Dividend Digger

Compound interest is the eighth wonder of the world. He who understands it, earns it . He who doesn't, pays it.

Dividends, Exponential Growth, and Automation

Hello fellow readers (if any of you are still left), it has been about half a year since I have posted and despite the lack content and blog growth I can assure you all my dividend income is still growing month over month. These last couple years it seems like my summers are more about getting projects and work done rather than enjoying the beautiful weather and summer vacations. Last year my summer time fixation was on contracting my first building move, this year’s project involved pouring 2600sq/ft. worth of concrete in my back yard, and building skateboard ramps (which is still in the works). I guess you could say I like to stay busy.

For any of those who are unfamiliar with my investment strategy, I utilize the DRIP feature of my discount brokerage account. To quickly recap on what a DRIP is, it is basically a plan where the dividends I receive every month or quarter gets automatically reinvested back into the originating company that paid it out. I knew in the beginning of my investing journey that this style of wealth accumulation chimed well with my personality. I am patient, and I focus on companies that will stand the test of time with proven track records of a growing dividends even during pessimistic times. However, I get distracted easily and sometimes things like projects or extracurricular activities can easily take all my attention. Automating my investments has really helped me get the most out of the markets especially when I am focusing on other things, and/or when I do not have the extra capital to deploy.

Automating my dividends to get reinvested has helped me take opportunity of pull backs in the market, and most importantly it kept my money working harder and harder month over month. Keeping track of your dividends is an important part of dividend growth investing, and adding them up every month you get an appreciation for all the cents that turn into dollars via dividend payments as well there is a sense of pride and motivation you get when you know that is essentially money you are receiving that you didn’t have to work for.  As investors, we can all agree that time is our best friend, and automating my dividends to be reinvested has helped me keep a strong bond with time knowing that even if I don’t open my account for 2 months, the cycle of exponential growth will not be hindered.

6 month 2017 dividend table

dividend graph

2016 vs 2017 YOY growth of Dividends:

March: + 28.6%

April:  -5%

May:  +18.8%

June: +19.7%

July: +24.9%

August: +18.5%

 

As you can see, my dividends are still growing, and I am hoping now that my concrete project is mostly done, I can start saving some extra money and get back into supercharging my freedom funds with fresh capital. The total of all dividends received for 2017 so far is $5,900.90. My current goal for 2017 is to accumulate over $9,000 in dividend income. Despite not being exactly where I want to be due to set backs in the prior years, I am starting to realize how poorly us human’s gauge how quickly wealth can be accumulated through exponential growth, I for one am pleasantly surprised how much my passive income has grown despite how much I have neglected my account these past several months.

4 Comments

  1. Welcome back! Don’t think I have left any comments on your blog before, but I saw this blogpost pop up in my Feedly, so must have added it sometime in the past :). Yea, isn’t it great to see the snowball getting momentum and roll all by itself? Especially with all the drips. It really grows exponential. Does your broker also allow partial shares combined with the drips?

    • Ace

      September 8, 2017 at 5:17 pm

      Hey SD,
      It sure does feel good to post more content, thanks for stopping by. I remember my first couple years I started DGI it just seemed like the snowball grew at such a slow pace but now that its been rolling for almost 4 years the gains in dividend income are more and more noticeable. in terms of partial shares go unfortunately my broker doesn’t do that.

      Cheers!

  2. Hello DD

    Best wishes for the backyard project.

    I used to DRIP did all my holdings but it was such a pain to keep track of the ACB (close to $7000 a month in dividends) so I cancelled the blanket DRIP and started the DRIP back only for those companies that offer a discount.

    You are right about how it adds up since those extra shares get you more dividend the next month.

    • Ace

      September 16, 2017 at 5:18 pm

      Hey Spock,
      Thanks forsupport, the back yard is coming along nicely :)
      As for keeping track of the ACB, I utilize my DRIP in my TFSA and my RRSP. When it comes time to start taking money out of those account it will only be the dividend, however, I can see the drawbacks when it comes to using non registered accounts.
      Thanks for the comment, best of luck with your investments although from the sounds of it i don’t think you even need it ;)

      cheers
      Ace

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