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.
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)
Dream Office REIT (D.UN)
Dream Global REIT (DRG.UN)
EnergyPlus Corp (ERF.TO)
Evert Technologies (ET.TO)
H&R REIT (HR.UN)
Intac Financial (IFC.TO)
Inter Pipeline (IPL.TO)
Johnson & Johnson (JNJ)
KEG Income Trust (KEG.UN)
Liquor Store (LIQ.TO)
Manulife Financial (MFC.TO)
MCAN Mortgage Corp (MKP.TO)
Royal Dutch Shell (RDS.B)
RioCan REIT (REI.UN)
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.
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.
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.
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?