been averaging roughly $800 of dividend income each month. This kind of predictability is great, especially during market volatility like we’re seeing recently. Our portfolio can be down but we will receive the dividends nonetheless. As long as we don’t sell any shares in our portfolio, and we typically don’t, we are guaranteed to receive dividends. This is the beauty of dividend!
So far this year we’ve received a total of $6,649.84 in dividend income. Pretty awesome considering that’s roughly $184.72 of income per week that we do not need to spend any time actively working to earn it. At $20/hour that means we saved up 9 hours each week. That’s 9 hours we can use to enjoy life. If we keep up this kind of weekly dividend rate, we should be getting close to $10,000 in total dividends for 2015. Receiving a 5 digit annual dividend income will be a huge milestone!
Thank you for reading and for your continued support. How was your August dividend income?