Feb 282014
 

Absolutely incredible month for stocks in February. Most companies beat the street’s earnings expectations 😉 Furthermore, one of my favorite companies, TD, did a 1:2 stock split and raised its dividends! I also had quite a lot of DRIPs this month 🙂 #Score!

The title in today’s post isn’t just a reference to Bloodhound Gang’s catchy song 😉 DRIPs are super useful, and one of my favorite investing tools as a dividend investors. Dividend Re-Investment Plan (DRIP) means automating the process of using newly acquired dividends to purchase as many new shares as possible so the investment can snowball for maximum affect. For example, in the summer of 2011 I purchased 139 shares of Intel stocks for $3,000 and blogged about why I made that investment. But today, I have 149 shares of Intel. Where did the extra 10 shares come from? DRIPs of course! 😀

Every 3 months I acquire a new Intel share. Setting up a DRIP is easy and free 🙂 It’s been 10 quarters since I bought INTC, so that’s how I got my 10 extra shares, for free!

Since I purchased Intel the dividend was raised a couple of times from 18.12 cents/share to 22.50 cents now. That’s a 24% dividend hike over that 2.5 year period! #PassiveIncomeWin 🙂 If you followed my strategy and also bought Intel back in 2011, then I hope you are as happy with your investment as I am 🙂

Here’s a look at DRIPs in action inside my RRSP trading account ^_-

14-02-dripsintel DRIP

In 2011 Intel paid me ($0.1812 x 139 shares x 4 quarters) = $100/year
But today Intel pays me ($0.2250 x 149 shares x 4 quarters) = $134/year 😀

I anticipate in 10 years from now my Intel dividends will grow to reach $300/year. If someone has 10 companies which distributes on average $300/year of dividends each, then his portfolio would generate $3,000/yr of passive income! This is the incredible power of DRIPs and dividend increases 😉 I already hold way more than 10 companies in my portfolio today. I can’t wait to see what the future holds 😀 Intel is trading at roughly $25/share today. So a $3,000 investment will buy you 120 shares. It takes a few years to notice the benefits of reinvesting dividend stocks, and the really dramatic effect won’t be seen until 10 or 15 years later. But that time will pass anyway, so why not start now? 😀

*Side Income:chart_14feb

  • Part-Time Work = $900
  • Dividends = $400
*Discretionary Spending:
  • Eating Out = $100
  • Others = $2,000 (braces)

*Net Worth: (MoM)

  • Assets: = $755,000 total (+7,000)
  • Cash = $200 (-300)
  • Stocks CDN =$86,100 (+3700)
  • Stocks US = $48,800 (+2300)
  • RRSP = $40,900 (+1300)
  • Home = $254,000 (same)
  • Farms = $325,000 (same)
  • Debts: = $530,300 total (-1,500
  • Mortgage = $199,600 (-400)
  • Farm Loans = $207,800 (-500)
  • Margin Loan CDN = $27,900 (same)
  • Margin Loan US = $24,700 (-300)
  • TD Line of Credit = $34,200  (+500)
  • CIBC Line of Credit = $13,800 (-200)
  • HELOC = $17,800 (-100)
  • RRSP Loan = $4,500 (-500)

*Total Net Worth = $224,700 (+3.9%)
All numbers above are in CAD. Conversion rate used: 1.00 USD = 1.11 CAD

Once the stock market closes today I’ll make some final adjustments to my asset’s value. Otherwise I’m very elated about the $7K+ stock portfolio appreciation considering no new investments were made this month.  Earlier this year I blogged about charging my new braces to my credit card. This is why I don’t have an emergency fund. Because honestly, this isn’t the 19th century anymore. What’s the point of an emergency fund when I can just use credit cards for impulse purchases, expensive impromptu dental appointments, and other “emergencies”? 😎

Yup, I always have the most reliable financial advice don’t I? 😛 #sarcasm. Well the chicken has come home to roost and I’ve decided to pay off the entire balance on my credit card this month 🙂 Unfortunately this meant I had to borrow a bit of money from somewhere else like my TD LOC.

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Random Useless Fact:

14-02-tdfdrugs

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13 Comments on "Fiscal Update Feb 2014 – With an Automatic DRIP"

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Investing Pursuits
Guest

Gotta love DRIPs….I have a few myself…a couple full DRIPs directly through the transfer agent and partial drips in TFSA and margin account.

Laura / No More Spending
Guest

Well done! I love seeing your graph line going up and up!

Louise
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Louise

I love DRIPS, have all my shares set up for them, just so easy!

Renée
Guest

I’m just amazed you manage to keep track of and research all of this.

Financial independence
Guest

However you could look at it otherwise : 10 more shares on 139 it is 7 percent over three years.
The choice is yours 🙂 Albeit your 30% dividends rise look more appealing ^-)

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[…] often offer a Dividend Re-Investment Plan (DRIP) for its shareholders. I’ve written about how that works in previous posts. It basically means instead of receiving cash distributions, investors can choose […]

J-Bone
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J-Bone

Are DRIPs ever automatic? Or do they all need to be actioned separately with your broker?

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