I hope everyone’s enjoying their summer. After a wet and cold June, it was nice to have a warmer and sunnier month.
Before we get into dividend income for July, let’s me continue the typical summer trend – showing off our backyard garden!
Thanks to all the sun in July, our backyard garden exploded!
Throughout July, we were busy tending the garden and harvesting vegetables, berries, and herbs from our backyard. Nothing beats freshly picked potatoes, cauliflower, and zucchini.
As you’d expect, many of our meals consisted of produce from the garden which has kept our grocery expenses down and not having to worry too much about the high grocery cost due to inflation.
In my Q2 goals and resolutions update, I pointed out that I’ve been nursing an abdominal and back injury since mid-April. After months of resting and taking it easy, I finally felt well enough to start working out with a kettlebell and pushing myself more.
Let’s hope the nice weather continues in August and we can enjoy produce from our backyard garden. It’s amazing how much you can grow when you have a small plot of land. I think more people should grow produced in their garden instead of having a green luscious lawn.
Dividend Income – July 2022
Alright, enough life update, back to dividend income update should we? In July we received dividends from the following companies:
- Algonquin Power & Utilities (AQN.TO)
- BCE Inc (BCE.TO)
- Bank of Nova Scotia (BNS.TO)
- CIBC (CM.TO)
- Canadian Natural Resources (CNQ.TO)
- Capital Power (CPX.TO)
- Dream Industrial REIT (DIR.UN)
- European Residential REIT (ERE.UN)
- Granite REIT (GRT.UN)
- Coca-Cola (KO)
- Power Corp (POW.TO)
- Rogers (RCI.B)
- RioCan REIT (REI.UN)
- SmartCentres REIT (SRU.UN)
- Telus (T.TO)
- TD (TD.TO)
- TC Energy Corp (TRP.TO)
- VIC Properties (VICI)
These 18 dividend paycheques added to $4,528.69. Woohoo, we have a new monthly dividend record! It’s amazing to hit the $4,500 monthly dividend milestone knowing that we crossed the $4,400 milestone back in January.
Compared to dividend income from July 2021, we saw a YoY increase of 38.49%. I’m amazed at our YoY growth rate so far this year and I’m grateful that we were able to add around $207,000 worth of dividend stocks throughout 2021.
Out of the $4,528.69 dividend income received, $273.92 was in USD and $4,254.77 was in CAD or about a 5-95 split. July’s dividend income was very CAD heavy. Please note, we do not convert USD to CAD when reporting our dividend income. We are doing this to keep the math easy and to avoid fluctuations in our monthly dividend income caused by changes in the exchange rate. Over the last while, we haven’t been converting CAD to USD. Instead, we usually would collect USD dividends, wait for the money to accumulate, and purchase more US dividend paying stocks. Maybe we need to consider exchanging a large sum of CAD to USD when the exchange rate is good by using the Norbert’s Gambit?
In July, the top five dividend payers were Algonquin Power & Utilities, BCE, Bank of Nova Scotia, CM, and TD (not in order). These payments accounted for $2,931.82 or 64.7% of our July dividend income.
Dividend Stock Transactions
The market remained volatile throughout July so we took advantage of it and purchased the following stocks.
- 194 shares of Manulife Financial
- 4 shares of BlackRock
About $7,000 was deployed for these two transactions. This also meant that since the beginning of 2022 we have purchased over $90,000 worth of dividend paying stocks.
These two purchases added $334.16 toward our annual dividend income.
Like other years, I anticipate our dividend stock purchases to slow down in the second half of 2022. This is mostly due to us setting money aside to prepare for next year’s TFSA contribution room. Given the high inflation rate, it’s a given that next year’s TFSA contribution room will be $6,500. I do wonder if it’s possible that we’ll see the contribution room increase to $7,000 due to the higher than expected inflation rate. I guess we’ll have to wait and see.
Dividend Reinvestment Plans (DRIP)
Recently AlexDividend asked the following question on Twitter
That logic makes a lot of sense to me but it definitely takes up more time and effort. For us, we set up all of our accounts to enroll in synthetic DRIP (buying full shares) whenever we’re eligible. It takes out any manual work involved. We drip additional shares whenever we’re eligible and get dividends deposited in our accounts when we’re ineligible to DRIP. It’s simple and works well for us. But since personal finance is personal, this approach may not work for everyone.
In July, we were able to drip the following stocks:
- 29 shares of AQN.TO
- 4 shares of BCE.TO
- 7 shares of BNS.TO
- 6 shares of CM.TO
- 1 share of CNQ.TO
- 1 share of CPX.TO
- 1 share of ERE.UN
- 1 share of KO
- 5 shares of POW.TO
- 1 share of RCI.B
- 2 shares of REI.UN
- 5 shares of SRU.UN
- 8 shares of T.TO
- 7 shares of TD.TO
- 3 shares of TRP.TO
- 1 share of VICI
By enrolling in DRIP, we accumulated 82 additional shares in July and reinvested $3,267.61 of our July dividend income. In other words, we were able to reinvest 72.2% of our July dividend income.
Thanks to DRIP we added $169.06 toward our annual dividend income.
With seven months down, we have received a total of $25,173.82 in dividend income. That’s an average of almost $3,600 per month! This is really amazing considering we averaged a little under $3,400 in our core expenses so far in 2022. We’re definitely on our way to eventually living off dividends in the near future.
Please note that core expenses do not include things like eating out, donations, vacations, or big purchases.
In 2021, after the same time period, we received $18,333.39 in dividend income. This means we’ve managed to increase our dividend income by $6,840.43 in a year’s time, or an increase of 37.3%!
To put the income received into perspective:
- Over half (58.6%) of the $25,173.82 is either tax-free or tax-deferred.
- After 212 days, our dividend portfolio generated $4.95 per hour or $118.74 per day.
- Assuming 31 work weeks, our dividend portfolio generated an equivalent of $20.30 per hour working rate. It’s nice to see that our portfolio is generating more than BC’s minimum wage of $15.65 per hour. Best of all, our dividend income is more tax efficient than working income.
With five months to go, I am pretty confident that we’ll crush our $36,000 dividend goal for 2022. There’s a pretty good chance we’ll end up with over $40,000 in dividends. Considering we received only $675.21 for the entire year of 2011, we have come a LONG way in the last 11 years.
Dear readers, how was your July dividend income?