Comments on: $2000 in Dividend Income http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/ Investing and Personal Finance Fri, 12 Mar 2010 14:06:04 -0500 http://wordpress.org/?v=2.9.2 hourly 1 By: Weekly Dividend Investing Roundup - May 24, 2008 » The Dividend Guy Blog http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/comment-page-1/#comment-6111 Weekly Dividend Investing Roundup - May 24, 2008 » The Dividend Guy Blog Sat, 24 May 2008 12:40:27 +0000 http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/#comment-6111 [...] $2000 in dividend income [...] [...] $2000 in dividend income [...]

]]> By: Canadian Capitalist http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/comment-page-1/#comment-6044 Canadian Capitalist Wed, 21 May 2008 21:15:55 +0000 http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/#comment-6044 If you are able to handle your margin calls that definitely gives you some leeway. You are planning on paying it down anyway, so I guess you'll do ok. If you are able to handle your margin calls that definitely gives you some leeway. You are planning on paying it down anyway, so I guess you’ll do ok.

]]> By: Mr. Cheap http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/comment-page-1/#comment-6029 Mr. Cheap Wed, 21 May 2008 01:55:10 +0000 http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/#comment-6029 Hi Lise, great questions! RUS is a Canadian company listed on the tsx (their head quarters in just south of the 401 on Don Mills in Toronto). Technically they are a metal distributer rather than a mining stock (that's my understanding at least), but they're still more affected by economic cycles than what I'm really looking for. a) I'm hoping to "retire" soon (currently looks like 6 <strike>months</strike> years might be doable). I'll probably actually keep doing something that makes money, but I want to get to the point where I don't have to. To my mind, a basket of reliable, solid dividend payers seems like great part of the foundation to be confident that my financial need will be met regardless of what happens. b) I think they're actually the highest yielding banks. As of today: BMO - 5.6% NA - 4.7% CM - 4.6% TD - 3.4% RY - 4% BNS - 3.8% They were the highest yields when I bought too. c) Because that's where the money lives ;-) Seriously, I'm a contrarian, so when things are getting tons of bad press, I start wondering if its a good time to buy. When I read an article talking about how you can't lose investing in banks and everyone I know starts putting money in them, that's when I'll sell :-). I like their business, I don't think technology will make them obsolete. Mostly they've got good, stable, reliable dividends (which I like). For full disclosure, I think Mike and CC are right, 58% is pretty high. If I didn't have the cash & income to back it up, I'd be somewhat nervous borrowing at that level. Hi Lise, great questions! RUS is a Canadian company listed on the tsx (their head quarters in just south of the 401 on Don Mills in Toronto). Technically they are a metal distributer rather than a mining stock (that’s my understanding at least), but they’re still more affected by economic cycles than what I’m really looking for.

a) I’m hoping to “retire” soon (currently looks like 6 months years might be doable). I’ll probably actually keep doing something that makes money, but I want to get to the point where I don’t have to. To my mind, a basket of reliable, solid dividend payers seems like great part of the foundation to be confident that my financial need will be met regardless of what happens.

b) I think they’re actually the highest yielding banks. As of today:
BMO – 5.6%
NA – 4.7%
CM – 4.6%
TD – 3.4%
RY – 4%
BNS – 3.8%

They were the highest yields when I bought too.

c) Because that’s where the money lives ;-)

Seriously, I’m a contrarian, so when things are getting tons of bad press, I start wondering if its a good time to buy. When I read an article talking about how you can’t lose investing in banks and everyone I know starts putting money in them, that’s when I’ll sell :-) .

I like their business, I don’t think technology will make them obsolete.

Mostly they’ve got good, stable, reliable dividends (which I like).

For full disclosure, I think Mike and CC are right, 58% is pretty high. If I didn’t have the cash & income to back it up, I’d be somewhat nervous borrowing at that level.

]]> By: White Eagle http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/comment-page-1/#comment-6027 White Eagle Wed, 21 May 2008 01:15:43 +0000 http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/#comment-6027 With some good timing, going 58% Margin would have made you look like a genius but with the recent downturn and your recent change in tax categories, I think 4P is right in saying paying it down would be the right thing to do. That being said, hindsight's 20/20 and it's better to learn from the small mistakes than the really expensive ones. With some good timing, going 58% Margin would have made you look like a genius but with the recent downturn and your recent change in tax categories, I think 4P is right in saying paying it down would be the right thing to do.

That being said, hindsight’s 20/20 and it’s better to learn from the small mistakes than the really expensive ones.

]]> By: Lise http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/comment-page-1/#comment-6025 Lise Tue, 20 May 2008 22:19:07 +0000 http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/#comment-6025 I'm not so sure a 58% margin is all that bad. When all this settles down, banks will prove to be a good buy. Their fundamentals are solid. I probably wouldn't buy mining stocks (I can't tell if RUS in on the Canadian or americn exchange, but as the only one that pays dividends in the Canadian one...) on margin.. too volatile, but that's me. I'm curious about your strategy: a) You sound pretty young. Why the focus on income vs. growth? b) With your focus on dividends, why did yu pick the lowest dividend paying banks (in Canada, anyway) ? c) why do you like banks so much? Just curious... I always like to see how other people think. I’m not so sure a 58% margin is all that bad. When all this settles down, banks will prove to be a good buy. Their fundamentals are solid. I probably wouldn’t buy mining stocks (I can’t tell if RUS in on the Canadian or americn exchange, but as the only one that pays dividends in the Canadian one…) on margin.. too volatile, but that’s me.

I’m curious about your strategy:

a) You sound pretty young. Why the focus on income vs. growth?
b) With your focus on dividends, why did yu pick the lowest dividend paying banks (in Canada, anyway) ?
c) why do you like banks so much?

Just curious… I always like to see how other people think.

]]> By: Mr. Cheap http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/comment-page-1/#comment-6024 Mr. Cheap Tue, 20 May 2008 19:24:43 +0000 http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/#comment-6024 CC: <grin> I was going to put a side comment in the post that "the Canadian Capitalist would NOT approve" ;-). I have reserves in case of a margin call to avoid a forced sale (my $20K LOC), and can easily, even on a grad student stipend, afford the month interest payments (a little under $200 / month). I definitely agree this is an aggressive strategy, but its aggressive on a small scale (in comparison to my income). If I inherited a million dollars and bought 58% on margin, I'd agree that you should declare power of attorney on me and take control of my portfolio ;-). Plus, as I wrote, I'm backing off on it now :-) CC: I was going to put a side comment in the post that “the Canadian Capitalist would NOT approve” ;-) . I have reserves in case of a margin call to avoid a forced sale (my $20K LOC), and can easily, even on a grad student stipend, afford the month interest payments (a little under $200 / month).

I definitely agree this is an aggressive strategy, but its aggressive on a small scale (in comparison to my income). If I inherited a million dollars and bought 58% on margin, I’d agree that you should declare power of attorney on me and take control of my portfolio ;-) .

Plus, as I wrote, I’m backing off on it now :-)

]]> By: Wealth Manager http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/comment-page-1/#comment-6023 Wealth Manager Tue, 20 May 2008 16:59:05 +0000 http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/#comment-6023 I also maintain an unregistered portfolio for medium-long term purchases but never have I invested using margin. Personally, I just don't get the lure vs. a standard investment loan which I've done in the past and feel much more secure about doing. As far as investment choices, mine have not been derived specifically with dividend income in mind but rather growth opportunities and if there happened to be a dividend associated then it was seen as a bonus. So far, I haven't lost anything in 5 years - but that's for another thread ;-> I also maintain an unregistered portfolio for medium-long term purchases but never have I invested using margin. Personally, I just don’t get the lure vs. a standard investment loan which I’ve done in the past and feel much more secure about doing.

As far as investment choices, mine have not been derived specifically with dividend income in mind but rather growth opportunities and if there happened to be a dividend associated then it was seen as a bonus.

So far, I haven’t lost anything in 5 years – but that’s for another thread ;->

]]> By: Canadian Capitalist http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/comment-page-1/#comment-6022 Canadian Capitalist Tue, 20 May 2008 14:50:45 +0000 http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/#comment-6022 Ouch. What are you thinking Mr. C? A 58% margin is far too high. Even if your have researched your picks thoroughly, a margin call might come at the worst possible time and force you to lock in your losses. It's simply not a game worth playing, IMO. Ouch. What are you thinking Mr. C? A 58% margin is far too high. Even if your have researched your picks thoroughly, a margin call might come at the worst possible time and force you to lock in your losses. It’s simply not a game worth playing, IMO.

]]> By: Kyle http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/comment-page-1/#comment-6021 Kyle Tue, 20 May 2008 14:44:26 +0000 http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/#comment-6021 Wow, you've got balls. Wow, you’ve got balls.

]]> By: telly http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/comment-page-1/#comment-6020 telly Tue, 20 May 2008 13:19:27 +0000 http://www.four-pillars.ca/2008/05/20/2000-in-dividend-income/#comment-6020 I agree with Mike, pay it down in part at least. A margin call with a temporary lower income could be scary. Looks like our unregistered portfolios are pretty similar. I own BMO, ROC and NA as well (and a few others) but don't have as much invested. Hopefully I'll catch those other opportunities FP eluded to... I agree with Mike, pay it down in part at least. A margin call with a temporary lower income could be scary.

Looks like our unregistered portfolios are pretty similar. I own BMO, ROC and NA as well (and a few others) but don’t have as much invested. Hopefully I’ll catch those other opportunities FP eluded to…

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