Dividend Income: December 2010

Dividend Income

This is the last one for 2010! Queue the drum roll please …

December 2010 Dividends: $261.46.

It’s a small month compared with my past few months. I’ll be starting strong in 2011 though. I have a total of 17 investments that generate some nice dividends. It’s the first year I really track it all that way. I could probably go and pull up a Quicken report but I don’t think it would have been half of what I got this year.

  • Total dividends for the year: $3,752.79.
  • Yield on cost: 7.30%
  • Capital invested: $51,351.80

I’ll be the first to say that a yield on cost of 7.30% is not sustainable. My 10K$ purchase of Scotia Bank (TSE:BNS) double from 2008 and I was able to move some profits to higher dividend yield investment. I also did really good with RioCan (TSE:REI.UN) with a purchase price of 14$ to spring board another profit taking. My invested capital is the same, but my profits allowed me to purchase other investments with higher yield at times while maintaining the ability to DRiP shares. Basically, as some dividend investment got popular, I got out when I was able to find another dividend investment as good with a higher yield. Some will disagree but I want my money to work for me. As long as the investment fit the profile.

What should I expect for 2011? If I assume a 10% dividend increase on average from my investment, I should at least increase it by 400$. I also added capital during the year and for 2011, it will generate dividends for the full year. Compound growth probably isn’t huge at the moment, I’ll need to give it a few years I think. My estimate bring me to approximately 4,500$ plus any income from my 2011 TFSA contribution whenever I make it.

Note that my ‘capital invested’ doesn’t include the dividends earned and re-invested. It’s one way I like to look at the numbers. It keeps it leveled when you want to compare with interest or a capital gain investments. For example, my TFSA is worth 16K$ but my purchase was for 14K$ worth of CPG. However, I only invested 10K$ since it’s the limit for my TFSA account. That means that it counts for 10K$ in my ‘capital invested’ as opposed to 14K$. The purchase value of the investments isn’t what I use, I track my capital transfer in the accounts to make the purchases.

Join 6,600+ Investors & Build a Winning Portfolio