The following post is written by Brian So, a financial advisor and blogger at www.aafsinsurance.com. Since my last post generated a lot of interesting discussion on which account to hold US stocks and ETFs, I’ll follow it up with a post on the impact of withholding taxes of holding international (non US) dividend stocks in different accounts. Canada does not just have tax treaties with the US with respect to dividends paid to Canadians from US stocks. We also have tax treaties with 89 other countries in force and treaties signed but not in force with about a dozen other countries. What this means is that dividends received from shares of companies in these countries will also be subject to withholding tax, depending on which account you hold these shares in. You would be able to claim the foreign tax credit (FTC) to recover the amount withheld, but only in non-registered accounts. By far the most common amount withheld is 15% of the gross dividend paid out, although there are a few exceptions, ...

Read More »

written by Hank Coleman My father-in-law was a bank executive for over thirty years at a large regional bank in the United States, and he amassed quite a bit of his company’s stock through options over his career. Now, in addition to his pension, he also has quarterly dividends that support him in retirement. That is the beauty of dividends. They are truly a passive income investment in most cases, and they can often help you to get more out of your finite investment resources than other options allowing you to more efficiently save for retirement. How Much Do You Need? I used to watch the share price of my father-in-law’s bank like a hawk. It gave me something great to talk to him about when the conversation lagged around the dinner table. I was amazed after a particularly brutal quarter of share price decline when he told me that he did not care because he was not interested in selling his shares. He only wanted the dividend and the security that the payments brought him in retirement. ...

Read More »

The following post is written by Hank Coleman at MoneyQ&A. A dividend can actually be a huge red flag depending on where the company gets the money for it. If you know what to look for, a company paying or increasing its dividend is not always a good sign. How does your favorite dividend paying company get the money for those annual or quarterly payments? Have you seen the statement of cash flows and income statement? Do you bother to dig deep to learn as much as you can about the companies that you are investing in? You definitely should take the time to understand where the money is coming from. You need to know the balance sheet, statement of cash flows, and income statement inside and out of companies you potentially want to invest in. Anything less than thorough due diligence can leave you vulnerable. Here are two examples of companies issuing or increasing their dividend when they possibly should have considered other options. Rising Dividends And Sinking Revenue Investors love ...

Read More »

This article was published in the July/August 2011 edition of the Canadian MoneySaver, and is posted here with permission. For more information visit www.canadianmoneysaver.ca Many dividend investors go to great lengths to screen dividend stocks. If you stick with the big dividend aristocrats or other big blue chips, you will do just fine. Some of these companies have been paying dividends for over 50 to 100 years! The economic stability of a company like that, which also increases its dividends year after year, is money in the bank. This is what most dividend investors look for, and it is the basis of Dividend Growth Investing. However, many good dividend paying stocks are not big blue chips with a significant dividend history, but may present good investment opportunity. They are usually higher yield stocks with smaller capitalization, but companies with a solid business plan, good management, and several years of operating revenue. The question is whether that company is a sound investment, ...

Read More »

Part-2 If you haven’t already, be sure to read Part -1 of my interview with Susan… Susan P. Brunner has over 40 years investing experience. She started investing in the 1970’s, and by 1999 she was able to stop working and live mostly off her dividends. Susan is a dividend stock investor, and over the years she has tried many different investment approaches and strategies. When I asked her about this, Susan said that she tried them all, but dividend stock investing has been the strategy that has worked for her. As Susan points out in this interview, don’t fixate on the overall value of your stocks, but on the dividend income you are receiving. Who can argue with 40 years investing experience? Dividend Ninja: Susan, welcome back! Susan: Thank you for having me! One thing I wanted to add is that when I was laid off in 1999, I knew that I had reached my portfolio goal for stopping working . But I did not know if I could live off my income.  The problem was that I was looking at ...

Read More »