June 2015 Dividend Income Update

Here we are in the 2nd quarter over, and have the year is through already! Time flies.  In my last update (March 2015) I had just over $5500 of annual dividend income.  Going through the changes to my dividend portfolio took a lot of concentration because of all the changes I made.

This quarter I have close to $5800 in annual dividend income.  I would like to see if I can get $6000 in annual dividend income by the end of the year, which would give me a clean $500 a month in dividend income.

I also managed to keep the dividend payout to 4.50% (which is very close to the 4.51% last update) which is quite interesting.

If I had a million dollars in my dividend/ investing machine portfolio with a 4.5% annual dividend return, I would have $45000 in relatively unscathed-by-taxes income which would be a dream! Retirement here I come, LOL.  I’ve got quite a ways to go for that, though!

Changes to the Dividend Portfolio

There were quite a few changes to the dividend portfolio, which included dividend increases, addition of dividend paying stocks, and rebalancing/ adding more shares.

The two that had notable dividend increases includes Sunlife (SLF.TO) which increased their dividend from $0.36 a share every quarter to $0.38 a share every quarter.  This represents over a 5% increase in the dividend.  I have 105 shares of Sunlife, and have owned them for a long time (since 2008 I believe).

The other stock that increased its dividend is Bank of Montreal (BMO.TO).  BMO increased its dividend from $0.78 a share every quarter to $0.80 a share every quarter.  This represents a 2.5% increase.  I have 100 shares in Bank of Montreal.

Another major change was the decrease in the CPD shares (triggered a stop loss) and buying of ZPR (also preferred shares) in addition to re-balancing the non-registered portfolio and buying more VUS, VEF, ZDV, and CLF.

I added SNC Lavalin (SNC.TO) a Canadian engineering company that builds all over the world that has recently been priced very low because of recent issues and allegations of corruption.  It pays a little over a 2% dividend and had a recent increase this year.  I bought 25 shares and then 25 more shares.  I also added National Bank of Canada (NA.TO) and bought 50 shares.  It pays about a 4% annual dividend.  I also re-bought Ensign Energy (ESI.TO), I just couldn’t stay away haha.  It triggered a stop loss and I bought it at a lower price.  The dividend for Ensign Energy is around 4.8%.

Finally I bought 50 more shares of REI.UN (RIOCAN REIT).  I remember walking near a Canadian Tire in Vancouver and seeing the RIOCAN sign and fancy garbage can.  At first I was annoyed that this particular Canadian Tire charges its customers parking (and heavily enforces the parking) on the rooftop whereas all the other Canadian Tires have complimentary parking.  Then I realized that it was benefiting me because I have shares in REI.UN.  Nonetheless I didn’t end up parking on the roof, haha.

If you want to make your own spreadsheet, check out my snazzy ‘step by step guide on how to make a dividend income spreadsheet‘. Continue Reading

Book Review: The Single Best Investment: Creating Wealth and Dividend Growth by Lowell Miller

This is the third of the four books that I wanted to read to complete my 2015 personal finance goals.  I actually didn’t actively seek this book but I found it on a Red Flag Deals forum for free and downloaded it onto my Kobo.  Initially when I downloaded it I saw that the Moneysense John Chevreau talked about this book as being a must read (on a recommendation by Wes Moss, a 38 year old retirement guru) on 5 Money Secrets to a Happy Retirement.

The Single Best Investment: Creating Wealth and Dividend Growth was written in 2006 by Lowell Miller, the President of Miller/Howard investments.  He manages over $7 billion in his company’s firm.  He is a top-rated portfolio manager and an award-winning author.

The Single Best Investment in a Nutshell

Lowell Miller writes that people should not be investing in equities, and that you don’t need more than 30 different equities in a portfolio of stocks to create wealth and investment growth.   He also advocates for those 30 stocks to be of equal weight with each other.  The major kicker for me was that he advocates for not investing in bonds and investing only in high quality dividend paying companies instead.

Lowell Miller explains the power and magic of compounding (which is a beautiful thing, might I add) and how anyone can create investment growth.  He tells us not to underestimate the power of reinvested dividends and of dividend payments, as these will continue to grow with inflation and with time.  Shareholders will continue to benefit from increased dividend payments.

He also spends a few chapters talking about how there is a lot of noise in our society now where people talk about their latest investments and why you should invest in company XYZ too.  He explains that staples such as utilities, REITs, and banks are safe bets for investment (e.g. avoid the Twitter or Facebook IPO if you can).

Single Best Investment Pros

The Single Best InvestmentWhat I really liked about the book was that at the end of every chapter, there is a key point summary and take-home message from the chapter.  For example, in a few of the chapters, he lists a few things to keep in mind when you are researching investments to add to your portfolio such as:

  • Annual earnings growth should be consistent
  • The closer the share price is to book value the better
  • Cash flow should be 3:1 of interest
  • Debt to equity capitalization ratio should not be more than 50%
  • When reviewing annual reports and companies, look for integrity and honesty in management
  • Watch the dividends- if they are not paying out dividends or are cutting dividends, or are not increasing dividends, beware

Another thing that I liked was his ability to explain and get the reader excited about investing and creating the income-producing retirement machine.  I also liked how he validated that we hear a lot of NOISE (you know, your coworker telling you the latest hot stock tip and how he is has made over 40% return on his investment) and we need to tune that noise out or else we will be at risk for following the crowds and reacting to the investments instead of plodding along and carrying on. Continue Reading

Globe and Mail Unlimited Offer for Young and Thrifty Readers

GU_YoungNThrifty_300x250_c*This message brought to you by our good friends over at Globe Unlimited, but written by your friendly neighborhood personal finance geek – Kyle Prevost.

If anyone can appreciate the fact that many of us have switched from reading more traditional forms of print media to informal ones it’s a guy that co-owns a blog!  That being said, I should give The Globe and Mail some props (as opposed to just a hyperlink) because I often use their articles as source material for my writing or to supplement my views and opinions.

The G & M is home to two of my favorite personal finance columnists in Preet Banerjee and Rob Carrick, as well as one of my favourite personal finance authors in Andrew Hallam (of Millionaire Teacher fame).  Carrick releases a new informative article every 25 minutes or so, has a pretty decent Facebook presence (relative to other big shot columnists at least), and his morning roundups highlight some great stuff from all over the web (including yours truly once in a while).  Banerjee is one of the smartest, wittiest writers in any field that I’m aware of.  He also has some pretty neat whiteboard videos that help break down the Canadian financial scene in a way that you won’t find in many other places.  I’m a fan of Hallam for obvious reasons, (Canadian teacher becomes millionaire through index investing) and his columns are full of great, actionable ways to implement passive investing strategies in a Canadian context.

If passive investing isn’t your thing (it probably should be) The Globe and Mail has you covered there too.  Their Strategy Lab feature embraces the idea of juxtaposing four investing styles that can be summed up as growth vs value vs indexing (yay!) vs dividends.  Each style has a guru that informs readers about the underlying fundamentals of their respective investing strategies, as well as sharing their model portfolios, and providing relative comparisons from a Canadian POV.  While I clearly lean heavily towards Hallam and the passive investing portfolio, the other authors are equally well qualified and I’ve become familiar with many new concepts as a result of the series.GU_YandT

No Such Thing as a Free Lunch

While I’m a fan of getting something for free, as a writer I understand that in order to consistently do original research and have it presented by full-time professional authors (I’ve been told not every writer is doing it as a side gig while teaching full time), the money has to come from somewhere.  To be brutally honest, a lot of formerly decent publications are pretty lame these days, and unless we want to see our best Canadian dailies go down that spiral, ponying up a few bucks every month is a relatively modest consideration for me.

Globe Unlimited often runs promotions where they offer a month for $0.99 and then it jumps to full price forever after.  Because they figure Y & T readers are pretty engaged online financial types, they’re offering a limited time offer of four months at half price ($12).  That’s a $96 value for $48!  I’m not going to sit here and tell you that $24 a month isn’t an appreciable amount of money for a lot of folks.  Instead, I’m going to ask you to simply try the product for a few months and see if it works for you.  If you can pick up a few actionable tips on the best new features and prices at Canada’s discount brokerages for example, you’ll likely get your money’s worth right there.  If you want to stay on top of the investing world, I know of no better place. Continue Reading

Pin It on Pinterest