I really enjoy interacting with readers, whether it be via comments on this blog, emails, Twitter, or Facebook. I always appreciate when people take their time to write. If you are one of the people who commented/emailed/tweeted/Facebooked with me before, from the bottom of my heart, thank you! I hope one of these days we can connect in person and have a face-to-face personal chat. I really enjoy talking & connecting with like-minded people.

What I found interesting though, is the fact that in the last few months, I have been getting increasingly more and more emails asking me about our dividend income. There seemed to be more dividend-related emails whenever I published a monthly dividend income update.

Some of these emails have statements or questions like…

“Oh you guys are getting so much dividend income, I am so jealous.”

“I am just starting out; how do I get to the same dividend income level as you for as quickly as I can?”

“I am only getting single digits of dividend income per month, so looking forward to getting four-digit dividend income one day.”

“Your year-over-year growth has been impressive, what is your secret?”


Learning from your successes and failures

I have been investing in dividend growth stocks since 2007. To be honest, when I purchase my first dividend stock, I really had no idea what I was doing. I was banking with ING and thought owning ING stock would make sense. Little did I know that the ING shares I bought were for the insurance portion of the business, not banking. Later the insurance business was separated and became Intact Financial. Just before the financial crisis, I purchased Manulife thinking that the dividend was nice. Then Manulife slashed its dividend payout because it was not sustainable. So during the financial crisis, I saw the share price of both Intact Financial and Manulife collapse. At one point, I was looking at over 50% losses on paper.

However, when I calculated the numbers, it turned out my cost on yield was better than selling the stocks, taking the loss, and putting the money in GIC (Canadian version of CD) to earn measly interests.

So I held on the shares rather than selling them. I figured that the share price would recover one day.

It also helped that I had no need of the money invested in the next 5 years. Somehow, unknowingly, I had answered the 3 key questions to ask before pulling the buy trigger.

It was a wise decision to hold onto both Intact Financial and Manulife for almost 10 years. That was one of the good moves I made since I started investing in dividend stocks in 2007.

But I have also made my fair some stupid mistakes too. Like doing momentum day trades and taking a 15% loss in less than 10 minutes. Or not following through with my instinct.

In the short run, the market is a voting machine (i.e. irrational), but in the long run, it is a weighing machine.

As investors, we all need to remember this great quote.

Do your homework before purchasing an investment. Think about all the possibilities and really take apart your investment thesis, both reasons why you should go forward with the investment, and reasons against with the investment purchase.

We also need to remember not to boast our investment successes and not to dwell too much on our investment failures. Some of these successes and failures are purely due to luck. We have no control of the market. Therefore, we need to learn from these successes and failures and move on.


We all have a beginning

Not too long ago I looked at other bloggers’ dividend income updates and thought, wow that’s impressive. I imagined what it would be like to receive $100, $500, $1,000, or $5,000 per month in dividend income. To me, receiving that much money each month for doing absolutely at all was absolutely ludicrous. I was making a few dollars each month from dividends, and receiving that large amount of dividend income each month just seemed like a dream to me. Deep inside, I was so determined to pass some of these bloggers in terms of dividend income. I wanted to receive a large sum of dividend income so it can cover our expenses and we can call ourselves financially independent.

I wanted to be there with these bloggers and have a large sum of dividend income.

I wanted to expedite our financial independence journey so we can be FI as quickly as we can.


What I failed to realize is that many of these dividend growth investors that are ahead of me have been investing in stocks for much longer than I have. Some of them have been investing in stocks for decades. They have been slowly building their portfolio.

We all have a beginning. We all start somewhere.

Having been on my financial independence for a number of years, I realized that it takes years to build a dividend portfolio that would generate enough dividend income to cover our expenses. I also realized that a sizable dividend portfolio isn’t built in a short period of time. Rome wasn’t built in a day, neither should your dividend portfolio, or your passive income streams.

If you want to build your portfolio up quickly, so you can receive a large amount of dividend income, you might end up taking more risk.

You might end up purchasing higher yield dividend stocks that do not have a healthy or a sustainable payout ratio. You might end up purchasing stocks of shady businesses.

When it comes to building up your dividend income (or passive income in general), let time be your ally. Don’t’ work against it.

It is unfair to compare our dividend income with someone that just started a few months ago. And it is unfair to compare our dividend income with someone that has started decades before us.

We are all on our own personal journey, there is no need to compare. Rather than comparing, what we can do is to help each other along the journey, encourage each other, and learn from each other.


Expenses, Savings Rate, & Net Worth – unfair comparisons

I will be the first one to admit that I enjoy reading these annual expense reports and comparing our numbers with others. To me, it is interesting looking at other people’s annual expenses. But I realized I need to take these numbers with a grain of salt. There are so many different variables that can affect annual expenses – where people live, number of people in the household, what you eat, how you shop and buy, and people also value money differently. Someone might value home-made meals higher than eating out, while someone else might value dining out with friends and family over home-cooked meals.

Savings rate and net worth, on the other hand, are funny numbers to compare. People have different jobs, different income, different savings rate, and different types of investment. It simply isn’t fair to compare a family with dual income, no kids (DINK) to a family with single income, lots of kids (SILK). The income levels, the expenditures, and the savings rate are certainly going to be different between the two families. If you are a SILK family earning $50,000 per year and saving $10,000 a year (20% savings rate), is it fair to say that you are not as successful at saving when compared to a DINK family earning $200,000 per year and saving $100,000 per year (50% savings rate)? It is simply not fair to compare the two families. They have different annual spending and most likely will have different net worth.

The fact is, it probably will take the single income, lots of kids family longer to achieve financial independence compared to the dual income, no kids family.

That’s how math works.

Just because one family achieves FI faster, it doesn’t mean one family is more successful than the other family.

Success in life isn’t measured like that.

When I started reading personal finance and FIRE blogs many years ago (before I started blogging), I used to marvel at these bloggers that were already retired at a young age, or reached financial independence. I would daydream what it would be like if I were retired already and had the freedom to do what I wanted to do all the time, rather than working at my 9-5 job on weekdays. I wanted to be FIRE’d already so I could enjoy the “good” life.

But then I realized, it is not about how fast you achieve FI.

It is not about what age you achieved FI or retired from your 9-5 job.

It is not about how much money you have in the bank.

It is not about what kind of fancy car you drive.

It is not about what kind of vacation you are going on.

We can all be successful in our own ways.

And it is unfair to compare annual expenses, savings rate, and net worth. These are very personal numbers and will vary between each individual.

Rather than comparing your numbers with another person’s, compare your own progress each year. Are you spending about the same as previous years? Are you increasing your savings rate? Are you increasing your net worth? Is your net worth growing at an increasing pace each year?

We all need to stop comparing yours to someone who is way ahead of you, or someone that just started.

Start holding yourself to a higher standard. Challenge yourself on a daily basis. Become a better version of yourself each day.


Written by Tawcan
Hi I’m Bob from Vancouver Canada, I am working toward joyful life and financial independence through frugal living, dividend investing, passive income generation, life balance, and self-improvement. This blog is my way to chronicle my journey and share my stories and thoughts along the way. Stay in touch on Facebook and Twitter. Or sign up via Newsletter