At first, when I started investing in the stock market a few years ago, it was more about trying it out and seeing if it works for me. I was more of a trader and didn’t pay too much attention to dividend income.
Admittedly, I wasn’t happy with the results. At times, I earned some profits and at times I barely made even. There were no predictable income streams and it’s a full time job for others monitoring the stock market on a daily basis.
TURNING POINT: Becoming a full time dividend investor
I continue to educate myself on matters regarding financial literacy. In addition, I read books about dividend investing, watched Youtube videos, and followed the strategy from the greatest investor of all time Warren Buffett. Finally, I visited personal finance websites, investing forums, and joined their discussion.
In short, I’ve changed my approach and become a full time dividend investor. Above all, as an investor, I continue to evolve and improve my strategy as I go along.
CONSISTENT AND DISCIPLINE LONG-TERM INVESTING!
Generally speaking, I’ve learned to be patient, disciplined, and consistent with my investing strategy which leads to steady return of our investments.
Since 2016, I’ve invested much of my time in studying, researching, and picking dividend growth stocks that I will buy and hold.
Our goal is to live off with our growing passive income through dividends without harvesting the capital.
We both have maxed out our Tax Free Savings Account (TFSA) for 2020 which is $69,500 each plus any gains earned over the years.
Our TFSA Portfolio only consists of Canadian equities. Beginning of this year we have added new securities to our holdings.
We keep a watchlist of potential companies that we will partner in the future that meet our criteria.
If you follow my previous post, I am personally not an advocate of Registered Retirement Savings Plan (RRSP). We prefer to hold non-registered accounts after maxing out our TFSA contribution room.
Below is our TFSA monthly dividend income for this year:
(Updated: December 4, 2020)
The effects of COVID 19 pandemic and oil price war early this year led to the temporary closure of many businesses and for some, a permanent one due to the threat of the virus. For all those reasons, this has led to massive job losses around the world and significant losses in companies earnings. No one has gotten off the hook, even the greatest dividend investor of all time Warren Buffett.
Therefore, in an effort to keep many businesses afloat, some of these companies have decided to reduce or cut their dividends.
As a consequence, you may have noticed a drop in our monthly dividend income in the month of February and also reflected in the month of May. It is disappointing to see that our dividends in our TFSA have dropped significantly again for the month of August. This is partly due to our conscious decision to sell some shares of one of my high yielding dividend stocks which I have too much weight on over 20%.
September has now shown slow recovery in our TFSA dividend income. Subsequently, we are now expecting a steady increase in the next few months provided these companies continue to pay dividends to their shareholders.
November has been a quiet month for many dividend investors in contrast to October as not many quarterly paying dividends fall for this month.
As a dividend investor, I am disheartened to see that our TFSA dividend income was down compared to the previous year but this has been an exceptionally difficult time and no one has been spared coupled with our mistakes of exposure to only a few sectors.
For all those reasons, as a dividend income investor we decided to part ways with some of the companies that have reduced and cut dividends. On a similar note, we started positions in companies that we considered essentials during this crisis such as utilities, telecom, technology, and consumer staples.
Diversification helps to mitigate any losses to any dividend investors. During market downturn or recession, there are companies that will continue to thrive hence not severely impacted. In fact, some of these companies continue to increase their dividend payout during these times. Here is the link to our updated TFSA Dividend Portfolio.
As countries and governments started to ease restrictions and businesses reopening with the new normal conditions, our economy will hopefully also start to improve and recover. Therefore, it is crucial for dividend investors to partner solid dividend growth companies.
Similarly, we are confident that with the new additions to our TFSA dividend portfolio, it will continue to provide us with increasing dividend income in the coming months and years.
Note: However, past performance does not guarantee future results. Therefore, dividend income may or may not change for the coming months.
2020 TFSA Dividend Income to date: $8,413.24
Jan – $1,053.96
Feb – $840.88
Mar – $951.36
Apr – $982.52
May – $517.44
Jun – $744.97
Jul – $839.48
Aug – $486.06
Sep – $644.01
Oct – $865.02
Nov – $487.54
My Final Thoughts
Our goal at the beginning of each year is to maximize our TFSA contribution. Once we achieved that, we continued to invest in US and Canadian dividend stocks in non-registered accounts.
We have reached $10,019.62 of passive income through dividends in 2019 in our TFSA accounts alone. A great milestone to end the decade for us.
For the purpose of this blog post, I will update our TFSA dividend income every month and recently started a live Canadian non-registered DGI portfolio. Hopefully you will continue to join and follow our journey towards financial independence.