***Note From Justin***

I somehow forgot to post the September Net Worth Article last month. You can find it here!

***

I was “forced” to update my Dividend Spreadsheet and I almost forgot how I created my first spreadsheet in the first place.  I guess the lesson here is that I need to either buy lots of dividend producing shares, make sure the companies increase the dividends, or keep updated on my DRIPping dividends.

To my excitement, I found out that the DRIP actually went through (I think it’s about 6 months later) but I guess it was dripping so slowly I didn’t even realize it.  I have one extra share in Husky (HSE) and Sunlife (SLF) now!

The thing I love about dividend investing is that it is truly passive income.  I know that the debate is hot out there on which one is preferable, online income (e.g. blogging to make money) or passive income.  Both are rewarding, but seeing things slowly accumulate (e.g. dripping shares) is somehow very satisfying for me.

I’m not sure if this is the case for anyone else.

Another good thing is that I found out I have more TFSA contribution room that I thought I did!  This is because I made made some money selling all my income trusts and took the majority out tax free a few years back.  When I contribute my TFSA, I usually only put the annual amount, and didn’t want to risk getting the CRA over contribution penalty.

Anyways, turns out I was too cautious.  So I put in an extra $2000 and bought more BMO shares especially since they are raising their dividends in November.  Obviously something is wrong with me, I get more joy out of buying investments than I do shoes, clothes, jewellery, or other girly things.

Finally, even better news is that I realized I forgot to put in my Bell (BCE) shares in my spreadsheet.  I have no idea how I missed it since I put in my Telus (TU) shares and they were originally in the same margin account.  Anyways, now I have almost $1500 of 100% pure passive income on an annual basis.

Hardcore dividend investors out there- why do you pick individual dividend stocks over something like ETFs?  (Sorry TM, I know you’re a fan of ETFs).

Article comments

17 comments

Well done Young! Keep it up 🙂

Why individual dividend stocks over ETFs? Control over the income is one reason. ETFs are similar to Mutual Funds in that everything is pooled and you therefore get an average. It limits your risk and exposure but you give up control over the income you want.

Teacher Man says:

You still get dividend income from ETFs?

Leigh says:

Yup! ETFs have dividend distributions as well: http://vixmoney.com/xhb-vs-xbb

You can even buy dividend ETFs! Dividend payouts from large index ETFs/funds tend to not be as high per share of individual dividend stocks because there are many stocks in the index that don’t pay dividends, but you do still get some dividend income.

Young says:

@Leigh & @TM- Yup, I have dividend ETFs! 🙂

Young says:

@PIE- Thanks PIE! I think because I’m a gambler at heart? 🙂 I just find that my ETFs haven’t “moved” much (neither up nor down) so it doesn’t give me the same excitement.

John says:

Congrats on the passive income! I’ve been trying to max my tfsa with dividend stocks also this year. Do you buy and sell stocks for additional income? One of my favourites is mfc, buy under 11 and sell when it goes up, while paying a good yield while you own it.

Young says:

@John- Thanks John! It’s so slow I wish it were faster but better than nothing I guess. I don’t buy and sell too actively in my TFSA, though it did work out well for me in 2010 (?) when I sold the income trusts in the TFSA. This gave me about $5K extra in TFSA room… which I just discovered this month lol. Have you been using that strategy yourself? I used to own MFC but then sold it because of their dividend cut. Then I bought SLF who is probably going to do the same thing sooner or later lol.

Joe says:

That’s awesome, congrats on the milestone!! 🙂

Young says:

@Joe- Thanks Joe! I’m waiting for a sarcastic response.. where is it!? 😉

Yay for DRIPping indeed!

Well done with the income…I’ll continue to watch your progress! 🙂

Young says:

@MOA- I’ve still got a long way to go! I’ll continue to watch your progress too! 🙂 I love your dividend reports!

Liquid says:

Yay for DRIPping. I do it whenever I can. One benefit I see to buying individual stocks over ETFs is you don’t have to pay for management. 0.2% may not sound like a big MER, but if you have $100K invested then that’s $200 every year you have to pay. I can make 20 unique trades with that kind of money to make myself a diversified portfolio similar to an index ETF, and each transaction is a one time fee, not $200 ongoing every year for the ETF (^_-). I got a TFSA surprise too. Have extra contribution room I didn’t know about because I was really careful. But it’s better to be safe than sorry :0)

Young says:

@Liquid- Yes you’re right- that’s what I was thinking too- better safe than sorry since they don’t tell you about it/ warn you. What are you planning to buy with your extra TFSA contribution room? 🙂 I only have HSE and SLF on DRIP right now, and i’m amazed at how fast the shares are accumulating already.. I think I’ve already got two extra shares already for HSE and its been only two months I think. Unless Questrade just took really long to actually show the Drip… who knows..!

Liquid says:

Maybe some more POT, TCK.B, or CGX. Not sure yet. Planning to buy some real estate pretty soon so that will probably tie up a lot of my capital for the near future.

Young says:

@Liquid- Holy jeebus..! I had no idea that Cineplex had such a high dividend yield! 4.67% yield is pretty good..! Cool- saw you’re buying land in saskatchewan? If only we all had tons of capital eh?

Leigh says:

$1500/year? You’re doing pretty awesome with that dividend portfolio, Young! Glad to hear about the unused TFSA room – that’s like Christmas for a PF nerd 😀

Young says:

@Leigh- Awe thanks Leigh! It’s peanuts compared to some heavy weights with $6000 to $30,000 annual dividends.. one day one day! I know, we are such PF nerds it’s kind of sad that things like this gets us excited!