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%.