Hello all and welcome back for another portfolio update!
Today we’re looking at our dividend portfolios and how they’ve progressed since our last update a couple of months ago!
Dividends are our absolute favourite form of passive income as they are truly very, very passive. Once we’ve purchased the shares there’s nothing left for us to do but sit back and wait.
For those new readers here today our goal is to (for the time being) get to about a $50,000 yearly income through dividend stocks but this is open to change for instance we’ve had our first child this year so this may affect our planning down the line and we’re also still deciding things like where to live when we retire or look for end of career type jobs.
Cost of living is obviously a large factor in how much passive income we’ll need to retire.
As I’ve just mentioned we’ve had our first child this year, so our cash position is staying a healthy size. We’re hovering somewhere around the $50,000 mark in cold cash that is staying on the sidelines. This mark is going to keep accumulating slowly over the course of the winter as we are thinking of buying a plot of land somewhere next summer but that’s up in the air – the flexibility will be there regardless of what we decide.
Let’s get into our account by account breakdown of our holdings:
His TFSA
The first account we’ll look at is the oldest of all our investment accounts, my TFSA:
As you can see there’s a strong bias towards Canada in this account – in fact its 100% Canadian dividend payers.
The second thing to note is that this account holds a lot of financial stocks, although that is a fairly wide spread sector in the market banks, life/house insurances, mortgage insurances and the like.. it’s relatively diversified for being under one blanket.
The next largest would be our utilities and energy as we absolutely love Canadian Utilities, Enbridge and Fortis and also still believe enough in oil rebounding that we keep our positions in Inter Pipeline and Suncor.
The rest of the account is just a little diversification but we’ll get more into that below.
His RRSP
And in my RRSP you’ll see it’s mainly US holdings. This is for taxation purposes so we don’t lose out on dividends received due to withholding tax.
We’re finally building up a little bit of a tech position which has been long overdue and you’ll notice that we’ve even got Facebook in here even though it isn’t a dividend payer… why you might ask? This is because we feel like Facebook is getting to be a mature company in it’s growth cycle and it’s ridiculously strong balance sheet along with stable income mean that we feel it’s likely to begin paying a dividend within 2 years time.
That is just my belief based on what I see with the company but the good news is that Facebook is a company we don’t mind holding regardless so even if in 2+ years time they aren’t paying a dividend it’s a company we can hold longer term and wait on or transfer into dividend payers if it makes it to our early retirement without paying one.
His non-registered
The non-registered accounts are going to be mainly for canadian eligible dividends – again this is because of withholding taxes and the preferable taxation you receive when receiving these dividends as opposed to other sources of income.
Over time this account may also own some US stocks but again the main goal of it for tax purposes will be canadian.
Her TFSA/RRSP/Non-registered
Because there aren’t as many holdings in her accounts we’ll put them all in one shot.
The top account is TFSA, the middle the RRSP and the bottom is her non-registered, you’ll see a lot of similarities in what we hold in her accounts to what are in my own in terms of canadian vs. US.
Now for the totals:
So there you see that our dividend portfolio is now roughly $171k with an annual income of $8,677.36 and an average yield of just over 5%
That 5% is a number we’ll strive to hover around but it will drop a little bit as we continue to round out our portfolio to our ideal diversification.
Speaking of diversification – let’s have a look at that by sector:
So there’s our income by sector on a yearly projection as well as the total current value and % of our portfolio each sector makes up.
The target % is a number that has continued to evolve over time but I’m now closing in on numbers that I feel comfortable with just based off of the stocks we already hold, want to hold and how large of positions we feel comfortable with holding.
This will be a slow progress to level out our target allocations as we don’t necessarily want to sell many holdings we’re mainly just looking to deploy any new capital into our lagging sectors and let it all balance itself out over the next year or two.
An advantage to doing it this way (we feel at least) is the added benefit of naturally adding money into sectors that are going through down times and just holding when you have a sector that is potentially overachieving or getting over heated.
That about wraps up our portfolio recap for the day.
Questions or comments? Leave them for us below or over on our
Instagram @FindependenceCanada and we’ll be sure to respond.
Also, if we’re missing any golden opportunities in the markets then let us know! we’re always looking for new stocks to investigate.
Thanks for stopping by,
FIC.
Disclaimer: This is not investment or personal finance advice and we can’t guarantee any gains or losses from the information we give here. We are purely documenting our journey and doing this for our own enjoyment and your entertainment. Please seek professional advice before investing in the stock market.