Dividends – A Canadian Dividend Investor’s Dream

Are you dividend investing in Canada? As Canadian dividend investors, my wife and I hold a combination of Canadian dividend paying stocks, US dividend paying stocks, and index ETFs in our dividend portfolio. Through this blog, I’d like to demonstrate that it is indeed possible to achieve financial independence through a diversified portfolio consisted of dividend stocks and index ETFs. It is our dream to one day live off dividends. When this happens, we can call ourselves financially independent. We’d also have the choice to decide whether we want to continue working full time, work part time, or retire early.

What are dividends

If you’re new to dividend growth investing, you’re probably wondering, what are dividends and why they are so attractive. When a company makes profits, there are a few ways of sharing these profits with its shareholders. The company can reinvest the money in the business, try to grow the business, and reward its shareholders by increasing the share price. The company can also share part of the profit with shareholders via a cash distribution, or a dividend.

When a company decides to share part of their profits with shareholders, the company’s board of directors determines how much of the profits are shared with the shareholders (i.e. dividend payout). Usually, companies pay out dividends quarterly. Some companies, like REITs, income trusts, pay out dividends every month. Some companies pay out dividends semi-annually or annually.

Companies that pay out dividends tend to be larger blue chip companies that want to reward their shareholders. Since dividends are paid out regularly, many investors, including us, plan to rely on dividends as an income stream. As long as dividends can grow over time and keep up with the inflation rate, investors don’t need to worry about the decrease in purchase power.

For example, say a dividend paying stock is trading at $50 per share and the company pay $2 per share of dividends each quarter. That means this dividend stock rewards its shareholders 4% ($2 divided by $50 equals 4%) dividends every three months. Assuming you own 100 shares of this dividend paying stock, or $5,000 worth, you would receive $200 every three months, or $800 a year. Now, imagine if you own 10 stocks with similar payouts, you’d get $8,000 in dividend income each year. Pretty sweet right?

What makes dividends even more enticing is that as companies grow their profits each year, they tend to increase their dividend payout. Instead of getting $2 per share of dividends, the company may increase its dividend payout by 5% to $2.10 per share. This increase allows dividend investors who are living off on dividends to keep up with the inflation rate.

One very important thing to note is that dividends are not guaranteed income. The company’s board of directors can decide to reduce or eliminate dividends if the company isn’t generating enough profits or when the company is trying to conserve cash during a bear market.

Assuming dividends are safe, essentially dividend stocks reward you for being a shareholder by paying you dividends regularly. This is the key attraction for owning a stock that pays dividends.

For this reason alone, we have decided to invest in these best Canadian dividend paying stocks so ensure our dividend income is stable and can continue to grow.

The important dividend dates for dividend growth investors

As a dividend investor, here are some of the key dividend dates you want to pay attentions:

  • Dividend Announcement Date: This is the date when a company formally announces how much dividends it will pay out. Dividends must be approved by the shareholders before they can be paid.
  • Ex-Dividend Date: This can also be called the ex-date. The ex-dividend date or ex-date is the date that the dividend eligibility expires. For example, if the ex-dividend date is on October 8, someone that buys the stock on October 8 or after this date won’t be eligible to receive the dividends.
  • Record Date: The record date is set one day after the ex-dividend date. This date helps the company to determine which shareholders are eligible to receive a dividend.
  • Payment Date: This is the date when the company issues the dividend payment. This is when the dividend cash is credited to the investor’s account.
TD dividends dates
An example of TD’s dividend dates

When it comes to dividends, many people get confused on the ex-dividend date. In the picture above, when the ex-dividend date is Thursday, Oct 8, you actually need to purchase the stock before this date, not on this date to be eligible to receive dividends on Oct 31. Why? The Securities and Exchange Commission (SEC) requires a trade to settle in three business days for a trade to settle (T+3). So when you purchase a stock, you technically don’t “own” the stock until three days later.

So, for you to be on the record as a shareholder of TD to receive the October 31 dividends, you need to be a stockholder as of October 9. Given that it takes three business days for the trade to settle, it means you must purchase the stock on October 6 or earlier (or two days before the ex-dividend date). If you are considering buying a dividend stock and counting on receive dividends for a specific payment date, make sure you purchase the dividend stock three days before the record date. I certainly made this mistake myself before.

Why do companies pay dividends?

Why would a company pay dividends when it can reinvest the profits and grow? For the most part, smaller growth companies do not pay dividends because they reinvest earnings back to the company to grow and to generate more profits. These companies reward their shareholders in the way of total return. For a mature company with stable earnings, reinvest 100% of its earnings back to the company may not make sense. So some mature companies issue dividends to share their profits with the shareholders.

Having said that, not all mature companies pay out dividends. For example, some mature companies like Berkshire Hathaway (BRK.A & BRK.B), Amazon (AMZN), and Alphabet (GOOGL) do not pay out dividends.

So why do companies pay dividends? Because by paying dividends, the company sends the message that the Board of Directors believes in the company’s future prospects and performance. In other words, paying dividends sends a clear message to investors that the company is financially sound. Paying dividends can attract a certain type of investors (like us), who value dividend distributions rather than waiting for capital gains.

Why dividends?

Why dividend investing in Canada? Because dividend income is very tax-efficient in Canada, especially when are living off dividends, and we don’t have any earned income from full-time or part-time work.

If you take a look at our dividend portfolio below, you’ll notice that we invest in both dividend-paying stocks and index ETFs.

We like dividends because of the following simple reasons:

  • Our portfolio is working hard for me to generate income so we don’t have to. This is truly passive.
  • Dividends are tangible. We can cash deposited in our accounts whenever a company pays dividends.
  • We plan to live off dividends, so we don’t have to touch our principals as we plan to pass down our dividend portfolio to future generations and create a long-lasting legacy.
  • Before reaching financial independence, we plan to reinvest all the dividends by enrolling in dividend reinvestment plans (DRIP) or reinvest dividends.
  • By buying dividend stocks, I am essentially creating my own index fund. The dividend income, therefore, is safer and predictable.
  • Canadian dividends are very tax efficient. In fact, by having some good strategies, you can pay almost no tax.
  • Dividends allow me to sleep well at night even when the stock market is very volatile.

After many years of investing in dividend-paying stocks and earning dividends, our dividend income can already cover some basic monthly expenses like groceries, car insurance, house insurance, property tax, utilities, term-life insurance, cell phone & internet, and car fuel.

As we continue to invest a significant amount of cash each year, I believe that living off dividends when we are in our 40’s will be possible.

dividends - living off dividends
Using dividends for a Maui vacation would be awesome!

Financial Independence

What do I mean by achieving financial independence via dividend and ETF investing?

Simple. Our goal is to earn sufficient dividends to cover our annual expenses. When this happens we can call ourselves financially independent and live off dividends without having to touch the principals. Who knows, maybe we can eventually pass our dividend portfolio to our kids and their kids too!

In case you’re curious about financial independence, here are some articles you can check out:

When we are living off dividends, for the first few years we probably will continue working either full time or part time to build up some buffers to give us some safety. Eventually, we may decide to retire early and work on our hobbies, volunteer our time, or even travel around the world.

The key thing here is that once we are financially independent, we are empowered to decide our own schedule, rather than having to rely on the employment paycheque every two weeks.

Dividend Income 

After reading a tons of information, you’re probably really curious how much dividends we have received over the years. I started dividend investing in 2007 by accident. We then got really serious with dividend growth investing and dividends in 2011. The jump in dividend income between 2011 and 2012 was a result of investing a significant amount of cash into our dividend portfolio.

When it comes to growing our dividend income, we have been relying on three different key drivers:

  1. Purchase more dividend-paying stocks with new capitals
  2. Organic dividend growth
  3. Reinvest dividends via dividend reinvestment plan and wait for dividends to accumulate to a big amount and purchase more dividend-paying stocks (see #1).

For now, the key driver for our dividend growths comes from the injection of new cash but it doesn’t mean we ignore points 2 and 3. Therefore, we are enrolled in DRIP whenever we are eligible. The dividend amount that does not get reinvested via DRIP right away, we wait till the amount is over $1,000 before reinvesting. We are doing this to keep the trading commission as a small percentage of the overall transaction cost.

We receive dividends in both Canadian and US currencies. For simplicity, no currency conversion is performed. In other words, we use a 1:1 USD to CAD exchange rate. This is to avoid fluctuation in our dividend income over time as exchange rate changes.

Tawcan dividend income Aug 2020 Summary
Tawcan dividends projection
Our dividends projection

2020 Dividend Income: $17,477.37

2019 Dividend Income: $23,049.16

2018 Dividend Income: $18,734.29

2017 Dividend Income: $14,834.38

2016 Dividend Income: $12,559.74

2015 Dividend Income: $10,318.02

2014 Dividend Income: $8,362.30

2007-2013 Dividend Income:

  • 2013 Dividends: $5,456.20
  • 2012 Dividends: $2,484.37
  • 2011 Dividends: $675.21
  • 2010 Dividends: $329.79
  • 2009 Dividends: $154
  • 2008 Dividends: $155
  • 2007 Dividends: $54

As you can see from the projection chart above, we are aiming to generate over $60,000 in dividends by 2025.

How much dividends do we need?

Just how much money does our dividend portfolio need to generate before it can cover all of our expenses and we can call ourselves financially independent? Although our dividend income already covers a bulk of our expenses, you’re probably wondering just how much dividends do we need to be financially independent. Do we need $40,000 in dividend income? Do we need $6,000 in dividend income? Or do we need more than $80,000 in dividend income?

Because dividends can be very tax-efficient, based on our annual expenses in the past few years (in 2019 we spent $54,906.02) and some financial independence assumptions, we think we need somewhere around $50,000 and $60,000 in dividend income to cover our expenses. To be on the safe side, I think if our dividend income can generate $60,000 per year, we’d be able to live quite comfortable. If our dividend portfolio can generate more than $60,000 a year, that’s even better and would give us even more margin of safety.

To generate $60,000 a year of dividends, we anticipate we need about a $1.5 million portfolio (market value). Given stock price appreciation dividend growth, and that we’re investing money over time, the actual amount of money invested should hopefully be less than $1.6 million.

And please note, I am not including Canadian government benefits like the Canadian Pension Plan (CPP) and Old Age Security (OAS) in the calculation. I simply see CCP and OAS as the extra gravy (or income) that we may get once we are 65 or older. We also plan to defer the Canadian government benefits to maximize these payment benefits.

Getting started with dividend investing

Back in 2011, I was taking in a wide variety of investing strategies from sources all over the internet, and I was really attracted to the simplicity of the approach that Canadian dividend stock investors like Million Dollar Journey were taking to planning their financial independence.

Prior to that point, I had purchased a couple of dividend stocks almost by accident, just because I thought they were good companies in general (I wasn’t yet aware of the finer points of valuation, P/E ratios, dividend growth records, or anything like that). But seeing how many Canadian authors were living simple satisfying lives in retirement or semi-retirement thanks to the dividend income that their portfolios spun off each year, was inspiring. The math behind it didn’t seem that difficult to grasp, and so I was off to the dividend income races.

I also began reading books like The Lazy Investor, and Common Stocks and Uncommon Profits, my wife and I subsequently became very interested in holding dividend paying stocks. We like the idea of becoming a shareholder of a company that produces products that we’d use on a daily basis. We also like the idea of getting paid regularly via dividends for owning these companies.

Since getting very serious with dividend investing and dividend income in 2011, I have read many invested related books. I have listed some recommended books here.

You can also take a look at a couple FAQ articles I have put together:

Our dividend investing approach

We invest in both Canadian and US dividend paying stocks and index ETFs. We are doing a hybrid invest approach, so we can select and pick dividend stocks that we like and use index ETFs to allow for asset and geographical diversification.

What makes dividend stocks and dividend income so enticing? Here are some of our reasons:

  • Our portfolio is working hard for me to generate income so we don’t have to. We’d avoid the need to touch our principals when we are living off our investment portfolio.
  • Dividends are real money and not some sort of play or funny money. Dividends are deposited in our accounts and we can use them to cover expenses.
  • We plan to pass down our dividend portfolio to future generations and create a long-lasting legacy. So not touching the principals is ideal.
  • I like having a predictable dividend income. With ETF distributions, the amounts are hard to predict.
  • We can pay no tax or very little of it when we live off dividends because Canadian dividends are very tax efficient.
  • By investing in dividend-paying stocks and receiving dividends regularly, I can prevent myself from wanting to sell when the stock market is volatile.

In 2020, our dividend income can already cover basic expenses like:

  • Food/Groceries.
  • Car insurance
  • House insurance
  • House property tax
  • Natural gas & hydro
  • Internet and phone
  • Term-life insurance
  • cell phone & internet
  • Car fuel
ExpensesPer MonthPear Year
Groceries$850$10,200
Car Insurance$200$2,400
House Insurance$100$1,200
Property Tax$400$4,800
Utilities$120$1,440
Term-life insurance$30$360
Cell phone & internet$90$1,080
Car fuel$150$1,800
Total$1,940$23,280

In fact, our dividend portfolio has been generating around $3 per hour in 2020, even when we are sleeping or vacationing. This is really amazing!

IMG 20180305 113940
Our dividend portfolio generates us money even when we’re hanging out on the beach

Which dividend paying stocks do we own?

We are doing a hybrid investing strategy by investing in a mix of US and Canadian dividend-paying stocks and index ETFs. This allows us to build our own dividend index ETF and utilize index ETFs to increase our asset and geographical diversification.

To build our dividend portfolio, we used methods outlined in this how to start investing in dividend paying stock tutorial. Essentially we purchase US and Canadian dividend-paying stocks that are in the top 10 or 20 holdings of key index ETFs like VCE and VTI. We also take a look at the different sectors and make sure we are sector diversified.

For the most part, we like to own companies that produce items that we’d use on an everyday basis. For example, banks, insurance companies, telecommunication companies, pipeline, utilities, etc. The more reliance we are on the product(s), it means the company has a wider moat. for example, people don’t typically switch their banks, so banks like Royal Bank and TD have a wide moat in terms of keeping their customers. Banks can also easily increase their revenues by increasing monthly service fees. Similarly, people rely on natural gas and must pay the likes of Fortis and Hydro One for house heating.

Keeping a simple investing strategy

Your ego is not your amigo. This is a quote I heard when I first started DIY investing. To be successful with investing and able to beat the indices, one must control their emotion. Therefore, I like to keep a simple investing strategy by following these simple rules:

  • Determine a list of dividend paying stocks that we are interested in owning. These include both Canadian and US dividend paying stocks.
  • Do as much research as possible to understand the business strategy and model. Determine how these companies make money and stay competitive in their industries.
  • Buy these dividend stocks and hold them.
  • Whenever possible, enroll in DRIP so dividends can be reinvested.
  • For the dividends not used in DRIP to buy additional shares, collect enough dividends then reinvest them.
  • Put things on auto-pilot. Avoid panic sales when there’s a market drop.
  • Deploy new capitals to buy more dividend-paying stocks
  • Collect dividends and reinvest
  • Repeat and repeat until we have enough dividend income to cover our expenses

Pretty simple right?

Which accounts to hold the different dividend stocks

For tax efficiency, we hold Canadian dividend paying stocks in RRSPs, TFSAs and regular accounts. All REITs and income trusts are held in TFSAs for tax efficiency purposes. All US dividend paying stocks and ADRs are held in RRSPs to take advantage of the tax treaty between Canada and the USA.

To summarize:

  • TFSA: Good for Canadian dividend paying stocks, REITs, and income trusts.
  • RRSP: Good for US dividend paying stocks, REITs, and income trusts.
  • Taxable: Good for Canadian dividend paying stocks that pay eligible dividends.

We don’t hold US dividend-paying stocks to avoid paying the 15% withholding tax. If you hold US dividend-paying stocks in your taxable account, you’ll pay tax at your marginal rate on any US dividends received. Essentially US dividends are treated like interest income which is taxed at the highest tax rate (i.e. your marginal rate). Although you get a foreign tax credit for the amount you received.

Expediting financial independence

Although we estimated that we’d need about $60,000 in dividend income to cover our expenses, we can certainly expedite our financial independence if we reduce our annual expenses. One of the ideas we have is to move somewhere with a lower cost of living than Vancouver. That’s where geo-arbitrage comes in. Essentially we can move to a small Canadian town or South East Asia and reduce our annual cost significantly. As a result, we may only need $40,000 in dividend income to cover our expenses.

Supplementing dividend income

In addition to geoarbitrage, there’s another way we can become financially independent earlier. We would need less than $60,000 in dividend income if we can supplement with other sources of income, like part-time jobs or side hustles.

In other words, we can consider a two stage approach.

  • Stage 1: Reduce our annual expenses by living at a lower cost of living area. Or using other sources of income and our dividend income to cover our living expenses.
  • Stage 2: Use our dividend income to fully cover our annual expenses.

Our Dividend Portfolio

As you can imagine, our dividend portfolio consists of a mix of individual dividend paying stocks and index ETFs is a key driver of our passive income stream. We do not invest in dividend ETFs for various reasons. You can see holdings and account breakdown of our dividend portfolio in the table below.

Please note: All content posted on this blog represents my personal opinions and views and should never be considered as professional advice. I am not a financial professional, and I can buy, sell, or hold any investment at any time.

The dividend stocks that we own fall into the following two categories:

  1. Dividend growers. These are companies that have increased dividend year after year. Some of the companies on the list have increased their dividends for over 20 years. The yearly dividend increase is significant because this is a way to keep up with inflation. As our dividend portfolio grows, we will be relying more and more on organic growth. This is where these dividend growers come in.
  2. High income stocks. These are companies that pay over 5% dividend yield. Most of them have slower dividend growth than dividend growers. The sower dividend growth is OK because of the initial higher yield. Most high income stocks are REITs and income trusts.

Our dividend portfolio consists of a mix of dividend growers and high income stocks so our dividend portfolio can generate dividends at a reasonable yield rate. Since we are dividend investors in Canada, we own a large percentage of Canadian dividend stocks. This is known as the “home town bias.” We are aiming to increase our international exposure by holding US dividend paying stocks and ex-Canada international ETFs like XAW.

As the value of our dividend portfolio gets bigger, it becomes increasingly more and more difficult to grow our dividend income via fresh capitals. Therefore, over the last few years, we have been paying more focus on dividend grower stocks. The ultimate goal here is that our dividends can continue to grow organically without any new cash injection.

For those positions that the dividend received is enough to purchase addition share(s), we enroll in synthetic DRIP to maximize the power of compound interest.

We are currently investing in 56 companies and 2 index ETFs.

(Updated August 2020)

Dividend FAQs

Here are common dividend investing FAQs for Canadian dividend investors. For a more comprehensive list, please check out the following two FAQ’s

Q1. What is the dollar value of your dividend portfolio?

This is a common question that I get from readers. We don’t disclose our dividend portfolio value and how many shares we own for each stock and index ETF for privacy reasons. I am not blogging anonymously anymore so I have to keep privacy in mind and determine what I share here.

Having said that, it shouldn’t take a rocket scientist to guess roughly how much our portfolio is. All you need is MATH!

Take 2018 for example, we received $18,734.29:

  • At 2% dividend yield that means our dividend portfolio value would be $936,714.50 ($18,734.29 divided by 0.02).
  • At 3% dividend yield that means our dividend portfolio value would be $623,476.33 ($18,734.29 divided by 0.03).
  • At 4% dividend yield that means our dividend portfolio value would be $468,375.25 ($18,734.29 divided by 0.04).
  • At 5% dividend yield that means our dividend portfolio value would be $374,685.80. ($18,734.29 divided by 0.05)

See how easy that is?

So, our dividend portfolio value is anywhere between $374,685.80 and $936,714.50 at the end of 2018. You can take a wild guess of the actual portfolio value.

Q2. Why are you a dividend investor? Why not invest in real estate? Doesn’t real estate provide a way better return on equity?

We do own our house so we are already investing in real estate. We haven’t considered rental properties for various reasons; we didn’t want to deal with tenants and potential tenant issues. Here in British Columbia, the rental laws are set up to protect tenants. Landlords don’t get too much protection when you have bad tenants (our friends recently had to deal with some bad tenants and it was painful). We like to have the peace of mind you get with dividend investing.

Q3. What’s the best way to analyze a dividend-paying stock?

Before doing a deep dive of a stock I am interested in, I would take a quick look at some of the key financial numbers like P/E ratio, payout ratio, PEG ratio, free cash flow, debt to book ratio, etc. These numbers typically give me a good idea of how the company is doing. The next step, which can take a bit more time, is to read the company’s annual and quarterly reports and determine the financial trend of the company. It is also interesting to read the CEO message and see if the narratives change over time.

Q4. Your dividend income amount seems to be roughly the same each month. Is this planned or by design?

This is a pure coincidence. Many stocks we own happen to pay out monthly dividends. The stocks that pay quarterly dividend stocks seem to spread out somewhat equally. Having said that, our weakest dividend income months are February, May, August, and November.

Q5. What are some dividend investing resources that you use?

Here are a few sites that I use for dividend investing:

  • DRIP Investing – an excellent website for DRIP investors. You can get an extended list of US and Canadian dividend champions and dividend all stars.
  • Morningstar – a great website for getting stock evaluation information.
  • http://longrundata.com/ – an excellent website for doing research on dividend growth history. I also like using its Dividend Reinvestment Calculator to reinforce the idea that DRIP is very powerful in the long run.

Q6. What are eligible dividends and non-eligible dividends?

The key difference between eligible dividends and non-eligible (or ordinary) dividends is how you get taxed if you receive dividends in a taxable account.

Essentially, eligible dividends get more favourable dividend tax credit while non-eligible dividends do not.

Why is that? Well, eligible dividends are paid from a corporation’s after-tax profits. This means the corporation has already paid corporate income tax on that income. To avoid “double tax,” the Canadian government allows you to get a 38% dividend gross-up rate which leads to a higher tax credit rate. The net result is that eligible dividends will have a lower marginal tax rate than the marginal tax rate for employment income and interests.

On the other hand, for non-eligible dividends, you only get a 15% gross-up rate. Because of the lower gross-up rate, you don’t get as much tax credits compared to eligible dividends.

If you want to look at the actual numbers and the different tax brackets, you can find more information below:

Q7. What do you do when you max out RRSP and TFSA?

If you can max out RRSP and TFSA each year and have leftover money to invest, that’s a very good problem to have!

If you have leftover money to invest after maxing out RRSP and TFSA, I assume you want to be as tax efficient and simple as possible. I will also assume that you have no debt. If you do have debt, whether it’s a mortgage or consumer debt, I think it makes a lot of sense to pay down these before you consider investing outside of RRSP and TFSA. If you have kids, another option is to contribute to their RESPs with the extra money

If you don’t have any debt and have already maxed out RESP, consider yourself very fortunate. In this case, the only place to invest the extra money is in a non-registered or taxable account.

Since taxable accounts are subject to income tax (hence for the name “taxable”, ha!), you want to be as tax efficient as possible. Since bonds, GICs, and international dividends are taxed at 100% of your marginal rate, this means it’s best to invest in Canadian equities inside of your taxable account.

Where does that leave you? One option is to invest in an index fund that tracks the Canadian market. Vanguard Canada All Cap Index ETF (VCN) and iShares Core S&P/TSX Capped Composite Index ETF (XIC) are good options due to their low fees.

The other option is to invest in individual Canadian stocks. You can either purchase a Canadian stock that doesn’t pay any dividends or a stock that pays dividends. If you go with the dividend paying stock route, make sure that you purchase a Canadian stock that pays eligible dividends for reasons stated above.

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64 thoughts on “Dividends – A Canadian Dividend Investor’s Dream”

  1. I see you have been investing for a while now and holding a very nice looking portfolio. I see quite a few similar names I am invested in, so glad to have a as a fellow shareholder to these great businesses.

    Keep up the good work.

    Reply
  2. It’s great to see other people out there holding the same companies. It goes to show that investing for the long term in quality companies just plain works.

    Look forward to your progress!

    Reply
  3. You have built a nice diversified dividend portfolio. Looks like you are well on you way. We both share the same interests for the outdoors. I am a avid forager, hiker and snowshoer. I have been building up my dividend portfolio and investments slowly over time. Thanks for sharing your portfolio and keep up the good work.

    Reply
  4. Tawcan,

    Your portfolio is really kicking. The sheer quantity is outstanding, I cannot wait until I am there one day. I like how you differentiate out some of the Canadian stocks, because as the ticker symbols seem to cross nationals differently.

    Nice to see a few stocks I have there as well.

    Keep it up,
    Dividend Gremlin

    Reply
  5. Impressive list! Are the US stocks in an RSP? If not, how do you justify paying the 15% withholding tax on dividends in a non-registered account? Is it worth it? Thanks.

    Reply
    • Hi Helen,

      All the US stocks in our portfolio are held in the RRSP. We do not want to pay the 15% withholding tax on dividends.

      Reply
    • If holding US stocks in a non-registered account, the 15% tax drag is still recoverable when filing your taxes. You want to avoid US stocks in a TFSA, RESP and RDSP, as they are not recoverable in these account types. Of course this in mind if your RRSP is already maxed out.

      Reply
      • You have it wrong; the US WHT is 30% if you are Canadian and owning US securities in a non registered account. You can recover 50% of it, ie., 15% when you file in your taxe report.

        Reply
  6. Hi: Do you use the Canadian Dividend All-Star List as an information source to select which DGI stocks to buy? Or, some other source? Some stocks appear to have a pretty ;low yield, such as Saputo, CNR, and even Apple, so I wonder why you chose these stocks. Thanks.

    Reply
    • Hi Hlen,

      We use Canadian Dividend All-Star list for DGI stocks selection but we also look at other sources like what we use on a daily basis. We also. Saputo, CNR, and Apple do have low yields but they have amazing dividend growth history. High yield isn’t everything. We aim to have a balance of high yield stocks and high dividend growth stocks in our portfolio. Hope this helps.

      Reply
  7. Great portfolio Tawcan. I like your strategy and I’ll most probably mimic it partly. You’re pretty heavy on current income / slow grower in your TFSA for tax efficiency. That’s my plan too. I’ll most probably hold a mix of banking stocks, high yield stocks and reits in my TFSA until I max it out and then I guess I’ll diversify it with lower yielders but higher growth stocks. It seems to be the best tax efficient and balanced strategy I’ve found yet for that account. The ARCP mess has slowed down my appetite for REITs though and I really wonder what will be the impact of higher mortgage rates in the future. I guess that time will tell and lets celebrate the fact that the government doubled our maximal authorized contribution to this account. It’s going to help us get tax free income from our stocks! 🙂
    best regards,

    Reply
  8. That’s a huge list of strong companies! For me, it would be too much, as I like to sell options on my holdings. For that strategy it is better to have few stocks, but many.

    I also think more European companies would be a great fit! Keep on investing! 🙂

    Reply
  9. Hi Tawcan, Very strong portfolio. I noticed the above share price are all upto date with current market value. I’ve an excel spreadsheet where i have list of stocks i own, my cost price, no of shares etc however i don’t have the column that shows up to date market value for each individual stocks. Is it possible to automatically reflect daily market value on the excel spreadsheet or I have to have an online blog or website in order to reflect daily price of each stocks? can you please give me some information

    Reply
  10. Hello Tawcan,

    out of curiosity, what’s your current average yield based on book value? Should be pretty high by now. Would be cool to see how that compares to the current yield based on market value. Since you have been investing for a while (and thus would have purchased at relatively low book values + had increasing dividends), we are curious to see how this has developed over time. Maybe an idea for a future post (hint hint!)?

    Reply
  11. I think your dividend portfolio is quite impressive for me.
    BTW, could I kindly ask the magic formula for “Div $” and “Yield %” in google spreadsheet?
    Thank you in advance.

    Charles

    Reply
  12. You mentioned that you buy Canadian Dividend paying stocks in TFSA and US stocks in RSP.
    But i also see many US listed companies in your portfolio above . . . e.g Apple.

    Reply
  13. How many stocks did you start with? What would be a decent amount to start with in each? When younhave more money to invest, how do you decide between adding to what you own already or buy something else? Do you rebalance based on sector weight? Under what circumstance do you consider selling a position? You might have answered these questions already but I just found your blog ….thanks!

    Reply
  14. Hi Bob,

    New reader here, just getting started on saving and investing towards FI. I was just wondering, which account do you hold your two index ETFs in?

    Thanks!

    Reply
  15. Hey Tawcan,

    Just two questions. 1, do you know if you can import google finance info into a regular excel file & 2, what site do you
    use to get your info regarding companies (eg dividend growth, etc..)

    Reply
  16. Curious. Do you have a fixed income component to your portfolio? If so, what percentage did you go with overall and what sorts of things is it invested in? The fixed income part is aggravating me!! Lousy yields and bonds losing value due to interest rate increases. I’m thinking of lowering my fixed income to maybe 25% or less and just develop a better dividend paying portfolio.

    Reply
  17. Just found out about your blog, nice! I have to wonder – why do you invest in high dividend yield stocks directly and not through an ETF such as VDY? Stock picking seems more laborious (requiring tracking) and riskier (due to less diversification) over the long run. Also, presumably basing your income on dividends is fine for a rising market, but I’d imagine that in a slump dividends would be slashed drastically, requiring another source of income or selling of assets to stay afloat.

    Reply
  18. Thank you ! I am a beginner and I feel overwhelmed by inviting. Your website really helped me out to understand things and how to keep it simple. keep up the good work and awesome site. It would be awesome if you have a section for beginners like a 101. I wish you all the luck in the world. Cheers 🙂

    Reply
  19. Hi Bob,

    Looking good! I have a quick question for you – how do you know how much dividend income you got from each of those stocks?
    Thanks,

    Reply
  20. Hi Bob,

    Great website and information! Quick question. In your dividend portfolio, when or at what price will you decide to buy and add to your portfolio?

    Many thanks!

    Jerry

    Reply
  21. Hello Bob,
    I see you have a relatively large portfolio, I also maintain a similar fairly large portfolio as well.
    Do you ever sell holdings or are you a buy and hold no matter what investor? For example I see you have HLF.to is this a recent purchase or have you held it and are underwater? YTD-34.25% , 1 year -43.97% , 3 year -60.54%
    If you do cull your herd of dividend growers, what is your criteria for selling? I am watching for any dividend cuts or significant changes to fundamentals.

    Reply
    • We are down with HLF.TO quite a bit but plan to continue to hold. Do we sell stuff here and there, mostly if we don’t have the conviction of the company future performance anymore.

      Reply
  22. It takes discipline to hold while down! I am holding some underwater positions but have cut a couple of big losers (HCG, CJR.B) because of dividend cuts and fundamental issues. I see in a responce above that a full position for you is 100 shares? Was that only meant in regards to drips? I am using a portfolio percentage as a guide for full positions and increase or decrease the amount based on market cap of the company. What are you using as a full position guide?

    Reply
    • Full position is 100 shares because back in the days before online discounted tradings, trades typically have to be in full lot (100 shares). Companies charge higher commissions for trading odd lots (not in multiples of 100 shares). It has nothing to do with DRIP.

      Reply
  23. Dear Bob! I have good warm feeling while reading your opinions, considerations. I am especially please to see Mrs. T and your photo.
    There are 2 more sites attracted my attention. It’s your peers- adwisers. What is your oppinion about ?
    -https://www.simplysafedividends.com/dividend-safety-scores/
    http://www.dividendmachine.com/
    Also, what do you think about following W. Buffet advice (see below) for the person with .5M cash willing to invest in minimum managed fund/(s)?
    WB: “It would probably make more sense for the small investor to achieve appropriate diversification and lower fees by accumulating shares of an ETF until his or her account was more sizeable.
    …90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors “

    Reply
    • Hi Ivan,

      Sorry I’m not familiar with the 2 sites you mentioned so I can’t comment.

      Generally speaking with these paying sites I don’t pay much attention to them. It’s fine they provide stock picking recommendations and all, but unless the authors have a sizable dividend portfolio and actually are playing with their hard-earn money, it’s really hard for me to follow their advice. Hope that makes sense. It’s like why would I pay and listen to someone that hardly have any money in the game? You’re just playing with paper money. 🙂

      Regarding your Buffet question… that’s exactly why we do a hybrid approach – investing in both index ETFs and individual dividend paying stocks.

      Reply
  24. Hi Bob,

    Do you recommend owning preferred shares ETFs or stocks over traditional stocks or bonds? They seem to pay a significantly higher dividend though I guess their upside can be limited? I just learnt about them from the blog whose book you recommend in your last post and it sparked my interest. Any suggestions you have are welcome.

    Reply
    • Hi Ivy,

      Preferred shares is a good way to boost dividend income for sure. Just make sure you understand the potential shortcomings with preferred shares.

      Reply
  25. HI Tawcan, can you let me know what’s your average dividend % you are getting from all your holdings. Also which stock broker do you use for trading?

    Reply
  26. Hi tawcan, I love your forum. I currently own about 10 stocks in your portfolio but looking to add some more. What would be your top 3 recommendstions at the moment in your portfolio for a long term hold.
    Thanks!

    Reply
  27. Hi Bob,

    I’m also a fellow Taiwanese-Canadian living in Vancouver, I came across your blog by accident while I was Googling about Dividends. I’ve learned lots from your blog and felt extremely inspired that my dividends projected for this year is about the same as what you had received in 2011. Your blog inspired me to look at how I can achieve FI in 10-15 years when turn I am 45. Thank you so much for sharing your journey! 謝謝!

    -Rybo

    Reply
  28. Hey Bob,

    Quick question, notice you have no bond component in your portfolio, why ? Mainly stocks with global diversification only. Also why did you buy VCN when you will have overlapped the same stocks you already own ? Just curious.

    Regards and thank you for your website
    Anhvic

    Reply

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