Bang! Just like that the 1H of 2019 is in the books. In case you’re new here, I am doing these monthly updates to keep us honest and demonstrate that it is possible to build up a sizable dividend portfolio so it generates sufficient dividend income to cover our expenses. When our dividend income and other passive income exceeds our annual expenses, we can call ourselves financially independent. In the last few months, I have decided to share some financial independence journey numbers to give readers a sense where we’re at on our financial independence journey. I hope sharing these numbers is helpful.
In case you’re wondering, we have been busy harvesting fresh produce from our backyard garden throughout the month of June. The strawberries from the backyard are so sweet and delicious, I’d take them over any store bought strawberries any day. As you have probably guessed, we have been vegetarian meals over the last few weeks.
Since most of the year in Vancouver is cold, cloudy, or/and wet, we have been spending a lot of time outside now the weather is finally warmer and dry. Baby T1.0 and I participated in a Scouts camping trip one weekend. As a youth, I was involved in Scouts for about 10 years, going to many different camps & jamborees, and earning different Scouting awards. Now as a leader, it has been neat for me to be able to teach the youths some skills I’ve learned. As mentioned in a previous post, one of my Scouts leaders made a huge impact in my life. I hope to do the same for some of these youths.
Mr. T, Baby T1.0, Baby T2.0 and I also spent a weekend in one of the BC provincial parks. Unlike the last time we went camping in May, it was dry for the entire weekend! The kids had a lot of fun playing by the lake and roasting marshmallows. They even set up a fake campfire of their own and pretended to roast apples over the fake fire. LOL!
Dividend Income – June 2019
June was a VERY busy month in terms of dividend payments. We received dividend payments from the following companies to help with our financial Independence journey:
- Brookfield Renewable (BEP.UN)
- Canadian National Railway (CNR.TO)
- Canadian Tire (CTC.A)
- Canadian Utilities (CU.TO)
- Chevron (CVX)
- Dream Office REIT (D.UN)
- Dream Industrial REIT (DIR.UN)
- Dream Global (DRG.UN)
- Enbridge (ENB.TO)
- Evertz Technologies (ET.TO)
- Fortis (FTS.TO)
- Hydro One (H.TO)
- H&R REIT (HR.UN)
- Intact Financial (IFC.TO)
- Intel (INTC)
- Inter Pipeline (IPL.TO)
- Johnson & Johnson (JNJ)
- KEG Income Trust (KEG.UN)
- Magellan Aerospace (MAL.TO)
- McDonald’s (MCD)
- Manulife Financial (MFC.TO)
- Magna International (MG.TO)
- Metro (MRU.TO)
- PrairieSkye Royalty (PSK.TO)
- Qualcomm (QCOM)
- RioCan (REI.UN)
- Saputo (SAP.TO)
- SmartCenteres REIT (SRU.UN)
- Suncor (SU.TO)
- Target (TGT)
- Unilever plc (UL)
- Visa (V)
- Waste Management (WM)
- Wal-Mart (WMT)
- iShares All countries ex Canada (XAW.TO)
- Exco Echnologies (XTC.TO)
Phew, that’s a long list! In total, we received 36 pay cheques which added up to be $2,099.94. And just like that, we have crossed the $2,000 monthly dividend milestone!!! Woohoo! Not to mention that we were only $0.06 off the $2,100 monthly dividend milestone. Darn it, we were so close! It’s absolutely amazing to crack the $2,000 monthly dividend milestone and knowing that we almost cracked the $2,100 milestone too.
Of the $2,099.94 received, $341.47 was in USD and $1,758.47 was in CAD. That’s about a 15/85 split. As long time readers already know, we use a 1 to 1 currency rate approach. We do not convert dividends received in USD to CAD, because we want to keep the math simple. This is our way to avoid fluctuations in dividend income over time due to changes in the exchange rate.
The top 5 dividend payouts in June 2019 came from iShares Core MSCI All Countries ex-Canada index ETF, Suncor, Manulife, Enbridge, and Inter Pipeline (not in order). Dividend payout from these 5 companies accounted for $1,082.40 or 51.5% of our June dividend income total.
Compared to May 2018, we saw a 24.2% YoY increase. After last month’s below 20% YoY performance, it was nice to see that number to be above 20% again.
As you may recall, our dividend income goal for 2019 is $23,000. Given that we received $18,723.29 in dividend income in 2018, we would need a minimum of 22.7% YoY growth to hit this ambitious goal. With 2019 half way over, we are averaging a 25.03% YoY growth rate. If we can continue with this YoY growth rate for the rest of the year, we would end up with $23,409.73 in dividend income for 2019. Therefore, I’m cautious optimistic that our 2019 dividend income goal.
June was a quiet month when it comes to dividend, only one company that we own raised dividend payout:
- Target raised its quarterly dividend by 3.13% to $0.66 per share.
This added over $5 toward our annual dividend income. It may not be significant but a raise better than nothing at all. Let’s hope we will see a few more payout increases in August.
Dividend Stock Transactions
Throughout the month, purchased few shares of VCN.TO and XAW.TO here and there to take advantage Questrade’s commission free ETF trading. On June 25 I woke up and saw that AbbVie had dropped by over 16%. With some US cash sitting on the side, I decided to purchase 19 shares of AbbVie. This particular purchase added $81.32 toward our annual dividend income. The stock price has since recovered slightly but we’ll see if the acquisition of Allergan is a good idea or not in a few years’ time.
When I reviewed our 1H 2019 stock purchases, turned out we have already added over $50,000. I’m a bit surprised that we added this much money so far in 2019 already. It just to show you how easy saving and investing are if you put everything on autopilot! We plan to add more money for the rest of the year but that cash contribution rate may start to slow down as we ramp up saving money for ourTFSA contributions in 2020.
Financial Independence Journey Progress
The $2,099.94 dividend income received in June was able to cover 26.2% of our total spending in June. The ratio was extremely low for June due to 2 reasons. One, we spent over $4,000 on our plane tickets to Denmark later this year (gotta visit Mrs. T’s family). Two, we paid the $500 deductible to repair our car due to the hit-and-run damage. If we only look at our necessities spending, however, June dividend income was able to cover 66.1% or 78.4% if we take out the $500 deductible. It’s nice to see that our dividend income was able to cover more than 50% of our necessities, despite a big unplanned expense.
Utilizing dividend income to pay for our core expenses can totally be done. I believe we can cross that threshold in a few years.
With 1H 2019 in the books, we have received a total of $11,039.93 in dividend income. If we just double that amount, that means we’d end up with $22,081.32 in 2019. Given that we have invested over $50,000 so far in 2019, I’m optimistic that we will end up with more than $22k. Therefore, I am hopeful that we can accomplish our 2019 dividend income goal of $23,000.
It’s also amazing to see that we already exceeded the 2015 annual dividend income amount and only about $1,500 off the 2016 annual amount. We certainly have come a long way when it comes to dividend growth investing.
In case you’re wondering, at $40 per hour salary, $11,039.93 means our dividend portfolio has saved us almost 276 hours of work, 34 days, or almost 7 weeks. Gotta love having our money working hard for us, so we don’t have to!