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Dividend Income Milestone I

Today when I increased my common equity position in Sunlife Financial (SLF) in my Dividend Growth Portfolio (DivG) I achieved a targeted milestone for dividend income in that portfolio. 

Late 2008 and early 2009 were full of opportunity for investors with the dedication, discipline and focus for long-term investing.  I was fortunate enough to successfully initiate a leveraged dividend strategy in my Canadian portfolio as well as make some very disciplined purchases of depressed investments when the market was full of panic and fear.

Earlier this year I had set a milestone for the yearly generated dividend income in my DivG portfolio at $8,000/yr with the intent to achieve that level by the end of 2010.  Using a conservative amount of leverage, key purchases and a balanced approach to the management of my portfolio I’m happy to say that today was the first day that I broke through $8,000 in yearly dividends for my portfolio income even with cuts to the dividends of some key companies I hold (Manulife, Russel Metals & Husky Energy).  The exact amount, for those interested, on an annualized basis at current dividend levels is $8,015.03 spread amongst 31 investments (common equity, income trusts & preferred shares).

The goal of this portfolio is to eventually achieve financial independence where the passive income generated by dividends supplements my working income to achieve greater financial flexibility.  Ideally the increase in dividends will outpace the rate of annual inflation preserving my purchasing power as a consumer.

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{ 8 comments… add one }
  • Think Dividends November 13, 2009, 2:43 pm

    Congrats Brad. Have you set a new milestone for 2010?

  • Susan November 13, 2009, 3:02 pm

    Congratulations! You have a goal and are very focussed working towards it…cuts through the noise, for sure. I am very sure you will acheive the ultimate goal of this portfolio.

  • lattes November 13, 2009, 8:33 pm

    That is awesome, what is the yield percentage wise? (not accounting for any interest on the leverage)

    I am usually pretty happy to yield anything better than 7% on dividend portfolios I set up for myself and others but it sounds like you may have blown that out of the water.

    If you aren't already in it, check out NRF, battered stock but the company is doing great, take a look at the latest financing they got from Wachovia, probably the best terms I have seen on financing in a very long time. Basically Wachovia/Wells has given NRF the thumbs up.

  • Nurseb911 November 14, 2009, 12:31 am

    Think Dividends: Thanks! I haven't set a new milestone just yet (likely wait until I conduct a full review of my 2009 performance & needs) but a good ballpark number I have in mind is a 5-6% increase including re-investment of the dividends.

    Susan: Cutting through the noise is the main objective of how I invest. Focus helps you see the path you need to follow, but great mentors never hurt either.

    Lattes: The overall yield of the portfolio isn't really what I concentrate on, but at this moment the income is slightly over 4% of the market value of the portfolio. I would rather concentrate on how effectively I re-invest the current dividends vs. concentrating on the current yield.

  • Dividends4Life November 14, 2009, 8:51 am

    Congratulations Brad! The beauty of a dividend investing strategy is that you can continue to achieve milestones in virtually any market!

    Best Wishes,
    D4L

  • Jeroen B. November 15, 2009, 9:39 am

    Congrats Brad! That is amazing!

    I'm sure you'll continue to do well and will reach your ultimate goal for your DivG portfolio.

    Best Wishes,
    Jeroen
    Amsterdam

  • Anonymous November 15, 2009, 2:06 pm

    dividend portfolio at 9.9%at moment, unless something changes. am finding Carla Pasternak's High Yield Report service (about $99 a yr.) from Street Authority.com very helpful, among other sources.

  • thesen2 November 20, 2009, 5:16 am

    Brad,

    While you mention that your current yield is 4% of the current market value of the DivG portfolio, I'm sure the yield on your original invested capital is much higher. I too, try to focus on dividend growth to my investments outgrowing inflation, although I'm not yet at your level of payback, I'm looking forward to getting there one day soon. Keep up the great work and blog!

    Tks,
    thesen2

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