Good Afternoon Everyone!
In the past, my wife and I have done quite well with regards to our taxes at the end of the year. I do not think either of us have ever had to pay taxes at the end of the year. Well, this year is no different. We will be getting a refund. However, you can hardly call the refund something to write home about. The reasoning for this is because we now make too much money... definitely not a bad thing! We have hit the next tax bracket, do not have any other deductions to take however, we are not maximizing our potential tax savings like we should be.
So this year, it finally hit me! We need to start maximizing our tax-free accounts as much as possible to reduce our tax burden.
Sunday, March 20, 2016
Saturday, March 19, 2016
Recent Buys - Bank of Nova Scotia (BNS), Amgen (AMGN), St Jude (STJ)
Well, after our sell of Realty Income (O) we have put an additional $3K to work or a total of about $6K. First we went and bought RAI and now we have purchased BNS, AMGN and STJ! Reasoning behind all the purchases:
Bank of Nova Scotia: Well, I didn't want to directly invest in the Oil and Gas sector as I am quite overweight in that area already. From what I have read, most Canadian banks have fallen quite a bit due to their relationship with oil. The yield of BNS was quite enticing and after quite a significant drop I thought it was a prudent time to make our first investment with the country up north. BNS is also quite diversified throughout many other countries in the world so I thought their big pullback was unwarranted. Finally, I bought right after there last earnings statement and I liked what I saw. In total:
I purchased 33 shares of Bank of Nova Scotia (BNS) at $43.62. This purchase adds $71.28 of annual dividends to our account at the current .54 quarterly dividend.
This is my first purchase of a company outside of the US so it will be interesting to see the taxes/exchange rate but we shall see. If you readers out there have a better understanding, please comment below!
Amgen (AMGN) & St Jude (STJ): I felt our portfolio needed some more healthcare related stocks and AMGN and STJ fit that bill for us right now. I'd really like to get some medical device stocks such at Stryker or Becton Dickinson but they have rallied hard since the market drop of a couple months ago. Either way, I think there might be some other good healthcare stocks available so please, comment below!
We purchased 10 shares of AMGN at $146.65 and 18 shares of STJ at $55.44. These purchases add $40.00 and $22.32 for a total of $62.32 to our annual dividends.
All in all, that $4,000 of investments added $133.60. Which gives us a 3.35% dividend yield. I am hopeful that these purchases will give us a tad bit more dividend growth than buying a REIT stock. It is looking more and more like in 10 years time we will be close to retirement at our current pace. I have been playing around with dividend calculators a lot recently and the 10 year mark seems like a good crossover point where lower yielding stocks with higher dividend growth rates take over the stocks that have a higher initial yield but lower growth rates. For example, a stock with 3.5% dividend yield with average 8% increases over 10 years will roughly be the same as a stock yielding 5% now with a 3% growth rate. However, after the 10 year mark the lower initial yield stock really starts taking off. Just another one of the reasons I've been wanting to add some medical device companies to our portfolio. Their business model is great because they build consumable items so once they are used, they are gone. Their dividend growth has been amazing as well over the years which makes them really interesting to me.
So there you have it, the next building block on the path to the American Dividend Dream! What do you think, good purchase, bad purchase? What are you looking to buy next?
Bank of Nova Scotia: Well, I didn't want to directly invest in the Oil and Gas sector as I am quite overweight in that area already. From what I have read, most Canadian banks have fallen quite a bit due to their relationship with oil. The yield of BNS was quite enticing and after quite a significant drop I thought it was a prudent time to make our first investment with the country up north. BNS is also quite diversified throughout many other countries in the world so I thought their big pullback was unwarranted. Finally, I bought right after there last earnings statement and I liked what I saw. In total:
I purchased 33 shares of Bank of Nova Scotia (BNS) at $43.62. This purchase adds $71.28 of annual dividends to our account at the current .54 quarterly dividend.
This is my first purchase of a company outside of the US so it will be interesting to see the taxes/exchange rate but we shall see. If you readers out there have a better understanding, please comment below!
Amgen (AMGN) & St Jude (STJ): I felt our portfolio needed some more healthcare related stocks and AMGN and STJ fit that bill for us right now. I'd really like to get some medical device stocks such at Stryker or Becton Dickinson but they have rallied hard since the market drop of a couple months ago. Either way, I think there might be some other good healthcare stocks available so please, comment below!
We purchased 10 shares of AMGN at $146.65 and 18 shares of STJ at $55.44. These purchases add $40.00 and $22.32 for a total of $62.32 to our annual dividends.
All in all, that $4,000 of investments added $133.60. Which gives us a 3.35% dividend yield. I am hopeful that these purchases will give us a tad bit more dividend growth than buying a REIT stock. It is looking more and more like in 10 years time we will be close to retirement at our current pace. I have been playing around with dividend calculators a lot recently and the 10 year mark seems like a good crossover point where lower yielding stocks with higher dividend growth rates take over the stocks that have a higher initial yield but lower growth rates. For example, a stock with 3.5% dividend yield with average 8% increases over 10 years will roughly be the same as a stock yielding 5% now with a 3% growth rate. However, after the 10 year mark the lower initial yield stock really starts taking off. Just another one of the reasons I've been wanting to add some medical device companies to our portfolio. Their business model is great because they build consumable items so once they are used, they are gone. Their dividend growth has been amazing as well over the years which makes them really interesting to me.
So there you have it, the next building block on the path to the American Dividend Dream! What do you think, good purchase, bad purchase? What are you looking to buy next?
ADD
Sunday, March 6, 2016
Dividend Income - February 2016 Update
The 2nd month of 2016 is behind us, warmer weather and hopefully the promise of greater dividends is in the future! It was a very quiet month in terms of purchases.
We ended up making just one purchase in February: RAI. This purchase was just $2,000 but March is shaping up pretty nicely so far. Total for the first two months of the year is about $6,000 invested. I'm a little upset we missed out on OHI at $28. I sold O to buy it and then it just took off too quick. I missed it at $29 by just a few cents. Instead, I've put capital to work in three other companies. We will get to those in the future.
We want to thank all of you readers out there who have stopped by and congratulated us thus far. You are the reason these posts keep coming out and continue to get better and better!
So with that being said, lets get down to the numbers.
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