Month: April 2015

Recent Purchase: SNC-Lavalin Group Inc (TSE: SNC)


Good evening,

I’ve been thinking a lot about how I had my portfolio set up and found that, while REITs were great for yield, I needed a much larger level of diversification and something more solid to work off and kick start an early retirement. My interest has been swayed greatly towards the level of dividend growth as opposed to simply dividend yield. It’s wonderful to get free raises year after year for the hard work companies put in when given your hard-earned cash. You make more and more every year with consistent dividend growers, meaning your portfolio will compound even greater, and you’ll find a lot more security; especially considering these type of companies are taking care of their shareholders and would not want to break a dividend streak.

And with that, I made my jump into the Canadian Industrials sector with my purchase of SNC-Lavalin Group Inc (TSE: SNC), purchasing 25 shares at $42.47. This company is a bit of a risky investment at the moment due to it being under legal fire, which caused many investors to fly the coup and leaving the company at a fantastic value for contrarian and value investors who believe in it to swoop in. I won’t go into detail about the lawsuit, but I am personally not too worried in relation to future prospects; especially since it seems to have possibly bottomed out and is starting to make a small climb back up as people are seeing the value.

So… Let’s get into the nitty gritty of why I thought this is an attractive company to own. It’s now the end of the day (I bought the shares this morning) and SNC’s share price has grown to $42.98 (up 1.54% in total today). SNC is trading at an astoundingly low trailing P/E of 4.8, and a (not incredible) dividend of 2.33%. At first, this pushed me away from the company, but after studying the dividend growth I decided I would let it go and invest anyway. The company has a 5-year yield growth rate of 9.14%. They’ve steadily increased dividends for the past 14 years, and their payout ratio is a very low 10.96%. The low payout ratio means they have a lot of room to increase dividends, and I would hope for them to do so as investors stick around through their legal issues. I also put the company through regardless of current dividend yield because I’m fairly certain the share price will appreciate greatly considering it’s very close to the 52-week low of 36.24, where the 52-week high is 59.63. Not to mention, Thomson Reuters forecasts a 13% increase for the 12-month mean price target of $48.00/share, with a high of $57.20 and a low of $42.00.

This is my second Canadian blue-chip dividend grower and I’m quite pleased with the purchase. I still have a lot of purchases to make since there’s just a wad of cash sitting in my accounts gathering dust instead of working, but prefer to make the decisions slow and steady and enter at decent times with the intention of holding these companies for a very long time.

Not sure if this is my last purchase for April as its coming to a close, but my next entry will probably be in the Communications sector, between Rogers, Telus and Bell.

Happy dividend growing everyone!

Recent Purchase: Bank of Nova Scotia (TSE:BNS)



Hello everyone,

I just purchased Bank of Nova Scotia (Scotiabank) (TSE: BNS) yesterday (23 shares at $65.55), and it’s my first purchase since I started this blog… So I’ll just go ahead and explain to you why I bought BNS.

I’ve been looking at it for the better part of a month now, and it’s been making great gains (3% in the past one month). While it would have been great to have invested at the time I considered it, it doesn’t make a huge difference here since I’m after it’s great dividend. Not to mention, this is my first big blue-chip company; one of the big 5 Canadian Banks. I’m finally making a move away from my beloved REITs for some diversification. I’m starting to believe that Canada will be more bullish than the US market will be this year. My Vanguard Total Stack Market ETF has been dropping while all of my Canadian stocks are rallying (I’m looking for a good exit point before interest rates rise in the US). The reason I bought BNS aside from all the technical aspects, and it’s fantastic dividend growth and potential is that the Bank of Canada announced that it will not be changing interest rates this quarter due to Canada’s stalled economy because of falling oil prices. There was even talk of it potentially being reduced a couple more times before the end of the year, which would really boost the Canadian economy, and drive Canadian stocks higher.

BNS is currently sitting at a P/E of 11.53, the lowest of the 5 banks and a dividend yield of 4.14%, falling only slightly below CIBC (TSE:CM)’s dividend of 4.4%. It has a 52-week low of $60.75 and 52-week high of $74.94, having bought at $65.55, there’s definitely room for it to grow. Capital gains are well and all, but over here at Dividend Beginner, we’re obviously interested in the dividends… You’ll hear me say this a lot. And BNS is a solid blue-chip Canadian bank, so as far as I can see, things are pretty safe.

Since 2011, BNS has been raising their dividends every two quarters. Back in 2010, the annual dividend was $1.96 per share and has grown to $2.72 which is an annual growth of 8.54%. Imagine that… Getting an 8.5% raise every year for not doing anything on all your shares of BNS. That’s what I like to call putting your money to work. Once you start that, there’s no going back. These shares of BNS will add $62.56 to my yearly dividends at their current yield, and will go up and up and up from there.

If not for BNS I would have invested in either CIBC (TSE:CM) or RBC (TSE:RY), so those are also some nice Canadian bank stocks to research and analyze, but I’m happy with BNS and will be holding onto these shares for a very long time. I’m glad to have finally invested in a blue chip company; off to a good start here.

Which Investment Goes In Which Account


Hello everyone,

Today I’ll be talking about how I plan my investments – in which account do I put which investment? I’m pretty new to the stock market, so I actually only currently have a TFSA set up for investing, but just applied today for a non-registered account to make investments from. Out of the three different Canadian accounts (TFSA, RRSP & non-registered), there are different strategies one may employ based on the different tax sheltering effects each account holds; which can add up to A LOT of money remaining in your pocket, instead of the government’s, over your investment career!

Let’s start with the Tax-Free Savings Account (TFSA), my all-time favourite. Investments you make in a TFSA will not be taxed on capital gains at all whether you invest in Canadian or US equities. Dividends you receive from Canadian equities will not be taxed, however there is a withholding tax on US equities (30% unless you fill out an IRS form to reduce it to 15%). In this case, my favourite thing to do with a TFSA is to invest in income-generating assets, stocks with good dividends, that, ideally, increase consistently over time. However, I am a big fan of real-estate investment trusts (REITs), and my TFSA is composed primarily of these, as you can see on my Portfolio page. These provide me with high-yield and (so far) some good capital gains. I prefer these for myself because of my limited contribution room as a 21 year old. I’d rather invest in some high-yield income assets that are relatively safe and have decent room for appreciation.

Investments in my Registered Retirement Savings Plan (RRSP) will not be taxed for as long as they remain in the account, but once they are withdrawn they are subject to full taxation. I’m sure you can see why I like the TFSA so much more. What is great about the RRSP though is, your US equities’ dividends do not have US withholding tax on them in this account! Therefore, your US dividends can grow tax-sheltered until you withdraw them (and there are ways you can use these tax-sheltered dividends to make you more money as your RRSP grows). Because of this reason, I plan to place all of my US income-generating equities in this account,  so that my US dividend income will not be taxed and I can use it to invest further. I would play it safer with my RRSP and invest in proven US blue-chip dividend-growth stocks.

With a non-registered account, you have no tax shelter whatsoever. Personally, I would use this account for even more passive income generation (obviously), but I’m not so happy with being taxed on my dividend income and capital gains (in Canada we’re only taxed on half of our gain though). Although this is the place where I’d probably put a little bit more speculation since it’s not an account I’m dedicating to retirement. Canada also offers a dividend tax credit. In here, I would probably put more REITs and more dividend-growing stocks, probably Canadian, however.

About Me


Hello readers,

I’ll just briefly introduce myself so you all have a sense of where I’m coming from as you read on and understand how anyone – regardless of age or income – can begin to assemble their very own passive income stream. I hope you’re as excited as I am about passive income.

Well, I’m a 21 year old Canadian living in Montreal. So, first off, you know we have Tax-free Savings Accounts (TFSAs), similar to the Roth IRA for the Americans; and Registered Retirement Savings Plans (RRSPs). I’m a web software developer, specializing in PHP / JS. I dabble in app development on the side and have built a few websites. However, this is my first blog ever.

I live with my parents and have not gone to university yet. In Quebec, we have this very unnecessary in-between from high school to university called cegep – where you get a diploma called a DEC, so I ended up getting a DEC in Computer Science (A 3-year career program) and got to work right after that. However, I plan on attending university once I’ve completed a few more required math courses (damn Calculus).

I plan to release mobile apps (starting with Android) as soon as possible to develop further passive income, but the time for that will come as life is pretty busy lately.

I absolutely love learning and reading (especially about finance and investing) – currently I am tackling “The Intelligent Investor”, and will not stop reading any time soon as knowledge is absolutely power.

I plan to retire on passive income, primarily with dividends, but also with any other form of passive income I am able to generate. I will create a dividend investment machine which will pay me monthly while I sleep, watch TV, or take my dog for a walk. I’m very young and thus have the powerful effect of compounding on my side and will make as much use of it as I can. I’m overjoyed to have discovered as much as I have at the ripe age of 21 rather than 40 (even though that still isn’t too late!). The specific details of this will all be revealed as time goes on.

Well, enough about me (for now), tell me a bit about you guys and your passive income attempts or goals. I’ll talk to you guys soon, I’ll explain a bit of my strategy next – starting with (as a Canadian), which accounts are most suitable for which investments – TFSA rules differ from RRSP rules which differ from non-registered accounts. More on that soon, take care all!

Financial Independence

The Journey Toward Financial Independence


Hello for the first time, readers.

I created this web site / blog so that I could enlighten an audience about a magical thing called financial independence, and display my journey towards it.

I only discovered financial independence this January, and since I’ve put my first dollar into the stock market – it’s nearly all I can think about. Just imagine: you can do anything you want, whenever you want, and you are still getting paid! I am devoted to extending myself to grasp as much passive income as I possibly can, at the young age of 21. Passive income can come from all sorts of things; from investing, to programming and advertising apps, to freelancing web sites, to writing blogs – the possibilities are endless and abundant!

However, in this blog, I plan to focus primarily on dividend investing. Those two words alone fill my soul with glee.

I will be posting up my monthly dividend payouts, as well as any other sort of passive income stream I may be able to muster along my journey. You’ll also get a glimpse into my head on my purchases being made in the stock market – why I do it and what I see coming from it. I may also post my expenses and a couple of other things so people can see how anyone can take part in building a passive income stream. It’s something that starts off slow – like a seed – and blossoms into the most beautiful flower, which will happen to pay for your retirement WITHOUT dipping into your funds or savings. You keep all your money (it will fluctuate in the market, mind you) AND make more (the company’s will pay you for investing with them)!

Stay tuned guys, in my next post I’ll introduce myself and we’ll take it from there!


Finance Blogs


My publishings on references an opinion and is for information or entertainment purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. I am not responsible for any decisions you make concerning finances, taxes, or investments. You must perform your own research and always take caution when extending capital.