Social Icons

Tuesday, June 11, 2013

Pushing the dividend income up with the help of iShares Diversified Monthly Income Fund (XTR)

I cannot wait to show you my video of the man in the orange jacket, but it still uploading and its taking forever. While it uploaded, I am reviewing my portfolio. There're many things I like about my portfolio and I am just looking to get my hands on more dividend income, but I want to have it done the right way. My blog might annoying to read at a point because I am always going through the same things over and over again. How many times I said I will not gambler my money? How many times have I said (or more write) that I will now invest exclusively in blue chips? How many times I said I was going to get a second job? I am like a cute dog running to reach her tail (even if I don't have one of those).

At least, with me, you have the real picture of a real girl investing real money on the so real Canadian stock market. I have decided that us, Canadians, had the best stock market of the world and I am quite plug in the idea to get everything I want from it. Because I ALWAYS get everything I want (or almost). It just a matter of getting your mind ready for everything.

So are you ready?

We talked about this before. It was on the last time I reviewed my dividend income. Nothing much is coming from there with the equivalent of $551.51 per month ($6 618.07) annually. I went through my minimum monthly expenses and calculated that $ 1 200 is what I need to cover the basics. I am only missing a $648.49. 

This time, I am really working on a plan to get on a $648.49 as source of income. I would like to make it happen by August 27, MY birthday. I will be 33 years old.... I am getting older and my body too, I now have a few white hairs but luckily, I don't have the sign of age on my pretty face. I don't have even one wrinkles, thanks to my beauty cream. I am just turning 33 after all. Imagine what it will be at 40... Oh the drama. I don't care about getting older, I just don't want to see the effects on my pretty me. And so far, nothing to worry about. I could be seen as a 25 years old I guess. I want the eternal beauty of Lise Watier.

I am doing a lot of talking about getting an extra income of $648.49 (the power is all in the penny even if our 1 Canadian cent do no longer exist). That only represent $162 per week. No big deal right? Well it is for me, because I have to get out of my comfort zone.

A $100 000 at a yield of 6.5% could make it happen. I could easily save 100k in about 4 years if I work hard enough. A 6.5% yield is kind of hard to get in those actual market conditions. A yield of 6.5% is something you get get over time, by holding some quality blue chips like the Tim Hortons stock of the fellow Derek Foster. Ok, but what if I want to generate the $648.49 ASAP?

I am a bit of the impatient type, so I always like to seek my options.

I recently came across the iShares Diversified Monthly Income Fund (XTR). It won't gain as much value as a real blue chips over time, but it will satisfied my taste for hot and sexy dividend yield. A $1 000 investment will provide about $4.80 per month in dividend distribution. I am tempted to get on this one for my TFSA.

$648.49 - $4.80 = $643.69

Only $643.69 to go!


What can I do to get my hands on an income of $643.69? Options exist, I just to get more active on the solution zone.


Anonymous said...

probably a better investment than most of your holdings. you should be leaning more towards ishares investments... start dumping all those trouble maker stocks and start investing in a variety of ishares investment. you will surely better perform than what you are doing right now for sure.

Sean said...

XTR has been a steady ETF. Unfortunately that comes with little to know SP and dividend growth. I hope you didn't use borrowed money for this purchase.

Anonymous said...

XTR is a good pick, I already mentioned that few month ago, but you ignored me. Rising interest rate may bring down its price, but if you invest on it for a monthly income, don't worry about the price up and down.

Anonymous said...

The only problem is that by the time you achieve that extra $643 in dividend, your monthly expense would have increased also due to inflation and you'll require even more.
As for your credit increase being refused, I am not surprised; banks are being careful and you don't have much collateral except stocks that are never guaranteed in value. They also know that interest rates will eventually go up and not everybody will be able to afford the debts they have now.

Anonymous said...

Know what you're buying: XTR is a basket of Ishare funds. It covers a very broad range-a dog's breakfast-of securities and debt securities. Somewhere near a 50-50 split. There's overlap in the holdings, so if its balanced sector exposure you want than this is perhaps not the best vehicle. Its top heavy in financials. Moral of story: if you want a one stop shop-no brainer, maybe. If you already have sector exposures, or security type exposures, then maybe this isn't the best choice. If you want a pure dividend play, it isn't either. In your instance I think there's better purchases in other ETF's. Anony-cheese-'n-onions

Finance Journey said...

You should keep some money to buy high quality stock in low price. As interest rate rise, some sectors may take big hit. Also, I'm telling your from my experienc, you should pay down your debt as you may not get low promotion rate in high interest environment.

Anonymous said...

Hi Sunny,

Have you ever considered investing in tax free mini bonds? They are debt issued by corporations. Because the corps do want a tax break they re package their debt into equity(thereby classifying interest income which they cannot write off as dividend income which they can). If you are looking for income from mini-bonds try these securities. All are listed on the NYSE. I hope this helps you reach your goal.
Aon 8.2050% (KTN), Exelon Corporation 8% (KTH) and MFA Financial 8% (MFO)

Sunny said...

I never heard of mini bonds. Do we have mini bonds in Canada? Someone know?

Anonymous said...

Hi Sunny-Why are you only investing in Cdn securities? There are lots of foreign companies which you can choose from..and quite frankly most if not all are better run.

Anonymous said...

Mini bonds are a U.S. thing. The problem is that the word "mini bond" while always a debt vehicle, can represent different things. It can be a credit swap (wrap your head around that derivative (just research Lehman Brothers). It can be be a bond issued by a municipality or a company. Tax advantage? Not to foreign investors. There's even warnings to U.S. investors that the tax implications may not be clear. Anony-scones- 'n- jam


Thank you

Thank you for visiting!
Blogger Templates