Dividend Income – Feb 2016 Update

I’ve always thought it’s super cool to be born on Feb 29th. How cool would it be to tell people that you’re 5 years old but in reality you’re 20? (Yes I’m weird this way. :p) I didn’t tell Mrs. T but I was secretly hoping that Baby T2.0 would be born yesterday. That didn’t happen so Mrs. T and I were able to spend quality time together after Baby T1.0 went to bed. Since Baby T2.0 is full term already, we’re just playing the waiting game. Mrs. T and I are certainly trying to enjoy the last few days of quiet times. We don’t know what having two kids would be like but we’re both very excited. Given that we have some experience with having a little baby already, we believe things will be easier this time around. 🙂

Anyway, let’s get back to the topic of the post shall we? 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. We can be running around after Baby T1.0 and changing diapers for Baby T2.0 while our money is working hard for us, generating more money. Who doesn’t like that?

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

Apple (AAPL)
Pure Industrial REIT (AAR.UN)
Bank of Montreal (BMO.TO)
Corus Entertainment (CJR.B)
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)
Potash (POT.TO)
RioCan REIT (REI.UN)
Royal Bank (RY.TO)
AT&T (T)
Vodafone (VOD)
Verizon (VZ)

We received a total of $1,004.29 in dividend income from 22 companies. Of the $1,004.29 received, $294.05 was in US dollar and $710.24 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 exchange rate.

dividend income Feb 2016

OH MY GOD!!! This is the first time ever that we crossed the $1,000 dividend income in a month milestone! (I don’t consider March 2014 because we received special dividends) I’m thrilled to see that we finally crossed this special & key dividend milestone. Considering the recent dividend cuts in stocks like Kinder Morgan and Potash, I was worried that our February monthly dividend income would take a big hit. Fortunately the combination of new purchases and organic dividend growth in other stocks helped pushing our February dividend income over the $1,000 mark by just a few dollars. Phew!

 

Dividend Growth
Compared to February 2015, we saw a YOY growth of 15.75%. Pretty solid but we’d love to see that number to be closer to 20. For those of you that are new, 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. I’m extremely pleased to see that enrolling in DRIP has allowed us to purchase additional 12 shares of dividend paying stocks this month. The 12 new shares will increase our annual dividend income by $30.31.

$30.31 more in annual dividend income? What’s the big deal? That’s such a small amount, you may have thought.

Think again! Given a conservative 3% dividend yield, it would take $1,010.33 to generate this amount. What does this mean? It means we didn’t have to save $1,000 and invest it in dividend stocks because we took advantage of DRIP. It also means that the $1,000 that we set aside in the future can be used to buy more dividend stocks and generate more dividend income. Essentially we can generate double in dividend income for half the dollar amount invested. That’s the type of leverage I would use any given day.

Although we have seen some dividend cuts and freezes in some of our holdings, a number of stocks have increased their dividend payouts in February as well. This include BCE Inc, Manulife Financial, TransCanada Corp, Coca-Cola, Wal-Mart, Enbridge, Royal Bank, TD, CIBC, Magna International, and Waste Management. That’s 11 companies that have increased dividend payout in month of February! Wow! That’s fantastic! The largest 3 increases are Enbridge at 13.98%, Magna International at 13.64%, and Manulife at 8.82%. As owner of these dividend stocks, I’m ecstatic to see these increases.

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Moving Forward
So far in 2016 we have received a total of $1,856.31 in dividend income. We’ve already added around $19,000 into our dividend portfolio this year but there is a lot more work to do in order to reach the $13,000 annual dividend income goal. We plan to sell a few stocks that have cut their dividends and use the money to purchase other dividend stocks. We also have some money set aside ready to purchase more dividend stocks. Now that the RRSP 2015 contribution deadline is over, we can start contributing money into our RRSP toward the 2016 tax season. We hope the market will continue to be volatile so we can purchase stocks at a discounted price.

Dear readers, how was your Feb dividend income?

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62 thoughts on “Dividend Income – Feb 2016 Update”

  1. Congrats on hitting $1,000 in dividends! That’s awesome. That would cover my expenses a lot of months! Also congrats on the new baby!

    Reply
  2. TAWCAN!!!!

    YOU DID IT!!! YES! YES! YES! YES! 4 digit figures WOW!!! In February too, YES! Congratulations, well deserved, hard working, much research and passion went into this. You are killing it! this is awesome, HUGE HUGE HUGE! Keep it up and congrats on the newborn!!!!

    -Lanny

    Reply
  3. Hey Tawcan,
    Do you consider dividend income both in registered and non-registered (RRSP and TFSA) accounts?
    I am about $1000/Mo in non-reg, but I receive about ~$5000/yr of income in my RRSP account. I dont really think about this as “income” because it is auto invested to buy more of the same (low cost) e-series funds. My non-reg divs build up, when they get to about $1000 I just manually buy more of what seems “on sale” Great work on the income! Mark (Canadian in Amsterdam)

    Reply
    • Hi Mark,

      Right now we consider dividend income from RRSP, TFSA, and no-reg. All the dividends are reinvested fully. We’re working to build up our non-reg dividend income. Are you permanently in Amsterdam? How does that work when it comes to taxes and such? Would love to get more info from you.

      Reply
  4. Hello Tawcan,
    I ‘ve been following your story from the side lines so I will share my story… My wife and I have been living in Amsterdam almost 4 yrs since leaving Calgary in 2012. I am a non-resident for tax purposes paying my income tax in the Netherlands. I still file taxes in Canada because I am taxed 25% on any net rental income (house is rented at arms length). I also submit my 15% tax on my non-reg dividends to the CRA. Since 2012, I do NOT contribute to my RRSP or TFSA as I am no longer allowed to contribute as a non-resident. In Canada, I only invest my net rental income and dividends back into the market via my TDwaterhouse account (primarily div paying stocks like Banks, T, BCE, TRP, VAB). I have a couch potato RRSP portfolio I re-balance occasionally.

    My savings (I get paid in Euros) here in NL stay in Europe and are invested 100% in Vanguard VHYL using my TD Waterhouse account in Luxemburg. That fund is paying about 3.8% divs. I current re-invest those funds too. I have just over 2 yrs to run on this contract. By mid-2018 I should have about $1.4MM Can in reg and non-reg savings split about 1/2 in Canada and 1/2 in Europe (Euros). I paid my house off 2 yrs ago. So I am hoping to switch to part-time work in 2018. Living part time in Canada and part time in Europe. By then I will be 47 yrs old 🙂
    Hope that makes sense? Its a bit of a complex story.
    Keep up the great saving and inspirational blogging.
    Mark.

    Reply
    • Hi Mark,

      Thank you very much for the kind words. Interesting that you are doing non-resident approach. Considering that we plan to travel around the world in the future, that’s an approach we might have to look into. Did you consult with a tax expert before you moved to Amsterdam? Love that you’re getting paid in Euros and have assets in Canadian. That’s hedging in my books and you’re certainly protecting yourself from currency fluctuation. Living part time in Canada and living part time in Europe sounds like a great idea! Do you have a PR status for EU? Or are you an EU citizen somehow?

      Reply
      • Tawcan,
        Congrats on the new addition to the family, hope everyone is doing well. To follow up, I have both Canadian and UK (by birth) passports. So I am here on my UK passport. However, as a Canadian you could get a working visa in NL with no issues. I did get some specialist advice before I left, though I got slightly different advice from different sources. But we are tying to be as compliant as possible. I don’t add to my RRSP or TFSA’s to avoid going offside. Also, I have not sold anything in my non-reg accounts since leaving in 2012, only buying. I pay tax on my Can divs each year. I am also very transparent with my rental income to the CRA. So hopefully we have no issues when we return. I sent quite a bit of money to Canada in the first 18 months to pay off the LOC on the Calgary house. Now I dont send anything back as I dont really need the cash there and I just invest the net income from the house into Can div stocks.

        Keep up the great work and growing the income!
        Any thoughts on the Vancouver housing market? Its going the opposite way from Calgary!
        Mark.

        Reply
        • Hi Mark,

          Thanks, always appreciate you dropping by and leaving a comment. I’ll have to look into getting a working visa in Denmark since Mrs. T and our kids have Danish passport to allow them staying there. Makes sense that you’re not adding to your RRSP And TFSA. Not selling anything in non-reg accounts make sense too. I think the key is to be as transparent as possible to avoid CRA audit.

          Vancouver housing market is just nuts. I think it’ll continue climbing for a while.

          Reply
  5. Hey Bob, just came across your site and am enjoying your articles. I think we’ve met before sometime as I recognize your picture but I can’t put my finger on it!

    Just curious, do you ever share the total value of your portfolio, or the ROI on your dividends? I’d like to learn about that.

    Thanks very much.

    Reply
    • Hi Chris,

      No I don’t think we’ve met before but maybe I am wrong. I don’t share total value of our portfolio and ROI as want to keep that info private. We are sharing a lot of financial numbers on this site already, so want to keep some stuff confidential.

      Reply

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