Take a peak inside the compounding income machine! The inner workings are all explained.
I am presenting you with all my dividend income since I started tracking them and since I took control of my investments. I use a spreadsheet to track all my dividend income and portfolio performance and share a guide to building your dividend tracker.
If you are unsure about dividend investing, see “Why I chose Dividend Investing.” It’s the ultimate passive income machine. If you are still reading and like what you see, I strongly recommend that you sign up for my newsletter. It’s free, and I have unique content.
Dividend income is a true form of passive income, where you earn money in your sleep. Up until 2013, my portfolio was mostly made up of high-yield stocks, but I realized that dividend growth holdings perform better for both stock appreciation and dividend growth, and you can see how the growth accelerated below.
wdt_ID | Year | CAD Dividends | USD Dvidends | Gross Annual Dividend | Gross Monthly Income | Annual Dividend Growth |
---|---|---|---|---|---|---|
1 | 2010 | 3,785 | 0 | 3,785 | 315 | |
2 | 2011 | 4,674 | 68 | 4,742 | 395 | 25.28 |
3 | 2012 | 5,579 | 177 | 5,756 | 480 | 19.14 |
4 | 2013 | 5,948 | 347 | 6,295 | 525 | 10.96 |
5 | 2014 | 7,740 | 477 | 8,218 | 685 | 29.32 |
6 | 2015 | 9,777 | 792 | 10,569 | 881 | 28.45 |
7 | 2016 | 11,589 | 1,081 | 12,670 | 1,056 | 19.64 |
8 | 2017 | 13,694 | 2,015 | 15,710 | 1,309 | 24.20 |
9 | 2018 | 16,089 | 2,923 | 19,013 | 1,584 | 21.21 |
10 | 2019 | 16,924 | 7,711 | 24,635 | 2,053 | 24.25 |
11 | 2020 | 19,446 | 9,613 | 29,059 | 2,422 | 21.37 |
12 | 2021 | 18,151 | 7,883 | 26,034 | 2,170 | -7.96 |
13 | 2022 | 23,999 | 8,763 | 32,763 | 2,730 | 25.85 |
14 | 2023 | 29,136 | 9,300 | 38,436 | 3,203 | 17.32 |
15 | 2024 | 29,905 | 12,336 | 42,241 | 3,520 | 9.90 |
16 | *2025 | 46,422 | 3,869 | 9.90 | ||
17 | *2026 | 55,351 | 4,613 | 19.23 |
Dividend income is only one part of the journey. In fact, it’s only needed when you need to live on the income and also need dividend growth to beat inflation.
I break down my strategy as follows:
- Accumulation Phase = high dividend growth stocks (usually lower yield and lower income). I expect the dividend growth to be over 10%.
- Retirement Phase = the financial independence nirvana with dividend income but not high dividend yield with no growth. The market yield will generally be between 3%-4%, with a dividend growth of over 5%.
To succeed with this strategy, I invest by looking at key data points provided by the Dividend Snapshot Screeners and selecting strong toll booth stocks for resilient businesses.
The simple approach has given me an annual return since 2009 of 12%.
Thanks for your very useful investment emails. As a retiree, my target portfolio yield and growth are perfectly in alignment with your recommendation. I appreciate your work.
How many $ invested to receive $7019 dividends in Jan.2024 (i.o.w how large is your principal in $). Receiving 12 % per year : 12 month=1% per month sounds to good to be thru.According to this your principal would be no more than $701900. Why is one mts. written in black and the next mts in red? Peter Dijkema b.tech/portfolio developer and successful total return investor and strategist. n.b website not in operation since retirement.