Dividend Income

Dividend Harvest (April 2018)

I’m a value investor with a taste for dividends. I’d like to live off the dividends from my portfolio when I reach financial independence. Every month I record the dividends harvested from my portfolio in my trusty Numbers spreadsheet and report them here for you to enjoy too.

View the previous Dividend Harvest here.

April Dividend Income

I received dividends from one company and one Aussie LIC.

BWX Ltd (BWX.AX) provided dividends of $30.00 and $12.86 in franking credits
Cadence Capital (CDM.AX) produced dividends of $60.00 and $25.71 in franking credits

Total Dividend Income: $76.22

Total Franking Credits: $32.66

Total grossed up dividend of $108.88

Yearly total

This brings the WF30 grossed up portfolio dividend income to a total of $300.75 for 2018 and $652 since inception in April 2017.

How did your April Dividend Income look?

11 thoughts on “Dividend Harvest (April 2018)

  1. The interesting thing for me is that most companies is Australia that have a high payout ratio or high % of dividends actually rarely see consistent growth in their share prices.

    Have you written somewhere about which broker you chose? And do you wait till you have say $5K or do you do it in manageable $1K increments? The latter would be a great way to get the habit going, though more expensive.

    1. Hi Dave – nice to hear from you again. Yeah Aussie companies generally have a high yield very high pay-out ratio. Across the ASX300 there was a yield in 2017 of about 4.2% and a payout ratio of about 73%. It’s a little lower on average over the past 10 years but – as you say – this has led to anemic growth in the index over the past decade. In fact, the ASX300 is still below a 2007 end of 6310! I think this is one of the reasons international shares are becoming more popular with Australian investors.

      I haven’t written about my broker. I use CMC for Australian shares / ETF’s and SaxoBank for international. I have found Saxo’s fee structure a bit high ($50 share transfer fee, $30 cash withdrawal fee). I intend on changing from SaxoBank to InteractiveBrokers in time.

      I used to invest with a $2k minimum which with CMC is a 1.1% total cost for the buy and sell transactions. As a long term holder and small investor, this was fine by me. I’m intending to sell investments with gains >10% p.a. so if things work out – time spent in the market is more valuable than on the sidelines, accumulating cash. That said, I have started investing in $1k increments – mainly for psychological reasons. I’ve found this helps me in three ways – stops me getting impatient and withdrawing cash from my HISA to make up the differences to my investment cash balance and the $2k minimum. It also helps with diversification to my small portfolio and it helps psychologically with any initial market shift up or down – sometimes get a chance to add at a lower price. Each to there own though, there are pro’s and cons to any method. As my income grows, I’ll shift to larger initial investments that are more cost effective.

      Best, WF30

      1. Hi again

        Yeah, for me the benefit of making small contributions/payments is that you feel like you’re making progress. Plus you’re not tempted to spend it all! It helps me work out my priorities.

        1. Good that you’ve found a sweet spot. It’s important to feel like you’re making progress – hard to stick to a plan otherwise.

    1. Hi Mr Robot – yeah I was very pleased with $100 dividends for the month! Franking credits are a tax imputation credit. So in my case for April, I received a total dividend of $108.88 but the company has already paid the ATO tax on this to the value of $32.66. I’ll typically owe the ATO some tax at the end of the financial year. This $32.66 counts as pre-paid tax on the dividend. If my tax rate is lower than the company’s tax rate, I get a refund of the difference. If my tax rate is higher, I only pay the difference. When an investors tax rate is 0%, they currently get a full refund of the franking credits.

      1. Hmmm thanks for the explanation! It sounds a bit like the system here in the Netherlands. We pay 15% foreign withholding tax and an additional 15% to the government.

        The foreign tax is automatically given back if there is a tax treaty between us and the domicile country of the stock.

        The other 15% can be used if your total savings go over 45k (family total) and you would pay tax on the excess. We can discount the 15% tax with the tax payer over the amount above 45k.

  2. Hey WFT, your introduction resonates very” much with me – “I’m a value investor with a taste for dividends.”. I would just add ‘the Fully Franked kind!’. March and April are the two great dividend months for Aussie investors in the first half of the year!

    1. Ha – fully franked dividends are the most delicious. Off the back of reporting seasons the dividends are great huh!

      Thanks for stopping by Frankie!

    1. Thanks Bert! Was great to bring in a hunge.

      Hope your dividend income is streaming in nicely so far this month.

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