Welcome to my August 2015 dividend income report. We managed to do so much this month toward getting our finances in order. As I said earlier, my goal this year is to generate at least $7,500 in passive dividend income. That income will be an important part of my early retirement plan. These reports help me track the growth of that income and also serve a wider purpose: to show that dividend growth investing is a solid long term investing strategy.
Paying Down Debt
Saving and investing our money is only one part of the wealth-building equation. The other, of course, is paying off our debts. I’m happy to report that August is the month that we’re finally seeing our family finances turn around! For much of the year we’ve been digging ourselves into debt to get some home renos done. These renovations have been a huge drag on our finances and on our net worth statements because I haven’t accounted for whatever value that they have added to our home. In terms of our debt we managed to payoff a little over 8k on the HELOC and another 1K on our mortgage.
One of the bad things about carrying debt is that it causing you to miss out on some really great investing opportunities. I’m referring here to the big stock market correction at the end of August. Sadly, because I was focused on paying down our HELOC, I didn’t really get a chance buy any stocks as the market was crashing. I can’t wait until we finally get this HELOC paid off. As it stands now our goal is to have it paid off by December.
The Markets are Falling!
The stock markets went nuts this month and offered some excellent buying opportunities for the long term investor. I wrote a couple of posts about how to profit when the stock market crashes and the virtues of being a long term investor. Sadly I wasn’t able to go all in because I have a lot of debt to payoff first.
Monthly Investing Activity
I haven’t invested as much as I would have liked this month, but I managed to buy about $500 worth of Scotiabank (BNS) and made my regular, automatic contributions of $100 towards Emera (EMA) and Bank of Montreal (BMO). I also managed to put another $1,100 into the RESP accounts. The RESP money is invested in low-cost TD e-series index funds.
In spite of not having a lot of money to invest this month, I was very happy to see that 3 of my companies raised their quarterly dividend. Emera increased its by 19%, CIBC (CM) increased by 2.75% and BNS increased by 2.9%. This is one of the big benefits of being a long term dividend investor. Year after year my companies raise their dividend payout which effectively gives me a raise for doing absolutely nothing at all. At my work, I’m lucky to get 2% a year, but as an investor I get at least that amount every second quarter!
Monthly Passive Dividend Income
August has been a decent month for dividend income. In fact this month’s dividend income has increased by 23% since my May report. As I’ve said before, the markets can go up or down but the only real trend that I focus on is the growth of my dividend income. So I’m glad to see that it is growing in one of my weaker months as far as dividend income is concerned. Here are the numbers:
Emera (EMA) – $15.16
Bank of Montreal (BMO) – $47.10
Citigroup (C) – $1.31
Procter and Gamble (PG) – $85.75
Potash Corp of Saskatchewan (POT) – $47.83
RioCan Real Estate Investment Trust (REI) – $4.05
Mutual Funds and ETFs
iShares S&P/TSX Canadian Preferred Share Index ETF (CPD) – $58.58
iShares S&P/TSX Capped REIT Index ETF (XRE) – $36.99
Canadian Short-Term Corporate Bond Index ETF (VSC) – $17.27
Canadian Short-Term Bond Index ETF (VSB) – $13.60
Total = $327.64
Photo Credit: Photo by thanunkorn / Freedigitalphotos.net