Tuesday, May 8

...and now, back to our regularly scheduled program

Hello, I'm back! :)

It feels like I've been consumed by the tour for the past week, so I'm more than ready to return to posting in my own little corner and let the spotlight fade. Taking on a big task is an interesting case study for what happens when scarce resources are reallocated. In this case, my time and attention could only go in so many directions so I had to both find more time and allow certain things to pass by.

Money is the ultimate scarce resource. I suppose that if you are a government you can print it, and if you have a money tree in your backyard you can grow it, but most of us have only a finite amount of it at any given time, and additionally we know that we can only get more of it at a certain fixed or maximum speed.

Okay, not always a fixed speed. For instance I got a bit of a bonus yesterday... I sold my car. This is great because it means that I can cancel the insurance on it and I'm not going to be paying for two cars when I can only drive one. Also, I now have a chunk of money in the bank which will cover some house expenses that I have this month and probably my summer vacation as well.

In other news... The Dividend Project has reached a new stage!

I went out on a limb and bought some BMO today at $68.08. This equates to a 3.99% yield and I figure that's a good place to start. It was a bit scary to hit the buy button, because I haven't done it in so long. But I only bought 100 shares so that if the price drops further I can look at it as a buying opportunity instead of being all upset. This means that I am now entitled to a dividend of $272 per year or $22.67 per month (although it actually is neither of these since it is paid quarterly).

A reality check here-- the cost of the trading commission through a discount brokerage increased my actual share price to $68.34. It would have cost the same to buy 200 shares, so when possible I will have to make larger purchases. Fortunately I am not planning to sell if things go according to plan. :)

With an eye to early retirement, I am going to relate these dividends to real expenses. So first goal is to have enough dividend income to pay my property taxes and this first amount is about 10% of my property taxes. The nice thing about the stocks that we have been looking at is that they historically raise their dividends annually, so I can relate the amounts to current expenses and know that in most cases they should remain inflation-protected.

9 comments:

moneygardener (AKA investor99) said...

'went out on a limb and bought some BMO'

If that is going out on a limb, you must be a very conservative investor. :)

the money diva said...

Nah, just a mutual fund investor. Until now...

MD :)

Mike said...

Congrats, I'm planning to buy some BMO as well in the next day or two when the $$ gets into my trading account.

That will be my first stock buy.

Question - did you do a market order? Did you add a limit as well?

the money diva said...

Hi Mike,

I did a limit order and the funny thing was that the bid/ask was above my order the entire time yet somehow it got filled!

Good luck with your first buy... it is strangely anticlimactic but don't let that bother you.
MD:)

Canadian Money said...

I went in a slightly different direction and a bought some units of RBC Canadian Dividend mutual fund. It contains about 4% BMO.

Middle Class Millionaire said...

Hi MD,
I just wanted to say that I really like the way you you've set small goals for your dividend income ie-property tax. In fact I like it so much I think I'm going to do the same thing (maybe even post them on the blog). Makes saving for retirement more manageable if you set small wins along the way.

Cheers,
MCM

Anonymous said...

I'm planning on buying some BMO soon as well. Rothmans is looking nice too (I know, I know, I'm a bad person). My plan is to buy the ROC within the week, then buy the BMO with a GIC that is coming due at the end of the month. I've quite excited about blue chip dividend investing.

growthinvalue said...

I bought BMO a few weeks ago before their $450-million commodity loss. I bought a little over $72. NOw it's a little under $68. But it'll come back.

Well done. Your note about minimizing trading costs is a good one for all do-it-yourself investors to remember.

Denise said...

Hi, MD.

I enjoy reading through your blog, and I like your method of aligning your dividend receipts to living expenses.

Although I am not sure if that will work for me as I always ensure that I am enrolled in the dividend reinvesment plans where available.

I like to make my money work really hard for me, coz I work hard for my money too! Hehehe

Keep up the good work, and thank you so much for the PF Blog tour. Saves a lot of scouring on the internet for me!

Cheers,
Denise