November 2016 Dividend Update

Another relatively steady, but good, month on the dividend side of our investments. We purchased some RDSA (100 shares) and AH (150 shares in two batches) in November, plus ongoing DRIPs for about 10 different companies, which added anywhere between 1-4 shares each. We currently own 10.222 share in various companies, that’s quite a lot!

The grand total for November is a very solid €434 in free money. This monthly dividend income is a YOY increase of about 191%. This percentage is going down steadily compared to previous months and will continue to do so going forward due to the slower (re)investment into dividend shares.

20161201-monthly-dividend

As you can see below, we finally bought back RDSA and AH in November as noted earlier, as well as added to our position in UNA. This time we are planning to keep them, potentially adding to the positions in the coming months. After that, we have to start looking into some new posistions. But these have to be European dividend stocks (for diversification and exchange rate reasons), ideas?

We now own shares in a total of 45 different companies, which are:

20161201-dividend-overview

When you allocate the stocks to the various sectors they represent and add them together into a plot, this is what you get (based on Market value as of COB November 30):

20161201-dividend-stock-by-sector

How did you do this month? Better or worse then expected? What did you buy? Did you also get some UNA and AH after the drop in share price over the last month?

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40 comments

  1. Wow, nice job guys. I love seeing how much your income is grown since last year, it’s definitely help get you where you want to be 🙂

    You are smashing it. I can’t wait to see your final month – I bet it’s another huge increase!

    Tristan

    1. Not to burst the bubble, but December is not really spectacular as we did not have any RDSA shares around this time. Still, it is nothing to sneeze at either. Will also post the year overall data on the next one.

  2. Ummm..I would say that is some awesome YOY dividend growth. HECK YEAH! Amazing to see your progress and hopefully now you are starting to feel the impact of all your hard work and saving. Adding 100 shares of Shell too is going to add a nice punch to your income totals.

    Keep up the great work!

    Bert

  3. OMG! You guys rock! Just look at your dividend income and add on top of that your income from your real estate units (mentioned in I think two blog articles ago). Plus, on top of that you casually say that you hold some index funds as well which are not included in this monthly income in the comments. You are a great inspiration to me!

    1. Thanks DIB for the very flattering comments. It’s great to see that we can help and inspire other people, this was in fact one of the main reasons to start the blog!
      And you are right, it is going rather well, we are actually closer to FI than the Cheesy Index currently shows. Got a future post in mind to reflect on this.

    1. Hello Cameron
      The companies pay 15% dividend withholding tax (plus whatever is witheld in the country of origine). But we also pay wealth tax on these same shares. You are therefore allowed to subtract this dividend withholding tax from your overall wealth tax (i.e. all your Box 3 taxes), as to avoid double taxation. In short, we end up only paying wealth taxes on dividend shares (not the dividend itself), which is current 1.2% tax on the total value of your shares at the beginning of the year (value on Jan 1, if I recall correctly).

      1. Thanks for the explanation.

        It seems to not be as tax-efficient as property investment, nor capital gain based stock (or ETF) investing. At least from NL tax treatment point of view.

        Cheers.

      2. Hey Cameron,
        Real Estate definitely has some tax advantages, which lowers your taxable wealth. Actually, stocks, dividend stock, crowdfunding, ETF’s, etc. all have the same taxation, as they are all seen as wealth. Simplest way to look at this (at least for 2016, as of 2017 it is getting more complicated) you pay about 1.2% per year in tax on your assets. At least you know that to expect 🙂

  4. Why do you invest in companies like Shell? I also invest for FIRE but keep my portfolio clean from dirty oil/gas companies. Something to think about maybe? Best

    1. Hey Breeze,
      this one has mixed feelings, the dividend is so good that it is hard to ignore and it really helps in our path to FI. Also, Shell is one of the few oil/gas companies that actually has a bit more long-term vision and they will likely still be around with renewables as well in their business model. Still hopefull that they can improve on their footprint. On the other side, as a consumer you have much more impact than this big oil company (you are the one that is buying its products and have the ability to not to this, or limit it). We make many environmental considerations in the way we live (e.g. no meat/dairy, lot of cycling, recycling, only using the car when absolutely necessary, solar panels, etc.). It’s a balanced trade off.

      1. I totally understand the reasoning, but do think that investment decisons also make a big difference, next to lifestyle choices. The effects of not investing in oil/gas companies is underestimated I believe. Shell will be inclined to change their business model much more if they see investers leave! However, i’m also no saint and living a 100% sustainable lifestyle is indeed almost impossible. Just wanted to get it out there as a consideration. What is more, Shell stocks may look good now from a dividend point of view, but i have my doubts if they will be able to make the transition to renewable energy. As a long term investment, i feel oil/gas companies are simply too risky to my taste. Best.

      2. Hey Breeze, you are probably right. As a shareholder you do have some impact on the direction of the company, no debate there.
        I do also agree that I’m not sure what the long term outlook is for oil/gas companies, but unless we really ignite an energy revolution, they will be around for quite a while longer (don’t forget that they also provide a large volume of the chemicals we use every day and in manufacturing). We will therefore maintain various positions in these companies, but will be watching closely how they develop over the next years/decades and will act accordingly.
        Thanks for the comments, sincerely appreciate your input!

    1. Hey LLMM, correct, maar dit is alleen ons dividend aandelen gedeelte. We hebben ook nog wat index fondsen staan die we maandelijk aanvullen. Houden wel van een beetje spreiding 😉

    1. Thanks IH, it was a pretty good month. Hope to be able to expand the graph a bit more next year! Will need some more RDSA for that (or other great dividend paying shares).

    1. Hello Mr. Tako,
      yes we do, might need to evaluate this at the end of the year. The data is all there, but the calculations still need be made to give you an answer. Nice work for during the Christmas break 😉

  5. Great work on the dividend income. Although you are residing in Euroland, how come you have mainly invested in Canadian stocks? Is there a specific (dividend bound) reason to be invested mainly in CAD?

    1. hey Tneo,
      we used to live in Canada for a while and still have RRSP’s (registered retirement savings plans). We use these to house our Canadian shares, nicely tax sheltered and all. Will pay income tax once we start withdrawing from the accounts. Nice financial legacy from living in a great country!

  6. Nive one… 434 is a great result for the month.

    As for dividend stocks, I currently only look at Belgian companies: I look at solvac, bpost, ABInbev and ageas. Good luck with the analysis.

  7. Hey Dutch Fella!

    At a glance, I see we own 8 same companies. So my question to you : why are you copying me ! (just joking). Seriously, I was wondering why you had those (very good by the way) Canadian stocks? How did you fin out about them?

    Nice portfolio by the way. Lots of greats companies in there. How do you find time to follow all of them? Do you live in a cave in Amsterdam surrounded by gouda cheeses? (kidding again). 😉

    Anyway, good job and good luck on your journey.

  8. In my opinion Exchange rates can be completely ignored for several reasons:

    1)as long as the underlying company is a big multinational company with cash flows coming from all corners of the world.
    For example: Vandevelde is a Belgian company which makes almost all his money in Europe. So underlying cash flow is EUR. Vandevelde can be marked as a EUR investment.
    But Coca-cola is USD nominated but has cash flows from all over the world. Is it a USD investment or a 40% euro, 40% usd and 20% rest of the world currency investment? The latter of course. Coca-cola is only partly a USD investment. RD shell is quoted in EUR and pays dividend in EUR but gets its money from oil which is traded in USD. So it actually is more of a USD investment than coca cola. Underlying cash flows are more important than the currency the stock or dividend is quoted in.

    2)as long as you are in the accumulation phase. Although it may have an impact on your FIRE date (a year at most, see point 3), does it really matter what the exact EUR amount of your foreign dividends is? Currency fluctuate, sometimes they go up, sometimes they go down. Use your USD dividends to buy more USD stocks, use your EUR dividends to buy euro stocks. Since you are still in your build up phase you are going to buy more stocks anyway. If the USD is strong and you would want more EUR exposure just buy stocks quoted in USD but with a strong underlying EUR cash flow (see point one). No reason to start exchanging currencies.

    3)when you are FIRE. Congratulations, you are FIRED and are now living of 4% of your portfolio.
    Let’s take an extreme example and say you as a European are 100% invested in USD companies, paying dividend in USD. And the USD drops compared to the EUR. You probably have bought big companies like coca cola. The EURO cash flow coca cola has, is now worth more in USD amount, meaning bigger USD profit numbers, probably meaning a higher pay out in dividend. This would cancel out a lot of the depreciation of the USD currency.

    But let’s say you have USD stock, earning most or all of their cash flow in USD and the USD drops a lot: 30% or so. Since all your expenses are in EUR, you now have a problem because you have 30% less euro to spend. The answer to this is very simple: you move to a USD country. The USA has plenty of low cost areas to live in and in a lot of south American countries they accept the USD + you have a house in Europe you now can rent out. The rent is in EUR which will give you now more USD to spend while living in the USA. Once truly FIRED you gain a new ability: geographic arbitrage. It is so powerful that it cancels currency risk out almost completely (the one thing it does not cancel out is a complete melt down of a currency Venezuela or Zimbabwe style, but if you really believe that EURO, USD or GBP are going to follow the path of those currencies you need to start buying food and ammo, not stocks).

    Next meeting I’ll tell you why you shouldn’t care about diversification either 😉

    1. Hello FFSloth,
      oh, bring on that discussion 😉 Actually, reading your essay above, you might have a couple of very good points. However, considering the drop in value of the Euro compared to the US greenback as of late, we are not very keen on buying US stocks at the moment. We are actually buying already indirectly US shares through our ETF’s, but don’t wan’t to overdo it either. Therefore the consideration to add some European stock at this time, potentially diversifying into US stocks again next year (or earlier if there are some shares “on sale”).
      See you on the 4th!

    1. Hello Ricard,
      thank mate! We are not happy yet, but the basis is definitely there. Might add some more unilever too, depends a bit if they sink further.
      Take care

  9. Those are very good numbers, well done guys! I’m also planning to add some RDSA, especially because of the OPEC deal, plus the company has also made some reassuring comments about the safety of the dividends.
    Just because you asked about European stocks: looking at your portfolio there’s one company that I really like and you don’t have. Sanofi. Also the healthcare looks like a “bit” under represented in your portfolio 🙂 Just a humble idea, make sure you do your own research!
    Wish you a similarly good month in December!

  10. Your opening of, “…relatively steady, but good, month,” just highlights why I love dividend investing so much. It’s reliable, stable and predictable. Much more so than options trading or simple stock trading. A ‘steady’ month can really help you sleep well at night. Nice totals for November. You have build up a good looking portfolio. I was picking up a lot of UL the last four weeks. I’m still watching that name this month. Thanks for sharing.

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