Dividend Income Update - April 2022 - And Some Portfolio Reflection
I hope you all had a great April. We have been very busy with a new addition to the family. Her name is Willow and she’s a husky, golden retriever, and rottweiler mix. She is 10 weeks old now and super smart. Here is a picture of her the day she arrived home with us.
In the past, we’ve adopted older dogs so this is our first experience raising a puppy.
I’ve been wondering what we were thinking after 3 sleepless nights, and my frugality went completely out the window when someone suggested I purchase a stuffed animal to help Willow adjust to her new home at a cost of $50 on Amazon. That seemed quite steep to me at first, but oh, let me tell you, it is a MIRACLE WORKER. I’m not kidding.
It has a battery-operated heartbeat and also comes with a heating pad. Its purpose is to act like a littermate and help puppies settle down at bedtime. This was by far THE BEST PURCHASE EVER! Our pup went straight to bed that first night laying right beside her Snuggle Puppy and slept through until 6 am. We were scared it was just a fluke and perhaps she was exhausted from the day but, lo and behold, she’s been amazing ever since. Hands down, money well spent!! Who knew?
You may wonder why we became parents to a new puppy now that my husband will soon join me in retirement and we could be free to travel anytime we like. That’s an excellent question, one I asked myself several times over the last 2 weeks, particularly those sleepless first few nights. It’s a long story but let me just say that our 23-year-old daughter has sworn her life away saying she’ll watch the dog for us when needed.
And need it, we will! We hope to spend a month away during the winter so our daughter will have to step up to the plate when that time comes. For now, we are enjoying dog ownership again and learning that training a new puppy is far easier than training an older dog.
Portfolio Update
As for our portfolio this month, it was up and down like a rollercoaster. We actually hit an all-time high at the beginning of the month with a YTD increase of over 6 figures. That didn’t last long but it sure felt great when it happened.
As a reminder, any YTD increase includes our TFSA contributions of $6,000 each, the dividends we have received and reinvested since January 1st, and any price gains since the beginning of the year on the shares we own.
In reviewing my portfolio, I was thinking a lot about the accumulation stage vs the decumulation stage for investors. As the names imply, accumulation is when you invest for the future without removing any gains, income or dividends. In essence, you are building your portfolio. Decumulation, on the other hand, is viewed as when you begin pulling income from your portfolio, and as a result, reducing its value over time.
There is always a lot of debate on what the magic withdrawal rate should be during the decumulation phase in order for an investor’s portfolio to sustain their retirement. You often hear about the 4% rule which might have been a good starting point years ago, but it might not be adequate today.
What a lot of investors may miss is the fact that there isn’t really a decumulation stage if you focus on building a dividend income that covers your living expenses in retirement. You can merely withdraw the dividends from your investment account and you don’t need to sell any shares. The growth of your portfolio may slow down once the dividends are no longer being reinvested, but the biggest benefit of all is your portfolio stays intact. This is the stress-free reward of being a dividend investor.
April Income Highlights:
We hit another all-time high this month with a 37% raise as compared to last April.
My top 3 highest dividends were from Bank of Nova Scotia, TC Energy, and Power Corp.
My husband’s top 3 dividends were from Alaris, BNS and Westshore Terminals